The Moodie Blog

Every time I visit India’s airports, I feel I am watching history being made.

There’s an incredible sense of momentum here, with two new greenfield airports - Bangalore and Hyderabad - being opened in the past few months, and sweeping, ambitious, complex modernisations taking place in Delhi and Mumbai. There are also dozens of other airport developments happening around this vast nation, while commercially speaking there are around 26 airports that will offer commercial activities to tender in the coming couple of years.  

Having stepped off my Jet Airways flight from Hyderabad - are there any better domestic airlines on this planet than Jet and Kingfisher? - and exited the packed domestic arrivals hall, I immediately came face to face with the modernisation of Delhi’s Indira Gandhi International Airport.

Below you can see the new extension of the domestic arrivals terminal, well advanced and due to open soon.

It’s just one of many changes here. An improved T2 (international), offering many new features, was inaugurated on 1 July. And later this month a major milestone will be reached as the airport’s new, third runway is unveiled. At 4,430m, it will be India’s longest - and one of the longest in Asia - and, of course, A380 compatible.

Like all the developments here, the new runway is designed to increase capacity in the face of the airport’s booming past and projected traffic growth.

The aviation industry may be going through some pain here at present due to rising oil and (therefore) ticket charges (a big deterrent to Indian consumers in a highly price-sensitive market), but its recent growth has been phenomenal and long-term projections remain bullish.

The runway is likely to open around 21 August and local media interest is intense. On today’s site tour of the new facillity, I was accompanied by two of Delhi’s most senior television reporters, both planning their coverage of the inauguration of the runway (in the far background behind me in the picture below).

From a commercial revenues perspective though the big story revolves around the new Terminal 3, due to open in March 2010. Delhi hosts the Commonwealth Games in October of that year, and the new facility has to be in place well in advance of the event.

GMR, as one would expect from one of the world’s most efficient airport developers, is bang on target, with over 30% of the work completed.

That still leaves a daunting 70% and as the picture of the new building below shows, the task of creating the major showpiece that GMR has promised, remains a stiff one.

The facility will have 48 gates, 75 aerobridges and 165 check-in counters, including 20% self check-in, plus 5km of travellators.

“Every facility will be world class,” Chief Development Officer Airport Development I Prabhakara Rao (below) told me today as he gave me a a fascinating insight into how T3 will take shape.

All full service domestic carriers and all international flights will operate out of T3, which will have a capacity of 34 million passengers. So that spells major commercial opportunities - if you thought India’s duty free tenders until now were hotly contested, just watch out for this one.

A year ago, during my last visit to India, Rajiv Gandhi International Airport in Hyderabad looked like this…

And this…

And there - being helpfully pointed out by yours truly - were the duty free shops, or at least their work in progress…

It was a construction site. An ambitious, well-advanced construction site, to be fair, but a long, long way from being a completed international airport.

Around eight months later, a remarkable transformation had taken place and a state-of-the-art airport opened for business in late March this year. The GMR-led consortium had somehow defied the odds to open this ambitious greenfield airport, and in the process take Indian airports - and the commercial offer - to new heights.

Now it looks like this…

And this…

And this…

And this…

There is a beautifully prepared access road…

And here - for real this time - are the duty free shops (still very much works in progress, mainly due to stock shortages, particularly for perfumes & cosmetics and confectionery), run by The Nuance Group in partnership with Shoppers’ Stop…

And here are some highlights of the food & beverage offer…

Yesterday I met the GMR team, including Associate Vice President Retail and Commercial Keshav Thapa and (pictured below) Vice President Airport Development Kamesh Rao (below).

You’ll hear from them and other GMR executives in our feature on the new airport that will be published as part of next month’s major Turkey, India, Russia, China markets issue of The Moodie Report Digital Print Edition.

But for now I’ll leave you with the comments of Kamesh Rao, which underline the immense human efforts that went into delivering to the boom city of Hyderabad a world-class airport to replace its chronically dilapidated predecessor at Begumpet.

