The Leading Airport Magazine

Gunnar Heinemann, Co-owner, Gebr. Heinemann.

ACI EUROPE’s 22nd Annual Airport Trading Conference & Exhibition, which took place on 22-24 April, was hosted by Hamburg Airport and sponsored by Gebr. Heinemann, and successfully attracted over 320 delegates from 33 countries with 9 exhibitors throughout the 3 day event, under the theme ‘Collaboration and innovation to enhance the volume and quality of commercial opportunities for the passenger’. Sessions within the theme addressed how the airport industry in Europe can evolve effectively, to drive passenger spend in the current challenging economic environment. It also recognised the parts that profitable partnerships, creative concepts and cutting-edge technologies play, in generating non-aeronautical airport operations. Given the economic backdrop of sovereign debt crises, the rising cost of finance for airports and minimal new airline capacity entering the market, there is a growing emphasis on non-aeronautical revenues. With airports now under serious pressure to optimise these revenues, the theme was of particular relevance. The conference and exhibition allowed participants to look differently at a wider breadth of the airport business. Over the 3 day event, the conference sessions covered the myriad issues affecting airport commercial activities, such as methods used to enhance new spending opportunities, the future of brands, how to become the reference for travel retail, analysis of a low cost terminal, the value of multi-channel retailing, the e-commerce role of airports, leveraging technology in an airport environment and omni-channel retailing.

Muriel Zingraff-Shariff, Retail Concessions Director, BAA.

The turnout of delegates at the event in Hamburg clearly highlights the importance of commercial revenues to the business models of airports of all sizes throughout Europe and beyond. Senior airport commercial executives, operators and brands, as well as their business partners, were united on the importance of collaborating to maximise opportunities through strategic partnerships and pioneering innovation.

The mood at the conference was one of optimism and resilience, despite the economic and political doom and gloom making headlines in many national newspapers.

ACI EUROPE Director General Olivier Jankovec gave a detailed and insightful State of the Industry address, in which he alluded to areas such as the economic crisis, a changing market structure, a two speed Europe of changing traffic patterns and other current challenges facing the airport industry.

Michael Eggenschwiler, CEO, Hamburg Airport.

Interestingly, ACI EUROPE figures show that non-aeronautical revenues have been resilient amid the global financial crisis. Airports remain very much dependent on non-aeronautical revenues which, in 2011, accounted for 41% of overall revenues once ground handling and non-categorised income was excluded. Airport retail revenue in the European industry performed strongly, and grew by +6% in 2011 compared to 2010 figures, representing an additional €0.25 billion to what was earned in 2010. Retail concession revenue grew by +8% in 2011 compared to 2010 figures. Overall, a positive trend for airports in 2011 was evident, which is encouraging for the industry.

Olivier Jankovec, Director General, ACI EUROPE.

Speakers at the conference included representatives from various European airports, including Hamburg, Gatwick, Manchester, Zürich, Heathrow, ANA-Aeroportos de Portugal, Aéroport de Bordeaux and Aéroports de Paris. Dubai Airport was also in attendance. Other inputs came from ETRC, SSP, The Moodie Report, World Duty Free, Kraft Foods, Gunnar Heinemann, Ryanair Ltd, SITA and InterVISTAS Consulting Group.

José María Palencia, CEO, World Duty Free Group.

Patrick Graf, Senior Vice President Commercial, Zürich Airport and Chairman, ACI EUROPE Commercial Forum.

The event also saw the return of the ‘unconference session’, in which the conference room broke out into separate working areas focusing on the different topics of ‘Leveraging technology to reach passengers before and after their airport visit’ and ‘Loyalty programmes’, before reconvening to share their conclusions and analysis. The interactive format certainly seemed popular resulting in plenty of ideas and strong interaction.

Evidently, in the commercial airport sense, the fortunes of all players (airports, retailers and brands) are inextricably entwined. The consensus across the trading conference & exhibition was that well-executed airport retail undoubtedly presents large growth opportunities. However, there are still challenges that need to be addressed such as the one bag policy adopted by some low-cost carriers, whereby a fine is imposed on passengers for every item they carry beyond a single piece of cabin baggage. It clearly poses a threat to duty free and travel retail, as many passengers are dissuaded from making purchases in the worry that they will be penalised upon boarding. Another challenge is the World Health Organization (WHO) proposals to ban duty free sales of liquor and tobacco at airports. Another industry threat is security, particularly in terms of uncertainty by passengers about the exact rules governing the restrictions on liquids, aerosols and gels (LAGs) and the timeframe for their removal.

Peter Pullem, Managing Director, Lufthansa WorldShop; Jean-Luc Poiroux, Commercial Development Director, Aéroport de Bordeaux; Garry Walsh, Director of Commercial Revenue, Ryanair; and Ken O’Toole, Chief Commercial Officer, Manchester Airports Group.

The conference highlighted both the opportunities and challenges facing travel retail, as airports seek to maximise revenues. It is clear that Europe’s airports, concessionaires and brands are motivated and hard at work to deliver a great retail experience that meets the expectations of today’s airport passenger. Next year’s 23rd ACI EUROPE Airport Trading Conference & Exhibition will be hosted by Zürich Airport, in Spring 2014.