This article first appeared in The Edge Malaysia Weekly on July 27, 2026 - August 2, 2026

MALAYSIA Airports Holdings Bhd (MAHB) is undertaking a benchmarking exercise of its duty-free and travel retail business Eraman to gauge its performance against regional counterparts and what measures are needed to boost passenger spending.

“We are benchmarking the performance of our duty-free business. There are indications that spending at our duty-free outlets is lower than at other airports in the region, so we want to conduct a proper assessment to understand where we stand and how we can improve,” managing director Datuk Mohd Izani Ghani tells The Edge in an interview.

His comments come amid talk that MAHB is exploring a separation of its duty-free portfolio, potentially through a spin-off or partial divestment, as the airport operator seeks to unlock greater value from the business, a source tells The Edge.

Responding to the talk, Mohd Izani says it is premature to discuss such plans.

“That will be much later. For now, we are focused on completing the benchmarking exercise. Once we have confirmed the findings, we will make recommendations and discuss with our shareholders how to move to the next stage.”

Current retail and duty-free operators with outlets at Kuala Lumpur International Airport (KLIA) include Select Service Partner Malaysia Sdn Bhd, a joint venture between British food and beverage (F&B) concession operator SSP Group plc and India’s travel food and retail company Travel Food Services Pvt Ltd, as well as Valiram Group and European travel retail giants Heinemann and Avolta.

In a December 2024 interview with The Edge, Hani Ezra Hussin, senior general manager of commercial services at MAHB, pointed out that while Chinese tourists had returned post-Covid-19 pandemic, their spending had been reduced to half of that in 2019 with their income squeezed by a weak Chinese economy and the success of Hainan’s offshore duty-free programme in retaining luxury spending domestically. Increased spending by Indian travellers had not been enough to offset the decline, she said.

MAHB was taken private in February last year by Gateway Development Alliance, a consortium led by Khazanah Nasional Bhd, through its wholly-owned subsidiary UEM Group Bhd, and the Employees Provident Fund, which together hold a 70% stake. Abu Dhabi Investment Authority and Global Infrastructure Partners own the remaining 30%.

Eraman operates more than 40 retail and F&B outlets across KLIA as well as in airports in Kuching, Kota Kinabalu, Penang and Langkawi.

The benchmarking exercise follows the completion of a years-long commercial reset at KLIA. All retail outlets at the airport are now operational, Mohd Izani says.

MAHB’s commercial reset started in 2018, but has been hit by setbacks, mainly due to the pandemic.

MAHB has become increasingly dependent on non-aeronautical income. While non-aeronautical revenue rose 57% year on year to RM1.89 billion in the financial year ended Dec 31, 2023 (FY2023), it accounted for 39% of total revenue of RM4.91 billion, compared with 47% before the pandemic in FY2019.

Mohd Izani says non-aeronautical businesses now contribute about 55% of MAHB’s revenue, reflecting the continued recovery in commercial activities at its airports.

The segment includes the duty-free business, rental and royalty income, advertising, parking, KLIA Aeropolis, maintenance and technical services, oil palm plantation operations, Sama-Sama Hotel and ISG Airport Hotel in Istanbul, Türkiye.

The group’s Sama-Sama Hotel continues to perform well, with occupancy averaging between 70% and 80%, and MAHB plans to study whether additional hotel capacity will be needed at KLIA to support future passenger growth, adds Mohd Izani.

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