Mr Rao told me that from October 2007 onwards he worked seven days a week to ensure the job was completed on schedule. From the beginning of March this year until the opening day he actually slept at the office every night.

“We’re very happy with the outcome but we’re not sitting on that outcome,” he told me. “We’re constantly seeking ways to improve.

“But personally I am very, very satisfied… especially once you start to hear positive things from people outside the organisation.

“For myself, in terms of running the Project Management team which had to construct the airport and hand it over to the operations team… if I was given this state two-and-a-half years ago, I would have taken it on a platter.”

I suspect - once they get used to the airport’s distance from the city - so too will most of the citizens of Hyderabad.

I flew out of Rajiv Ghandi International Airport this morning, en route to Delhi. I moved through the various processes from kerbside to airside in impressively quick time. I took an excellent cooked breakfast at The Coffee Bean & Tea Leaf (overall I think the food & beverage is better than the retail in both the domestic and international areas) and found the general experience consumer-friendly, the airport bright, quiet, open and efficient.

First and foremost Hyderabad now has an airport of which it, and India, can be proud. The commercial offer needs some refinement but it also needs time to settle down. Given the challenges that faced GMR, and the level of transformation this facility has brought to the city, a more detailed critical judgement needs to be put on hold.

Look out for our full report coming soon. Meantime, as The Moodie Blog’s journey continues around India, it’s destination Delhi. I have another construction site to report on…

Some time this week, probably on Friday afternoon, a quietly spoken miracle worker will transform the life of a young Indian boy.

Both the boy and the miracle worker are well-known to readers of The Moodie Blog who followed our visit 13 months ago to Nizam’s Institute of Medical Sciences in Hyderabad.

Nizam’s is famous for its cleft surgery unit, one that is funded largely by cleft charity The Smile Train - a charity that has attracted incredible support from the travel retail industry over the past 12 months.

When we last visited Hyderabad, the delightful (then) six-year-old boy Anji was about to have his serious cleft lip condition restored by the said miracle worker, Dr Mukunda Reddy, Professor and Head of Plastic Surgery at Nizam’s.

Alas, as revealed in an earlier Blog, Anji turned out to have a congenital heart defect and could not have his cleft operated on until the more serious condition was addressed.

Today, I returned to Nizam’s to pay a visit to Dr Reddy (pictured right). I was delighted to meet Anji and his young mother again and to hear that he will be operated on this week. Just like last year, the little fellow lit up the whole ward with a smile that never seems far from his face, no matter what life throws at him. Watch for his name in the Indian cricket team 20 years from now, a thought that makes him beam from ear to ear.

“He’s now fine and his life expectancy will be normal,” Dr Reddy says happily.

Anji’s story is just one of many - some of them almost unbearably poignant - that you hear as you do the rounds of the ward with Dr Mukunda Reddy.

Take a look at this brother (Shravan) and sister (Ramya) below, aged 11 and 7. Both were born with severe cleft lips and palates (”It’s not really that unusual to have the condition repeated in the family,” says Dr Reddy). Both were operated on by the Nizam’s team, thanks to help from The Smile Train. Both are now bright, vivacious kids with decent speech, helped by a Nizam’s speech therapy programme. The pre-operation pictures were profoundly different.

Dr Reddy likes to operate on a child before they are 18 months old (ideally under a year) as that minimises (and usually eliminates) the need for speech therapy.

Now meet young Khajabee (above), eight years old and another success story from Nizam’s. Born with a severe bi-laterial cleft lip and palate, she was immediately abandoned by both her parents (her mother has since died). Luckily she was taken in by her loving grandmother (above) and operated on in 2002.

Now, thanks to additional funding from Nizam’s and The Smile Train (to the tune of about US$300 a year) , she is receiving a proper education and her speech is continuing to improve. She’s a delightful, gracious and beautiful young girl. Funding of the sort that travel retail is generating made the transformation of her life possible.

