Haikou Meilan Airport on Hainan Island has reported a 14.4% increase in profit in 2013, to CNY347.11 million (US$55.95 million).
Strong growth in non-aeronautical revenue (+12.55% to CNY326.64 million/US$52.65 million) was driven by improved trading at Haikou Meilan Airport Duty Free Shop – operated by Hainan Provincial Duty Free with DFS providing consultancy services.
The airport attributed a 16.28% increase in franchise income, reaching CNY159.18 million (US$25.66 million), mainly to the expansion of the duty free operation’s retail area, increased product range and better promotional opportunities. Revenue from the duty free franchise reached CNY91.78 million (US$14.80 million). 
Rental income grew to CNY33.71 million (US$5.43 million), up by 23.06% as a result of re-planning rental space in the terminal, “enhancing investment attraction” and increasing rents.
The airport added: “The group [also] enhanced its communication with the retailers by offering advice to help them increase their sales effectively”.
Passenger traffic for the year grew by 11.58% to 11.94 million as the airport added 57 new routes to its network. Domestic traffic grew by 11.63% to 11.46 million passengers, while traffic on international routes grew by 10.43% to 474,000.
Under Hainan’s offshore duty free policy, both domestic and international passengers are eligible for duty free shopping.
Total revenue at the airport reached CNY760.28 million (US$122.58 million) in 2013, up 11.4%, while operating profit grew 13.6% to CNY391.36 million (US$63.10 million).
The airport projected sustained growth in both traffic and duty free sales in 2014. It said: “The number of domestic and overseas travellers visiting Hainan will continue to increase, laying a solid foundation for the development of Meilan Airport in 2014. 
“Hainan Island achieved offshore duty-free sales of CNY226 million (US$36.44 million) and attracted 56,000 shopping travellers during the Spring Festival Golden Week of 2014, representing an increase of 33% and 30%; sales of CNY10.41 million (US$1.68 million) on 6 February set a new single-day record of Meilan Airport Duty Free Shop.
“The current trends of operation and sales revenue [this year] are believed to be more profitable [than in 2013].”
.The airport also committed to further developing the airport duty free business in 2014, as well as introducing other innovations to grow the retail operation.
“As the operation of Meilan Airport Duty Free Shop matures, the proportion of the non-aviation revenue is likely to further increase,” it said. “In 2014, the group will continue to further increase the business area while optimising the layout of service functions, and strive to improve overall efficiency.
“The group will enrich its business model through development of commercial trading companies [and an] e-commerce platform, thereby promoting the income-generating capacity of Meilan Airport.” 
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