AIRMALL® USA Sets the Record Straight About its Airport Concessions Model

AIRMALL® USA Sets the Record Straight About its Airport Concessions Model, Calls on Airport Group to Stop Spreading Half Truths

PR Newswire

PITTSBURGH, Feb. 28, 2011 /PRNewswire/ -- AIRMALL® USA, developer of the leading airport concessions model in North America, is setting the record straight about the overwhelming success of that model, which has set the new standard for quality and profitability across the industry.  Mark Knight, president of AIRMALL USA, simultaneously issued a stern warning to Airport Group, the policy arm of Unite Here, for recently publishing a misleading study about the developer model for airport concessions.    

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"Simply stated, Airport Group and Unite Here have conducted a flawed analysis of our model, and it misrepresents the truth.  Instead of telling the whole story, they are being selective about the information they present," said Knight.  "Their tactics are both predictable and unacceptable, and their attempts to somehow undermine the validity of our business model with half truths will not go unanswered.  We will pursue every avenue to be certain that the whole truth is out there about our success and the success of our airport partners in Boston, Baltimore, Cleveland and Pittsburgh."

AIRMALL USA manages and develops the retail, food and beverage concessions at Pittsburgh International Airport (PIT), Boston Logan International Airport (BOS) in Terminals B and E, Baltimore/Washington International Thurgood Marshall Airport (BWI), and Cleveland Hopkins International Airport (CLE).  Founded in 1992 at Pittsburgh International Airport, the AIRMALL model has posted some of the highest per-passenger spends in North America over the past two decades and has won numerous awards for innovation and customer service.  

Knight went on to highlight some important statistics about each of AIRMALL USA's projects, which demonstrate that they generate greater overall sales, more sales per passenger, and higher rent revenue for the respective airports:

  • At Pittsburgh International Airport, AIRMALL USA inherited a master concessionaire's model when it began developing and managing concessions for the airport in 1992.  Based on 2010 figures, sales per enplanement have risen by 400 percent (from $2.69 to $13.45), revenue per enplanement has gone up by 357 percent (from $0.47 to $2.15), and rent revenue generated by the property has gone up by 126 percent (from $3.9 million to $8.8 million).  The program at Pittsburgh International Airport has remained the gold standard for airport concessions since its inception.  This is despite the notion that the airport has witnessed a dramatic downturn in passenger traffic over the past 10 years.

  • At Boston Logan International Airport, AIRMALL USA began developing concessions in terminals B & E in 1999, taking over from a master concessionaire.  As of 2010, sales per passenger had risen during that period by 149 percent (from $4.87 to $12.15), revenue per enplanement had gone up by 211 percent (from $0.69 to $2.15), and rent revenue had increased by 165 percent (from $5.1 million to $13.5 million).

  • AIRMALL USA's largest project is at Baltimore/Washington International Thurgood Marshall Airport.  The final year for the master concessionaire that preceded AIRMALL USA was 2003.  Based on 2010 figures, sales per enplanement have gone up by 61 percent (from $5.47 to $8.81), revenue per enplanement has jumped 117 percent (from $0.65 to $1.41), and rent revenue has risen by 142 percent (from $6.4 million in 2003 to $15.5 million in 2010).

  • The new AIRMALL at Cleveland Hopkins International Airport is AIRMALL USA's latest project.  Substantially completed in 2010, the new AIRMALL replaced a master concessionaire model starting in 2008.  Since that time, sales per passenger have risen by 30 percent (from $5.59 to $7.28), revenue per passenger has increased by 163 percent (from $0.35 to $0.92), and rent revenue has jumped by 161 percent (from 1.8 million to 4.7 million).

"The numbers really tell the whole story.  The AIRMALL model trumps other concessions models in terms of the revenue it generates, including rent revenue for the airport," Knight continued.  "At each of our projects, AIRMALL has been highly successful at partnering with the airport authority to develop an enhanced, profitable program that includes the very best international, national and regional brands.  Moreover, everything is offered at 'Regular Mall Prices…Guaranteed.'  This represents true value to the passenger, because they know they are getting quality goods and services for a fair price."

Knight also pointed to AIRMALL's track record of transforming its concessions programs into economic drivers that generate more business and employment opportunities.  He offered some examples from AIRMALL USA's most recent projects in Baltimore and Cleveland:

  • AIRMALL USA has nearly doubled the number of local operators or concepts participating in the Cleveland program versus its predecessor.  The new concessions program has also more than tripled the Airport Concessions Disadvantaged Business Enterprise (ACDBE) participation.  

  • In Cleveland, the number of concessions employees has more than doubled – from 343 (pre-AIRMALL) to 772.

  • In Baltimore, the number of concessions jobs has tripled since AIRMALL assumed management of the program in 2003 – from 500 employees to nearly 1,500 employees.

"Airport Group and Unite Here claim to be representing the interests of workers.  Based on AIRMALL USA's track record of generating additional jobs for its programs, our formula provides plenty of employment opportunities," Knight added.  "Many of the additional jobs available at the airport offer very competitive wages, because they are manager- or supervisor-level jobs."

In addition, Knight underscored the added value that a developer brings to an airport authority – capital that is earmarked for infrastructure development at the airport.  He offered two examples:

  • In Cleveland, AIRMALL USA invested $8.4 million to transform the concessions program at Cleveland Hopkins International Airport, representing one of the largest construction projects in Cleveland at the time.  The development took shape during one of the most dramatic economic downturns in recent American history.

  • In Boston, AIRMALL USA completed a two-year, $33 million concessions development project in 2008 to turn what was part of the roof of the terminal into shops and restaurants.  This permanent improvement to the infrastructure of the terminal resulted in the addition of nearly 20 new concessions units to the program – specialty retail, restaurants and bars, fast-casual/snack units, specialty services, and news/gift units.  

"Other concessions models simply do not have the motivation or the capital to make those kinds of permanent improvements," Knight concluded.  "It's another important component of AIRMALL's model that makes us far superior.  Once we finalize a shared vision with our airport partners, we can change the face of the airport to improve operations, drive sales, and ultimately enhance the passenger experience."

For more information on AIRMALL USA, visit www.airmallusa.com.

About AIRMALL® USA, Inc.

AIRMALL® USA, Inc. is the developer and manager of the retail, food and beverage operations at Pittsburgh International Airport, Boston Logan International Airport (Terminals B and E), Baltimore/Washington International Thurgood Marshall Airport, and Cleveland Hopkins International Airport.  The leading airport concessions model in North America, AIRMALL USA continues to boast the highest per-passenger spend on the continent and consistently receives accolades for innovation and customer service.  AIRMALL USA is owned by Prospect Capital Corporation, a leading New York investment company founded in 1988.  For more information on AIRMALL USA, visit www.airmallusa.com.  

Contact:

Jeff Donaldson


412-642-7700


jeff.donaldson@elias-savion.com



SOURCE AIRMALL USA

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