Here’s Navneetha (below), now eight years old and operated on by Dr Reddy four years ago. Dr Reddy has called her in to check on her progress, particularly with speech. Look at her quiet dignity, lovely coquettish smile and obvious immense respect for this man.

There are miracles everywhere you look here. Look below at this poignant image of young Akshaya, aged 11 months, recovering in the post-op ward, after Dr Reddy’s hands worked their magic earlier today. These aren’t meant to be intrusive pictures (the parents and Dr Reddy wanted me to take them) but to underline how important and effective the travel retail industry’s support for The Smile Train is turning out to be.

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Dr Reddy said he is enormously touched and encouraged by the incredible levels of funding pouring in for The Smile Train from various sectors of the travel retail industry. With my own eyes today I saw what a difference that money, allied to the magnificent dedication and skill of Dr Reddy and his team, makes to the young, underprivileged children of India.

There have been others, so many others - every one a child whose life has been transformed.

There’s the beautifully named Laxmi Narasimha…

And little Vikky, who had a bad deformity of her nose as well as a cleft lip and palate - just look at her now with her proud Dad. “It’s god’s work what the donors are doing,” he tells Dr Reddy - a message I promise to pass on.

Here’s Shubum (below), who has just been operated on. “The swelling will come down in two days,” says Dr Reddy, “children recover very fast.”

And finally Rajesh (below), operated on 10 months ago and a bonny wee lad now. Cheeky too. Most importantly though, look at the love on his mother’s face.

Tonight I had the most pleasant of suppers with Dr Reddy and his son Puneet. Nizam’s is highly committed to quality aftercare of its patients, and The Moodie Report was delighted to donate US$10,000 to enable Dr Reddy to purchase a Nasendoscope - a sort of thin, flexible telescope that enables the medical team to assess palatal function post-operation. Until now its usage had to be outsourced.

Over a glass of Indian ‘Sula’ Sauvignon Blanc, I asked Dr Reddy what impact the fund-raising efforts of the travel retail community (via The Smile Train) has made to his day-to-day work. He replied: “It has made a huge difference. This funding helps create good centres [of cleft care]. I will ensure it is put to good use.”

No-one would doubt it.

Meet Mr S Shriram, ‘Shri’ to his friends and colleagues, Senior Manager Travel Retail for Bangalore International Airport Limited (BIAL).

As I write this Blog, 45 minutes before taking my flight to Hyderabad Airport on the next leg of my journey through India, Mr Shriram is sitting right alongside me.  He has just set me up on the internet here in the HMSHost-run Time Out Bar in the domestic terminal, opened a few weeks ago. “It’s free wi-fi throughout the terminal,” he says proudly.

Free wi-fi is typical of the consumer-friendly offer here at the gateway to the state of Karnataka. What a transformation this is from the city’s old, faded predecessor in downtown Bangalore.

Today I took the journey by road to Devanahalli, where the new airport is located. There has been much local criticism of connectivity but once we hit the main highway (which runs all the way to Hyderabad but takes ten hours in case you fancy travelling by road on your next visit of Indian airport retail), I found the journey both smooth and fascinating.

I toured the airport’s commercial operations, in both the domestic and international terminal with Mr Shriram and his colleague Rajiv Kapool (Head Commercial Centre), while I also got the opportunity to meet newly appointed Chief Commercial Officer Manisha Grover (pictured).

I was impressed with the thought that has gone into the whole commercial offer - from a soon-to-be-launched valet parking service to an extremely diverse food & beverage offer.

I took lunch with the BIAL commercial team at the excellent Kingfisher bar, run by HMSHost. Executive Chef Murali Murthy (pictured below at the back of our group) offered up a tantalising fusion of east and west, and as he talked about the dishes on offer his passion, professionalism and patriotism were there for all to see.

