Milan MXP T1 drives retail surge for SEA

By Kevin Rozario |

SEA Milano logo1New retail facilities, introduced last year at terminal one of Milan Malpensa Airport (MXP), have pushed up revenue from shops by +17.6% year-on-year at SEA Group, the operator of MXP and Milan Linate (LIN) airports.

Total shop revenue reached €46.2m/$52.7m enabling the retail sector – which also includes car rentals, F&B and bank services – to grow by +12.3% in comparison with 2014 (see chart below and click to enlarge).

Over the course of 2015, SEA’s non-aviation sector generated revenue of €214.9m/$245m, an increase of +5.7% and contributing 31% of the group’s total revenue.

Retail components at SEA.

Retail components at SEA.

These positive figures are mostly the result of the new central duty free store run by Dufry and the new luxury piazzas as well as changes to passenger flows, introduced in T1 last year. A key element was the relocation – in April 2015 – of the security area to the check-in floor, from which all passengers then moved into a single commercial area on the floor below.

Spend per head has risen sharply.

Spend per head has risen sharply in MXP T1.

The effect of the changes on individual spending is that revenue-per-passenger surged by over +24%. Spend per passenger increased to €11.58 from €9.32 in 2014 (see chart right and click to enlarge).

CHINESE UP, RUSSIANS DOWN

Making a significant contribution to these results were Chinese passengers, whose numbers increased by +25% in 2015 and whose spending increased by +8%. However, due to the devaluation of the rouble, spending by Russian passengers “remained in a critical state” says SEA, down -23.6% on last year, and in line with tax-free transactions in the same period.

According to SEA “spending by American passengers picked up impressively (+37%) and spending by UAE passengers also showed double-figure growth (+27%)”. On average, the Chinese and Russians remained the high fliers in terms of individual spending at x4.2 and x3.4 the average at the airport (see chart below and click to enlarge).

 

SEA spend by national FY15POSITIVE INTERCONTINENTAL MOMENTUM

Referring to the passenger traffic situation, SEA Chairman, Pietro Modiano, is optimistic.

He notes that while overall growth was “satisfactory” at just +1.6% [despite the EXPO 2015 event in the city], the high-yield segment – key to duty free and travel retail sales – was very good.

Modiano says: “The increase in passenger traffic was significant above all in its higher-value component of intercontinental traffic which represents the heart and very reason for the activity of Malpensa airport.

sea president pietro modiano

Modiano: ‘MXP is now one of the most dynamic in Europe in terms of international traffic growth’.

“This surpassed 5.6m passengers, with a +4.8% increase compared to 2014 [which was +11.8% up on 2013]. The number of intercontinental passengers rose by 816,000 units during the two-year period.

“Milan Malpensa is now one of the most dynamic in Europe in terms of international traffic growth, and indicative of a marked recovery in the international context following the difficult years following Alitalia’s de-hubbing.”

Structural aid to MXP’s international recovery has come in the form of the completion of the North Satellite – used for intercontinental flights – and the restyling of T1 and the upgraded retail offering as described above.

SEA Group’s financial and operating highlights are shown below.

 

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