Electrical Blackout at Ben-Gurion

Sakal gives up on duty-free franchise.

The Israel Airports Authority (IAA) will soon put out a tender for a new operator for the electrical appliance and electronics duty-free shops at Ben-Gurion Airport. The present franchise holder, Sakal, will be replaced as of September 2008.

Sakal notified the IAA that it can no longer afford to meet the conditions of its present contract to operate the stores.

Sakal is estimated to have lost over NIS 50 million in the past three years since winning the airport's duty-free tender.

An attempt to lower the fees it pays the IAA for the rest of its contract period, which runs through 2013, failed.

Sakal and its duty-free stores have been suffering from competition from electrical goods stores around the country, who have slashed prices and offered big sales in order to compete with Sakal.

In addition, the opening of more stores on Saturdays has also led to a drop in duty-free sales.

The IAA said in a statement: "In order to maintain the level of service and supply to the traveling public, the authority, in conjunction with Sakal, has decided to end the contract [with Sakal]."