Article
NMIAL doubles advertising revenue, adds new concessions
Published: Sunday | September 9, 2012
NMIA Airports Limited (NMIAL) is reporting a 20.55 per cent improvement in non-aeronautical revenue (NAR) for fiscal year 2011-2012 on the back of improved income from concessions and advertising.
NMIAL is the Airports Authority of Jamaica subsidiary that operates the Norman Manley International Airport.
The airport company earned US$14.76 million in non-aeronautical up from US$12.24 million in the previous fiscal year.
NMIAL plans to spend some US$6 million will be spent in the coming fiscal year on capital improvement projects, according to Senior Director of Commercial Development and Planning Alfred McDonald.
With respect to NAR-generating projects, new plans for the current fiscal year include tendering for additional retail and food concessions, as well as a sports bar.
"Other plans are in progress to attract more non-travellers to the airport for information and entertainment. These plans are in their embryonic stages," said McDonald.
NMIA Airport is a wholly owned subsidiary of Airports Authority of Jamaica (AAJ) which was incorporated in 2003. It operates NMIA under a 30-year concession agreement with AAJ.
The arrangement is expected to be set aside once the state-owned airport is privatised.
NMIAL collects most of it commercial revenue from concession fees collected from non-fuel retailers. The rental of retail space brought in 24 per cent more revenue, up from US$5.59 million at year-end March 2011 to US$4.51 million at March 2012, due in part to the addition of new businesses.
New operators included mini-mart Gladfiseeyu in the arrivals section, a duty-free concession, food operators Dasheen and Island Grill, and Club Kingston in the executive lounge.
31 retail stores
There are 31 retail stores currently listed on the NMIA website, including restaurants and snacks, and sellers of coffee and rum, music, art and craft, aromatherapy and fine accessories.
Rental revenue for advertising space and maintenance rose by 66 per cent, from US$1.75 million to US$2.90 million in the last year.
The increase was due to a significant jump in additional indoor and outdoor advertising spend at the airport.
Common Use Terminal Equipment (CUTE) system charges provided revenue of US$2.087 million down more than three per cent from US$2.155 million the year before.
McDonald said the dip in CUTE income was "in keeping with the marginal decline in passenger traffic".
The airline industry has been affected, he said, by increased fuel costs, the Air Passenger Duty introduced by the British government, and the slow recovery from the global economic crisis.
Concession fees from fuel were flat at US$1.66 million, which the commercial manager notes was in keeping with the marginal decline in aircraft movements.
Other NAR revenues included US$1.08 million of utility service fees and US$834,000 from the car park, and maintenance charges of US$258,000.
Car park fees were increased in August. business@gleanerjm.com Summary of Article
NMIAL operates the Norman Manley International Airport and is a subsidiary of Airports Authority of Jamaica (AAJ) which was incorporated in 2003.
NMIA saw over US$5 million in growth/profit for the fiscal year 2011-2012 from income gained through non-aeronautical, including concession fees that they get most of their revenues from, advertising, rental of retail spaces utility services parking and maintenance.
The Airport currently houses Thirty One (31) retail stores including restaurants such as Island Grill & Dasheen, Coffee Shops Music Marts and other variety of businesses. Plans have been put in place for a US$6 million improvement project for the coming fiscal year. Also there are plans for the tender of additional retail and food concessions that will attract non- travelers to the Airport searching for information and entertainment.
NMIA had a successful year with a big boost in non- aeronautical revenues; however there was a drop in Common Use Terminal Equipment (CUTE) income due to the decline in passenger traffic.
Article Review
Planning is the management function concerned with defining goals for future organizational performance and deciding on the task and resources needed to attain them. (Daft, 2000)
In the article you see where the planning function of management is depicted. * Firstly there is plan to spend US$ 6 million on Capital improvement projects. This is the aspect of planning that identifies the task and the resource needed to attain it. * Secondly plans are in progress to attract more non travelers to the air port for information and entertainment. They see where the organization needs more customers and are planning innovative ways to attract them. * Lastly for this fiscal year new plans are in place for tendering of additional retail and food concessions, as well as a sports bar. New retail stores will generate more revenues and thus the organization will perform much better.
Planning is a very important aspect/ function of successful management. Good planning and implementation of these plans will lead to organization success. The management of NIMAL knows this and is practicing it has seen in the article.
References NMIAL doubles advertising revenue, adds new concessions. (September 9, 2012). Business. The Sunday Gleaner.
Daft Richard (2000) Management 6 edition, Sage publishers.
NMIAL doubles advertising revenue, adds new concessions
Article Review
Nicole Jackson
International University of the Caribbean
Submitted in part fulfillment with the case
Introduction to Management
Taught by Diana Shakes
September 24, 2012 