SATS in travel retail JV

A joint venture has been formed in Singapore to provide inflight shopping, supply liquor for inflight catering, and run on-ground retail stores, including duty-free.

Through its wholly owned subsidiary Asia-Pacific Star Private, catering supplier SATS has joined Duty Free Air Ship and Supply (DFASS) as an equal partner in the new company, DFASS SATS.

As well as providing inflight duty-free and duty-paid sales, the company will offer mail-order and pre-order services for these items.

It will also bid for the duty-free concession at Marina Bay Cruise Centre Singapore (MBCCS), which would enable it to offer cruise passengers ground-based travel shopping. MBCCS is run by SATS-Creuers Cruise Services, a 60:40 joint-venture between SATS and Creuers del Port de Barcelona.

Under the terms of the agreement, DFASS will transfer certain assets, including merchandise inventories and point-of-sale devices, to DFASS SATS in exchange for ordinary shares in the company. SATS will match the value of DFASS assets by injecting about S$11.4 million in cash, subject to independent valuation.

SATS will contribute to the joint venture by providing bar-cart packing, warehousing and cabin-loading services, while DFASS will continue to drive the airline and ground retail program management, including merchandising and sourcing. The new company will use DFASS point-of-sales equipment and back office, as well as its eCommerce technology.

This will result in more convenient shopping opportunities in the fast-growing travel-retail market, says SATS president/CEO Alex Hungate. “Together we will innovate and develop new ways of selling to travellers and fulfilling their orders.”

“SATS serves millions of passengers and end-users each year, and we are able to gain insights about passenger consumption behaviour,” says DFASS Group owner/chairman/CEO Bernard Klepach. “I see synergy partnering with SATS where we leverage each other’s core strength to enhance our offering to Singapore-based airline customers.”

Listed on the SIngapore exchange since May 2000, SATS provides gateway and food services in Asia with a presence at 43 airports in 11 countries across Asia and the Middle East.

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