"Passengers don't like airports or the food, says boss"

Wednesday, March 28, 2007

Passengers don't like airports or the food, says boss
By Julia Finch
United Kingdom - The Guardian 


The chief executive of airline food and airport shops group, Alpha Airports,
yesterday conceded that air travel was "not a pleasant experience" and said
he was determined to bring improvements.

Peter Williams said passengers "don't like the food and don't like the
airport environment". He wants airlines to start selling newspapers, books,
magazines and CDs from in-flight trollies, rather than the array of spirits,
cigarettes and perfume.

"What is sold on aircraft is a quirk of history", he said. "They are not
selling what consumers want to buy".

Mr Williams, the former chief executive of department store group
Selfridges, said he had set up a team to adress the problems that travellers
faced. "We now need to influence airports to take note of what we are
saying".

Alpha was unveiling a slump in profits after business was hit by the terror
alerts at UK airports last August. Underlying profits before tax fell from
£18.5m to £16m.

Mr Williams was hired last year after accounting irregularities were
revealed and the chief executive and finance director quit. A £10m one-off
charge connected with those issues reduced bottom line profits from £18.4m
to £5.2m.

Alpha has slashed its dividend, from 4.2p for the year to 2.25p.

"We flagged that at the interims", said Mr Williams. "The dividend had been
uncovered for two years. This was a reality check". Revenue from services
provided to airlines - catering and retail - slid 1% to £296m. Revenue from
airport services - duty free outlets and Glorious Britain souvenir shops -
increased 5%, but profits were down 51% to £5m.

Its landside sales, which used to account for 60% of the firm's airport
trade, are now down to just 40%.

Some 80% of Alpha's business comes from the UK, which has low margins, and
Mr Williams said he was determined to win new overseas contracts, which
offer higher margins.

The group has just won a ten year contract at the UAE's Sharjah airport,
including responsibility for first and business class lounges. It has also
won the contract to run duty-free stores at Indhira Gandhi airport in New
Delhi. And has secured new in-flight catering contracts for Air new Zealand
and Etihad Airways.

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