atu duty free model & the concession structure of the future ahmet kÖtehne operation units...
TRANSCRIPT
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ATU DUTY FREE MODEL &
THE CONCESSION STRUCTURE OF THE FUTURE
AHMET KÖTEHNE OPERATION UNITS & BUSINESS DEVELOPMENT DIRECTOR
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AGENDA
Privatization – Catching the Wind
ATU Duty Free’s Business Model
Key Challenges of Collaboration
The Next 25 Years
Contribution to the Economy
Q&A
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PRIVATIZATIONS
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Privatization – Catching the Wind
Change in theTurkish government’s vision towards privatization in the 80’s
More attractive political and economic environment for investors (especially 2000’s)
Being there at the right time
Stability in Turkey despite global crisis
1985 - 2002 2003 - 20100
10
20
30
40
50
60
8
47.9
Turkish Privatization Practices in Billion $
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Privatization – Catching the Wind
2000 2012
ATU is only 12 years old
Combining expertise of it’s partners - Collaboration between specialized companies: TAV, Unifree, Heinemann
One of Turkey’s most performing successful BOT models
Constant improvement: classic duty free store to a shopping mall concept
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BUSINESS MODELAirport + Supplier + Retailer = Customer Satisfaction
Success Formula
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Business Model
Efficiency
Partnership IntegrationLevel
Supply Agreement
Retail Service & Supply
Agreement
Concession Contract
Management Contract
Joint Venture Integrated Partnership
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Business Model
AirportManaging Partner & Supplier
RetailerCustomer
%50 %50
One of Turkey’s first integrated partnership models
Joint venture
TAV Airports’ expertise in construction Unifree Duty Free’s experience in Turkish Travel Retail marketGebr. Heinemann’s leverage in financial structure and expertise in global travel retail
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COLLABORATION
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Collaboration
Traditional models: standard rental agreements
Conflict of interest on fixed rent Lack of coordination Inefficiency
vs
Integrated partnership: collaboration on
Rental Fee + Profit Sharing Designing of Airport Guiding Passenger Flow Data Sharing
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Collaboration: Key Challanges
OPERATOR MANAGING PARTNER & SUPPLIER RETAILER
Designing and coordinating retail mix: Duty Free, F&B, Lounges, Banks, Other commerical areas
Strenghtening purchasing power Defining categories, brands and product mix
Organizing logistics & Just in time deliveries
Defining + designing retail space
Defining marketing strategy Offering a pleasant shopping environment
Guiding and analyzing traffic evolution and estimation
Creating in-store layouts Ensuring quality standards & Customer satisfaction
Adaptation of offers to the passenger mix and traffic
Revisions and optimizations in airport design and retail space
Coordination in overall marketing strategy
Data sharing for further enhancements in efficiency and performance analysis
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Fundamentals of the building
The base for orientation and creating a relaxing environment for the passenger Efficiency and smooth passenger flow Elimination of stress Signage and guidance No competition between operating companies
Interior design - Life span: 3 to 5 years Creating an inviting, comfortable and stimulating environment Clear segmentation of categories Modern designs
Shopping concepts - Life span: Seasonal to 10 Years Create an offer for all customer profiles Maximal seduction and surprise Classic duty free shops + brand stores Combination of local and international brands ‘Story telling’ to enlarge stopping power Integrated and interactive concepts communicated to the customer through technology and
tastings
Airport Design
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Airport Design
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THE NEXT 25 YEARS: ROOM FOR GROWTH
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CONTINUOUS GROWTH DESPITE CRISIS
Economic Crisis – November 2000Economic Crisis – February 2001N.Y World Trade Centre Terrorist Attack - 11.09.2001U.S and U.K launch war against Iraq -19.03.2003Departure Main Shops Expansion- October 2003Suicide bombers attack two synagogues in Istanbul – 15.11.2003. Terrorist attack HSBC Bank in Istanbul – 20.11.2003London hit by terrorist bombings – 07.07.2005Arrival Shops Expansion – October 2006Departure Shops Expansion – December 2006Renovation in Departure Boutiques – March 2008
Turkish Airlines joined Star Allianca – April 2008War between Georgia and Russia – August 2008Economic Crisis – First Quarter of 2009Swine Flu Epidemic – April 2009Sealed bag procedures started – October 2009 Sales limits were decrease in all categories – 07.10.2009Renovation in Arrival Shops – January 2010Increase in Cigarette Prices – 01.01.2010Volcanic eruption in Iceland – 15.04.2010Limits were increased in Arrivals. – 06.09.2010Arab Spring – January 2011Economic Crisis in Europe – January 2011Syria Crisis – April 2012
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Source : Ministry of Tourism and Culture - Turkey
Subsidy Amount Given to Local Administrations to Support Tourism
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The Next 25 Years: Turkish Economic Outlook
16th largest economy in the world.
6th largest economy compared to EU countries.
Expected to have the fastest growing economy among OECD members between 2011-2017.
GDP tripled between 2002 - 2010 (2002 GDP - $ 231 billion, 2010 GDP - $ 736 billion)
* GDP of a country is the major growth driver of the aviation sector.
Turke
y
Luxe
mburg
Slova
kia
Hungary
South
Korea
Czech Rep
ublic
Australi
a
Mexico
Greece
Norway
Finlan
d
Irelan
d UKSp
ain
Swed
en
Icelan
d
Poland
Switz
erlan
dUSA
OECD
Austria
New Ze
land
Canad
a
Denmark
Netherl
ands
Italy
Belgium
France
German
y
Portuga
lJap
an0
1
2
3
4
5
6
7
Annual Average Real GDP Growth (%) Forecast in OECD Countries 2011 - 2017
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The Next 25 Years: Worldwide GDP Growth
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Source: Airports Council International
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The Next 25 Years: Turkey
Indicates how many times a person flies during a year.
For Turkey, the propensity to fly is 1,4. (102 million/73 million).
In developed countries the average is 3.0
Turkey and other developing countries still possess huge potential for air passenger traffic growth.
Propensity to Fly0
0.5
1
1.5
2
2.5
3
3.5
1.4
3
TurkeyDeveloped Countries
Total Air Passengers
Total PopulationPropensity to Fly =
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CONTRIBUTION TO THE ECONOMY
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Flow of Foreign
InvestmentMajor source
of income from
privatization
Employee Education
CulturalPromotion
Enhancing Employment
Volume
Contribution to exports
Sustainable Cultural
Development
Corporate Tax
CONTRIBUTION TO ECONOMY
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