Centrair posts record duty free sales as attention turns to new T2 opening

By Luke Barras-hill |

TomozoeCentrairmainDuty free and tax free revenues at Japan’s Chubu Centrair International Airport scaled new heights in 2018.

Speaking to TRBusiness during last month’s TFWA Asia Pacific Exhibition & Conference in Singapore, Masanao Tomozoe, President and CEO, Central Japan International Airport Co. Ltd, discussed how the airport located south of Nagoya in Central Japan has reconfigured its boutique and duty free offer in response to growing passenger numbers.

[Click below to view video].

Duty free sales at Centrair climbed by 17.9% to JPY23.9bn ($220.5m) in full-year 2018, documents seen by TRBusiness reveal.

Total commercial sales at Centrair reached JPY38.5bn ($355.2m). This includes income from other (non-duty free) shops at JPY9.1bn ($83.8m) and restaurants JPY5.5bn ($50.7m), with duty free accounting for more than 50% of the operator’s income.

“Having a reasonably comfortable profit from duty free can allow us to reinvest in other things,” explained Tomozoe. “A key point is not only the facilities; we are working very hard on training our staff members and quality control.”

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A new and exciting retail offer is expected at the new Terminal 2, which is due to open on 20 September. Source: Centrair.

NEW DUTY FREE AT T2

In a wide-ranging interview, Tomozoe touches on the importance of the Boeing-inspired Flight of Dreams complex and looks ahead to the planned opening of the airport’s new Terminal 2 on 20 September, aimed at serving rising low-cost carrier traffic.

Last year, the airport handled 12.4m passengers and hopes to hit 15m this year. Domestic passengers (6.3m) accounted for more than half the 2018 total, followed by international Japanese (3.2m) and foreign nationals (2.9m). The current terminal has a passenger capacity of 17m.

Once the new terminal opens, the current terminal will be named ‘Terminal 1’.

Occupying a total floor space of 40,000sq m, Terminal 2 will benefit from the latest equipment in fast travel and smart security, including check-in counters, security check areas and boarding gates capable of processing domestic or international flights.

Self-bag drop facilities will also alleviate queues and waiting times for low-cost passengers at the two-storey facility, which will be able to process 4.5m passengers (international: 3m; domestic: 1.5m) upon opening.

“The new terminal has three airlines announced – Air Asia, Air Busan and Jeju Airlines,” said Tomozoe. “The main terminal is still a very important mainstay for duty free sales, but in the future with the [Terminal 2] expansion and more passengers coming from China there is an opportunity for further growth.

“We are tight in terms of the spaces available at Terminal 1 so we created Terminal 2 and basically this is for LCCs. We will have a new duty free shop area taking care of new customers such as those from LCCs. That will free-up the main terminal but I think we have to refurbish this within the mid-term.”

Currently, Chinese passengers account for approximately 40% of inbound international tourist arrivals to the airport and unsurprisingly, spend-per-head levels are higher compared to other nationalities.

“When it comes to the proportion of duty free sales among all the nationalities, the Chinese are highest,” noted Tomozoe.

Turning to the 2020 Summer Olympics, which is being hosted in Tokyo, the Central Japan International Airport Company President and CEO said: “Many people will come through Tokyo but I’m sure they’ll like to utilise their stay in Japan. It’s a very important to get our name out.

“We have renowned service levels and are a champion of regional airports. Hopefully this will provide more opportunity to attract passengers.”

REFRESHED COSMETICS & FASHION

In the more immediate term, Japan will welcome tourists from all over the world for the Rugby World Cup, with four or five games potentially taking place in the region.CosmeticsfashionCentrair

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Masanao Tomozoe, President and CEO, Central Japan International Airport Company.

“This will test how we can cater for this influx of people overseas and we are interested in that,” added Tomozoe.

Meanwhile at the current terminal, the airport renewed its duty free cosmetics and fashion offer in April at the Passenger Terminal Building 3F, international departures after security.

Centrair has introduced a variety of new brands including Giorgio Armani, Ipsa, Jo Malone London, La Prairie, MAC, Pola, Suqqu, Three, Tom Ford Beauty, Tabitus and Daks.

The new additions bring the total number of new international and national brands available in the renewed duty free area to 46.

Behind the renewal was a desire to improve access between the duty free area and boutique areas.

The airport opened arrivals duty free outlets in April 2018, joining the likes of Tokyo Narita and Kansai International Airports who have already implemented shops.

Sales from arrivals duty free accounts for approximately 2-3% of Centrair’s total duty free sales.

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