The retail offer, most of it run by The Nuance Group and its powerful local partner Shoppers’ Stop, ranges extensively across both the domestic and international terminals. The BIAL team believes it is too soon to truly evaluate trends or the appropriateness of the mix. Some areas, notably fragrances & cosmetics, still await some stock and fittings. Others, such as confectionery, face significant supply issues (as in Hyderabad). In short, it’s early days.

Even so, it’s clear that Bengaluru represents a major advance in Indian airport retailing and food & beverage standards. The walk-through spirits and wine offer (see below), for example, is of the international class that one would expect from Nuance. And there’s a particularly nice shop-in-shop boutique from Indian designer Deepika Govind (third picture down).

There’s also an interesting first foray into the high-end watch segment, which, once completed, may set new standards in Indian airport retailing.

There’s more, much more, to talk about. But free wi-fi access or not, I need to shut down. My Kingfisher Airlines flight to Hyderabad - and another brand new airport - is saying last call. I’ll continue with my impressions of the fast-changing face of Indian travel retail tomorrow.

[More images from Bengaluru: Pictured below:]

- Chanel lends star status to the international terminal duty free store

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 The Nuance/Shoppers’ Stop International Arrivals shop

Accessibly priced Revlon and local favourite Lakme are proving winners in the Nuance/Shoppers’ Stop domestic cosmetics offer

The Shoppers’ Stop/Nuance fashion-dominated main store in the domestic terminal

A year ago I strapped myself in as we raced down the runway at the new Bengaluru International Airport in Bangalore.

Except on that occasion I was in a car, as I joined Bangalore International Airport Limited (BIAL) management and senior executives from two of its leading concessionaires - HMSHost and The Nuance Group - in viewing the runway, air traffic control tower and terminal building at the new greenfield airport, that would open for business some 10 months later.

A year on and that construction site I visited has been transformed into a gleaming, modern airport. I flew in via the excellent Kingfisher Airlines from Cochin to Bengaluru yesterday.

By the time I had taken the short walk from the plane to the baggage belt in the Arrivals Hall, my suitcase was already there. The atmosphere was clean, simple and inviting, the promotion of the state of Karnataka prominent.

A bright Cafe Coffee Day outlet lit up the meeters and greeters area, and signage was excellent. My hotel had a handy kiosk to which I was readily guided by the friendly young Tourist Information official.

From a consumer perspective, my experience was excellent. Today we’ll visit BIAL management and take a closer look around the airport, including the commercial offer in the international terminal. More on The Moodie Blog later as we continue our journey around this fascinating country. 

Cochin Duty Free may just be one of the most under-rated success stories in the global travel retail business.

And Cochin International Airport (pictured above) surely deserves more exposure too for its impressive championing of the Sense of Place concept and its unrelenting commitment to corporate social responsibility.

Those are just some of our impressions after The Moodie Report’s first visit to the Kerala gateway over the past two days. Cochin International Airport was the first greenfield airport in India built under the Public-Private-Partnership (PPP) model - a concept that has mushroomed since Cochin International opened for business in June 1999.

Today I met with senior executives from Cochin International Airport Limited (CIAL) as well as its duty free management partner Alpha Kreol.

The sense of partnership is readily apparent - here is an Indian airport company that was well ahead of its time in putting such an emphasis on duty free (and commercial revenues in general).

Today duty free generates an impressive 30% of the airport’s gross revenues - driven by an average transaction spend of US$40, claimed to be the highest in any Indian duty free shop.

The airport management’s understanding of the importance of duty free is underlined by the extensive use of space outside the shops to promote the various offers and promotional campaigns (see below).

Even the space outside the terminal is well used to highlight shopping promotions within. The picture below shows me checking out the Shopping ‘Car’nival promotion that is running during the Onam festival celebrations.

This is a highly proactive approach to retailing. Promotions, like the one for Chivas Regal below, really make a difference to both penetration and average spend, says Alpha Kreol.

