Duty-free Store Operates Contract-free

Sakal Duty Free has been operating its electronic goods outlet at Ben-Gurion International Airport without a contract during the past week.

Sakal's franchise came to an end on November 20 as the company's talks with the Airports Authority failed to bear fruit. The authority and Sakal are trying to close a deal under which Sakal will continue to run the electronic goods store at Ben-Gurion until the winner of October's tender is announced.

Industry sources said that the Airports Authority has created a situation in which it is at the mercy of Sakal if it wants to keep the airport's duty-free stores open.

Last year, Sakal lost tens of millions shekels at its duty-free stores at the airport, claiming that the losses stemmed from a fall-off in passenger numbers and franchise conditions that do not suit the state of the market. Sakal wants a significant improvement in its franchise terms. "Sakal has financial demands amounting to more than NIS 100 million from the Airports Authority," Kobi Sakal, the group's deputy CEO for marketing, said.

The Airports Authority had held talks with Sakal on the company's continued operations of the airport's duty-free electronic goods store at the airport until they were moved to the new Ben-Gurion terminal currently under construction. When the talks ran aground, the authority announced it would publish a double tender for the operation of the electronic goods store under which the winner for the new terminal would operate the existing store in the interim.

However, as the Airports Authority published the tender only in October, there is still a gap between the culmination of Sakal's franchise and the selection of the new tender winner.

Authority sources said that the talks with Sakal were expected to be concluded soon and that in the negotiations, the authority has the best interests and the welfare of the public at the forefront of its concerns.