Following today’s announcement that Finnair Travel Retail (FTR) is selling its airport shop operations to World Duty Free Group, the division has confirmed a partnership with Gebr. Heinemann to develop its remaining inflight and pre-order business.

 

Last year, inflight revenue made up slightly more than airport shop revenue for FTR, TRBusiness understands.

 

The deal is part of a wider-ranging effort from the airline to build up inflight as a core ancillary revenue earner and as a service. That effort includes a big investment in a new inflight sales system from GuestLogix that will launch in September – and the later integration into an improved inflight entertainment system (IFE) which is part of the drive towards ‘Digital Finnair’.

 

The sales and procurement deal with Hamburg-based duty free and travel retail operator Heinemann falls between a straight supply contract and a full concessionaire approach according to Timo Kousa (left), Managing Director of Finnair Travel Retail.

 

A LONG-TERM DEAL

He tells TRBusiness: “It is a unique partnership in which we will develop the business and the assortment together.” Crucially Kousa adds: “We will keep the revenue in our hands.”

 

The new cooperation, described as long-term, will involve purchasing, logistics as well as sales and marketing activities and it starts from the third quarter. Heinemann will be carrying out all inflight and pre-order assortment negotiations for FTR for the upcoming winter season to be available from early November 2014.

 

“We wish to provide our passengers world-class products and a distinctive shopping experience. Inflight sales’ importance as an ancillary revenue channel is growing rapidly, and the cooperation with an industry-leading operator enables us to develop this activity further,” says Kousa.

 

ASIA FOCUS

In enhancing its buying operation, Finnair hopes to capitalise on its increasing traffic to Asia. The passenger profiles and consumption habits here are expected to drive up revenue for both parties. “Synergies reached by the partnership will contribute to a ‘leading edge’ position in the already well-established Asian travel retail market,” says FTR in a statement.

 

Commenting on the deal, Nadine Heubel, Sales Director Inflight & Catering at Gebr. Heinemann, says: “We’ve been focusing on the inflight market for three years with a dedicated sales department with more than 16 employees. The partnership with Finnair is unique. We will work very closely with the Finnair travel retail team to implement all our service elements from crew engagement to digital commerce.”

 

Heinemann’s inflight department currently supplies over 40 airlines with a wide range of inflight-boutique and buy-on-board products from its central logistic centre in Hamburg.