Cochin International is India’s fourth-largest in international passenger terms, most of them bound for, or returning from, work in the Middle East. That’s why, as explained in an earlier Blog, the Arrivals business (below) is so important here (over 90% of the mix).

Commercial success is one thing - social values are another. CIAL is dedicated to serving the people of Cochin and Kerala. “Cochin Airport is of the people, by the people and for the people,” says a proud Airport Director A.C.K Nair. The state government is a shareholder as are, collectively, the airport users.

We’ll bring you the full, fascinating story of Cochin International Airport and Alpha Kreol in the next issue of The Moodie Report Digital Print Edition, out in September and dedicated to the travel retail markets of Turkey, Russia, India and China.

It will make timely reading. With so many question marks being posed about the recent price of entry into Indian duty free, as well as numerous disputes between concessionnaires and airport companies, Cochin International Airport is a testament to the power of true partnership in making commercial aspirations come true.

Kerala’s natural beauty is legendary. The state’s official tourism website (www.keralatourism.org) dubs it ‘God’s own country’ and talks of it as a place where “the green, verdant carpets unfold”.

Waking up early and looking out the window from my temporary Moodie Report Indian Bureau at the splendid Le Meridien Resort & Convention Centure in Cochin offers apparent confirmation of such claims. What carpets they are, and they have truly been unfolded as far as the eye can see,

What a sight - lush greenness spread far into the distance; palm trees dominating the landscape like the jungle equivalent of a Manhattan skyline. The nearby river bends like a snake and birds swoop in and out of the thousands of trees.

A lone swimmer does a few early morning laps of the pool below while a hundred yards away from him a motor-powered boat winds it way around the sharp curve of the river.

It’s rainy season here so the greenness is even more acute than usual. It’s a startling and beautiful sight to greet the day here on the south western tip of India.

Frustratingly, I will only be Kerala for a few hours. Shortly I’m heading to Cochin International Airport to spend the day perusing the dynamic retail operation there with CIAL Alpha Kreol. Then it’s a late afternoon flight to Bangalore. But I will be back, next time with leisure, not business, in mind. After all, it’s not often you get the opportunity to visit god’s own country.

The Moodie Report - and, of course, The Moodie Blog - are back in India, beginning a five-day whistlestop tour of this amazing country.

Tonight I arrived via Singapore to Cochin International Airport, gateway to beautiful Kerala and home to Alpha Kreol, India’s longest-running duty free success story.

Despite the late hour (well after 10p.m) I was greeted by no fewer than three of the Alpha Kreol management team and welcomed with a beautiful bouquet of flowers.

That’s typical of the famous Keralite hospitality. And they weren’t the only flowers on show. The Onam festival is under way and the huge Alpha Kreol Arrivals shop is adorned with gorgeous yellow flowers.

Onam is Kerala’s biggest festival (it marks the homecoming of legendary King Mahabali) and besides showcasing the best of the state’s culture and traditions, it offers a huge retail opportunity for Alpha Kreol.

To maximise that opportunity Alpha Kreol is running a neatly named Shopping ‘Car’nival promotion. Any consumer buying anything from Cochin Duty Free between 1 August and 31 October has the chance to enter the draw to win one of three Hyundai cars on offer during the campaign. ‘Walk in Cochin Duty Free. Buy anything. Win a car’ runs the tagline.

There will be plenty of takers. Some 95% of buyers at Cochin Duty Free are returning workers from the Middle East and many will be tempted by the opportunity to win a car.

Tomorrow we’ll take a tour of the whole retail complex but even from a quick whirl around the aisles late tonight it was clear that this is a very effective retail operation indeed.

The sponsor of The Moodie Blog - Mars International Travel Retail (whose Galaxy display is pictured below) - recently named Cochin International Airport Alpha Kreol as its inaugural Indian Duty Free Retailer of the Year, while the liquor business is also prospering. The category represents around 58% of the mix, and buoyed by ultra-competitive pricing and intensive promotions, sales are flourishing.

