Building a ‘boutique airport’ in the Gulf

Bahrain has a long and proud track record as a pioneer in the world of aviation. From the early 1930s the Kingdom acted as a connection point between East and West, serving early air trade routes and becoming a strategic hub for the Northern Gulf. The first scheduled commercial flight arrived in Bahrain in October 1932 travelling from London to Delhi, with regular services soon following, establishing Bahrain as the region’s first international airport. Almost 90 years later, Bahrain is far from being the biggest airport in the region. But with its new terminal having opened on 28 January, Bahrain Airport Company (BAC) has its sights set on establishing a different kind of status in the minds of consumers and business partners. Speaking to The Moodie Davitt Report, Chief Executive Officer Mohamed Al Binfalah says: “We are positioning this airport today as a ‘boutique airport’ in the region. We are not the largest and that was never an objective. For us customer experience has been at the heart of our planning process, and has guided the whole development from the design stage.

“Bahrain International Airport (BIA) is a strategic gateway to the rest of the world, and is critical to the commercial and economic activity of the island. That’s why investing in it is a strategic decision for the Kingdom and the success of this US$1.1 billion investment is an ambitious national endeavour. “We started this project by laying the foundations in February 2016. It was implemented within a tight budget and within an exceptionally short time for its size. The other proud aspect is the talent building we have done – providing resources for this airport for years to come. So strategically we are well positioned to grow, to be creative and to take the sector to new heights.” Building with the boutique theme in mind also meant delivering a facility that conveyed elements of Bahraini life and culture. Sense of Place was therefore high on the agenda at planning stage – and has been executed with style.

Al Binfalah says: “Airports are very much alike in terms of structure, and what differentiates them from one another is character. There is nothing better than the projection of history, rich culture and arts that we enjoy on this island, and we have shown this in a diversified way throughout the terminal.” There are two dedicated showrooms that host regular archaeological, cultural and art exhibitions. “We collaborated with various entities in the Kingdom, one of those with the Bahrain Authority for Culture and Antiquities,” says Al Binfalah. “There you can enjoy a few moments to embrace the beauty of art and learn more about the history of our Kingdom that goes back over 4,000 years. We also thought that engagement with the art community is something to enhance the look and feel of the terminal. We worked with around 25 artists, including sculptors, to produce original artworks to be enjoyed through the journey from kerbside to gate and in the lounges.

Having influence over the commercial offer was a core plank of the airport strategy for the new terminal – which explains why it adopted an owned or joint venture approach to some of its key activities, from duty free to dining to lounge management. Al Binfalah says: “This model represents growth opportunities for the holding company. Gulf Air Holdings made the strategic decision to leverage the opportunities arising from the new terminal. So now they are part of the retail, the food & beverage, the hotel operation, the ground handling. All of them are operated under modern concession agreements with well-defined terms and conditions. It offers a win-win for us as the airport group and our partners, whose status is consolidated by being part of the holding company’s strategy.”

He said the move came after reflection on the “legacy concession arrangements that were not in line with market best practices” adding that the new terminal “provided us with an opportunity to create new partnerships”. “All in all we have a very diversified offer that will enrich the journey and the experience,” adds Al Binfalah. “On the retail side, we had a long association with Bahrain Duty Free. The new relationship is structured through a new joint-venture relationship with our holding group, Gulf Air Group Holdings.” Founded in December 2019, Bahrain Duty Free Company is a joint venture between Gulf Air Group (45%) and Bahrain Duty Free Shop Complex (55%). Meanwhile BAC opened up the non-core categories to tendering, through which it attracted partners such as WHSmith, Relay and Boots.

