Kansai Airport T1 spend growth ‘up’ post-renovation

By Luke Barras-hill |

Credit: Kansai Airports.

Japan’s Kansai International Airport (KIX) has reported a better-than-expected passenger spending performance since the opening of the newly renovated international departure area at Terminal 1 last year.

As reported, operator Kansai Airports – the consortium comprising Vinci Airports and Orix Corporation – revealed a refreshed airside commercial space on 5 December housing 27 retail, F&B, luxury boutique and service units in the international post-security area, including a first-of-a-kind 2,500sq m walkthrough duty free store from KIX Duty Free.

Updating TRBusiness, Stephane Geffroy, Chief Commercial Officer (Non Aeronautical) at Kansai Airports, said: “Overall, the results so far have been much beyond our expectations and we are very happy.

“It shows the experience we are offering to passengers is something that works well for them, they can find what they are looking for, have enough time for shopping both in the core categories but also in luxury, which typically takes more time. F&B is extremely successful as well.”

While not revealing specific figures, Geffroy said Kansai Airports is witnessing “significant” growth in spend per pax, which TRBusiness understands to be in the order of double digits despite the current dearth of Chinese passengers within the KIX spending mix, versus pre-Covid.

L-R: Keiji Takano, Executive Officer & Deputy Chief Commercial Officer (Non Aeronautical), Kansai Airports; Stephane Geffroy, Corporate Executive Vice President & Chief Commercial Officer (Non Aeronautical), Kansai Airports; and Fumio Owada, Representative Director & President, Kansai Airports Retail & Services.

Converting dwell to spend

Alongside a wide-ranging offer available at the KIX Duty Free walkthrough unit spanning perfumes & cosmetics, liquor, tobacco and confectionery, passengers will encounter a reconfigured commercial area featuring luxury labels such as Louis Vuitton, Dior, Chanel, Hermes and Gucci, alongside speciality and local retail and F&B units.

The new retail and F&B eco-system at T1 is being aided by the centralising of security and immigration functions to optimise international passenger traffic flows.

As reported, the new commercial layout groups four ‘mood’ areas within a central plaza: ‘Fun’, ‘Curious’, ‘Active’, and ‘Peaceful’.

“As it’s a large area, we created four ‘moods’ with specific designs but also trying to match merchandising with the design to create a different experience,” continued Geffroy.

“It gives structure to the space and reasons for passengers to move and look around,” he explained. “We are happy that we have relatively long dwell times; about 70% of passengers have more than 90 minutes of dwell time.

“It has proven successful as even with locations that could have been considered more difficult in the current space, we are achieving a good performance and results.”

While the metrics are promising, Geffroy acknowledges that the walkthrough format is relatively new in Asia; exploiting its potential is something KIX is actively working on, as TRBusiness learns.

Fumio Owada, Representative Director & President at Kansai Airports Retail & Services, which runs KIX Duty Free, spoke about bringing the first full-scale walkthrough environment in an Asian airport commercial environment to travellers.

“At first, departing passengers tend to be very fast [moving]. At the entrance, we’ve put some luxury cosmetics brands like Chanel and Dior. We are trying to slowdown departing passengers as much as possible by doing some activities and activations. It is getting very successful in driving sales.”

The next phase of the terminal’s transformation is the renewal of the security area, which will add smart lanes to expand capacity at the security control zones.

A grand opening for Terminal 1 is expected to take place before the commencement of the Expo 2025 in Osaka, Kansai next spring, when all functions related to the departure and arrivals areas of the airport are expected to be completed and passenger capacity is expected to increase from 23 to 40 million passengers annually.

The newly renovated airside international departure area at KIX Terminal 1, featuring 27 retail, F&B, luxury boutique and service units including the KIX Duty Free walkthrough store, was inaugurated on 5 December. Credit: Kansai Airports.

To date, Kansai Airports has implemented 10,000sq m of refreshed airside commercial space with an additional 6,000sq m understood to be slated for delivery in 2026.

“That will be the objective – we are currently in preparations for the tender,” added Geffroy.

Kansai Airports declined to comment further on the bid plans.

The company, which also operates Osaka International Airport (Itami Airport) and Kobe International Airport (UKB), reported a doubling of its non-aeronautical business revenue year-on-year in its consolidated financial results for the fiscal year ending 31 March 2024, released last month.

It attributes the ‘significant’ increase in non-aeronautical revenue to the opening of the new airside commercial area at KIX.

Kansai Airports’ duty free revenue surged 458% compared to FY2022 (but remains approximately 34% down on 2019 levels), while retail and F&B sales grew 183% year-on-year and have now surpassed 2019 levels (102%).

Source: Kansai Airports. Click to enlarge.

Operating revenues increased by 87% year-on-year to JPY186.8 billion/$1.24 billion, as EBITDA surged 169% to JPY78.2 billion, helping the company to a net profit of JPY15.5 billion, the first recorded surplus in four years.

Passenger traffic at KIX grew 125% to 25.8 million versus the same period, buoyed by strong international departure and arrival passenger movements following the end of border control measures in April last year.

International air traffic movements increased 114% year-on-year, with the number of foreign (non-Japanese) passengers on international flights totalling 15.02 million – the second highest on record since the opening of KIX.

READ MORE: Kansai Airports looks to Kobe after KIX renovation

READ MORE: Kansai Airport gears up for opening of new T1 international departure area

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