We’ll bring you more from Cochin - and then Bangalore, Hyderabad, Delhi and Mumbai - later in the week as The Moodie Blog returns for the third time in a year to India.

Meet Monica, Shell and Robert - the small, amazingly dedicated team who run The Smile Train China.

I dropped into their office in downtown Beijing today to hear from Shell Xue (second from left), who heads the team, about their success to date and their plans for the future. What an inspiring story it is.

Amazingly, The Smile Train China funded 27,144 cleft lip and/or palate operations during the fiscal year ended June 2008. That’s up nearly 26% from 21,575 the year before, an incredible effort given the size of the team - and the scale of the country.

Shell is an amazing woman, who spoke with incredible conviction, humility and dignity at last October’s travel retail industry fund-raising dinner in Hong Kong (she is pictured below left on stage at that dinner with Wang Li, the first patient to have had a cleft operation funded by The Smile Train China), which raised well over US$300,000 for The Smile Train, the world’s leading cleft charity.

Shell told me today how grateful she was for the amazing level of support The Smile Train is getting from the travel retail industry - and asked me especially to thank all the donors around the world from within our business. Every single Dollar matters when you are doing a job like Shell’s.

Since last October’s dinner, The Smile Train China has increased the number of hospitals it funds from 154 to 395 - a direct result of the funding generated by the travel retail sector and other donations.

Sometimes charities seem faceless. The Smile Train is anything but that. Very real people are seeing their lives transformed. Very real people are working hard every day to facilitate miracles. And very real people in travel retail are helping to fund those miracles.

The Moodie Report is in Beijing, China, where in less than two weeks the long-awaited Olympic Games begins. There’s an extraordinary mood of anticipation here in the Chinese capital that hits you from the moment you alight from your plane into the fantastic, almost surreal experience that is Beijing International Airport Terminal 3.

There are staff all over the vast terminal, resplendent in their bright Beijing Olympic polo shirts, and a Beijing Olympic lane for inbound arrivals. There are even Arrivals duty free shops - run by Sunrise Duty Free. That’s a surprise given that Arrivals shopping in China was historically confined to border crossings in special economic zones. But as the photos below show, they’re now here at the airport. And they were doing very solid business as I arrived.

Colourful ‘Beijing 2008′ signage adorns the airports and the expressways leading to the city and to the Olympic village.

Beijing has poured extraordinary resources and commitment into this event, which takes most dramatic shape in the new Olympics stadium. Capable of holding 91,000 spectators, it has been dubbed ‘The Birds’ Nest’, a reference to its extraordinary design - a hi-tech, ultra-modern integration of engineering and art. 

Today I took a visit to the site with China Duty Free Group Marketing Department Director Antonio Hao (pictured below). The facility is currently fenced off but in a few days time the eyes of the world will be on this extraordinary facility and the dramatic events that will take place within it.

Antonio and his colleagues at China Duty Free Group, have been hoping for an Olympics bonanza in terms of retail spend, though tight security and visa restrictions may augur a lower than anticipated commercial return from the event.

The ‘Birds’ Nest’ is not the only amazing new building in the city. We also stopped off at the beautiful new National Centre for the Performing Arts (pictured below), located close to Tiananmen Square and The Great Hall of the People.  This world-class facility, which resembles a giant egg, is surrounded by water - visitors enter via an underground walkway. It’s spectacularly beautiful.

We’ll analyse the retail impact of the Olympic Games in a special issue of the The Moodie Report Digital Print Edition, due out in September. It is dedicated to the exciting travel retail markets of Turkey, Russia, India and China. I’m on the road through both China and India, having recently returned from covering the opening of the spectacular new RegStaer store at Moscow Sheremetyevo Airport in Russia. My colleague Dermot Davitt was in Turkey last week and will be heading to Russia for more coverage in a few weeks.

Our ‘TRIC’ markets report promises to make fascinating reading - but not half as fascinating as the great sporting event that is about to unfold in Beijing. Let the Games begin.