“On food & beverage,” says Al Binfalah, “we also entered an interesting JV partnership with SSP Bahrain, which has the exclusive rights to all F&B airside. Landside outlets were tendered out individually. We now have the likes of Jamie Oliver’s Pizza and Deli in the terminal, a first for the Middle East. We have showcased local talent through this SSP partnership too, through two of our concepts, which was an important element for us.” “We have new car rental partnerships, a local hospital runs the airport clinic through a commercial concession agreement. On transit hotels, we have a partnership between our holding group and Gulf Hotel Group, which manages an 80-room hotel in departures.” BAC also created its own subsidiary to manage hospitality services. “This was outsourced at one time but in 2017 we decided to insource,” says Al Binfalah. “Now Hala Bahrain is our wholly-owned subsidiary offering a range of premium hospitality services.” This offers meet and greet assistance, arrival and departure lounges, landside and airside chauffer services, porterage and trolley management services, passenger clearance assistance, e-visa assistance, floral services, luggage wrapping and Commercially Important Person (CIP) handling services. Its expanded offerings at the new passenger terminal include limousine services, valet parking and home check-in. It also provides services in the airport’s private aviation terminal.

Al Binfalal adds: “This is a differentiator for us at BAC and it is what the idea of a boutique airport is about, to create differentiation throughout the journey. For each and every type of passenger too, not just CIPs. Everyone should have this high level of service.” BAC, says Al Binfalah, is committed to delivering the ‘wow factor’ for travellers and ensuring Bahrain becomes the airport of choice for those that have options about where they fly to and from. He says: “While BIA is the only airport in Bahrain, it is not the only choice for travellers with Dammam Airport 90 minutes away. BIA also needs to attract the Saudi market to use [this] as their airport of choice.” This is why he cites new or first-to-market brands such as Jamie Oliver, Lumee and Ya Salam in F&B or Victoria’s Secret, Bath and Body Works, Apple, Cartier and Bvlgari in retail as key elements, along with the showcase for local goods offered by Souq Al Qaisariya.

Unfortunately the investment in these brands and concepts plus the high-class design and fit-out and won’t deliver returns just yet as the pandemic keeps traffic low – but the CEO is confident about the mid to long term. “It’s not fair to reflect on the performance during these difficult times,” he says, “and it’s a shame we don’t have the traffic these stores deserve. But I am optimistic that we are on the path to recovery, with vaccinations making a lot of people want to travel again. The Bahrain Duty Free portfolio is impressive. We have renowned international brands throughout across all categories, with top-class fit-outs, and passengers will be impressed by this.” BAC is determined that the traveller will be impressed in other ways too, not least by the delivery of smart digital services. Al Binfalah says: “Today’s customer is more informed, more digitised than ever. Their reliance on mobile and online is only increasing and we cannot stay behind if we want to live up to their expectations. That’s why we are investing in our IT platform. We now have the most sophisticated IT platforms, with 23 integrated systems offering full automation, self-check-in, self-bag drops, restricted area access controls, immigration, e-gates and much more. We are piloting a single solution that will eliminate use of documentation for most of the touchpoints across the journey. We aim to roll out a proof of concept soon. All of this will allow our airline and concession partners to thrive within our eco-system for years to come.”

Now that the new terminal is fully operational, BAC management is focusing on other opportunities to develop the airport real estate and seize new opportunities. “We have plans for a new General Aviation Terminal soon, hopefully to go live in the next one to two months,” says Al Binfalah. “We have taken over a new fuel farm on airport land, in partnership with the national oil and gas group, to be operational by around June. We have tendered for cargo facilities for one of our airport partners. We are in ongoing work with DHL through their Middle East hub here on the island, with their growth strategy to build capacity. We are at study stage for two new MRO hangar projects at the airport, so we have our hands full.” How that future will look in the short term is unclear, but the longer term for aviation remains bright, according to the company.

Al Binfalah says: “With this crisis, as soon as you think you have made progress in one direction, you can be hit by adverse developments in another. So it is disrupting travel development. A lot of traffic in this region goes to India, Bangladesh and Pakistan but that is heavily affected right now. “It is encouraging to see the industry looking to produce travel passes that facilitate the harmonisation of rules around proof of testing and vaccination. This will constitute a catalyst for recovery. Last year was a survival year for a lot of us, but we are out of that and you can now witness efforts to make resumption of travel a more seamless process – though we know that the virus itself has mutated and will keep us occupied for some time.” “We are trying to manage uncertainty,” Al Binfalah adds. “All we have learned about forecasting traffic – the toolbox we had – is not applicable any longer. But I’m optimistic based on Q1 figures and moving forward it will improve compared to last year. I am also satisfied with the intensity of development and that we are on the right path to a much brighter future.”