World Duty Free Group will start operations at Helsinki Airport (HEL) next year following Finnish airport operator, Finavia Corporation’s decision to stop operating stores at the airport.

 

WDFG will enter Helsinki in March 2014 and the first newly-renovated shops will open in 2015 from when Finavia will no longer have shop operations of its own at the hub for national airline Finnair. Finavia is pulling out because it says it seeks to ensure its duty free and travel retail business “develops to international standards”.

 

Finavia says that the award to WDFG, which was competing against other major European operators, is part of the corporation’s objective to “continuously improve passenger services and the customer experience”.

 

Finavia comments: “Through passenger services, Finavia can continue to maintain a competitive price level at Helsinki Airport and other Finavia airports for airlines.” Anne Gullstén, Director at Finavia, adds: “With the external partner, the goal is to seek better service, new brands and an appealing product range. We will also introduce other special shops in cooperation with the new operator.”

 

As part of the new contract, WDFG will operate 11 stores, of which four will be duty-free and duty-paid stores, including two walk-throughs, offering the core categories of beauty, liquor, tobacco and confectionery. The retailer will operate around 2,500sq m for the core categories. It will also operate seven speciality boutiques, totalling approximately 600sq m, that will enable the company to expand its luxury offer.

 

DOUBLING PER PAX SPENDING

Last month, Gullstén (right) told TRBusiness that, as part of a major revamp of the shopping offer at HEL, she expected to see a doubling of retail spending. “We currently have sales of €7 per departing passenger and we want to double that in five year time. We have such good development of passengers from Asia and Russia that I am very optimistic on this,” adding that Helsinki Airport is “the financial key to the health of regional airports” of which there are 24.

 

Jukka Isomäki (left), Vice President of Commercial Services, Finavia adds: “Growing passenger numbers to Asia have changed the demand. We have a goal to increase non-aviation revenue and also to improve the passenger experience.”

 

WDFG is now committed to making substantial investments at the airport retail offer and its future development. “The planned shop investments with international capital will create new jobs, and a major operator will also provide the staff and new international opportunities,” claims Gullstén.

 

The deal is a major win for Milan-listed WDFG which opens up the northern European market for the primarily UK and Spain-based DF&TR operator. This market is dominated by Germany’s Gebr. Heinemann.

 

José María Palencia Saucedo (below right), CEO of World Duty Free Group, comments: “During the next 20 years, half of the growth of world air traffic will come from the Asia Pacific region. We are delighted to have won this opportunity to operate at Helsinki Airport. Its unique geographical location – the shortest route between Europe and Asia – makes Helsinki Airport the main European gateway to Asia with over 1.8m passengers on Asian flights in 2012.

 

“We know we can create a first world-class airport shopping environment here and we look forward to working closely with Finavia to take travel retail to the next level for its passengers.”

 

When the first WDFG shops at Helsinki Airport open in the spring, about 50 Finavia employees will transfer as existing employees to the Finnish subsidiary of WDFG.

 

DEVELOPMENT PROGRAMME 2020

Finavia will launch an extensive development programme at Helsinki Airport with the goal of retaining good flight connections in Finland and to improve HEL’s position as a transit airport against international competition. The programme is focused mainly on increasing check-in and transit travel capacity and improving traffic arrangements. Helsinki Airport hopes to serve 20m passengers by the early 2020s.

 

Last year the airport – the only hub in a portfolio of 25 operated by Finavia – transported 14.87m passengers, making it the fourth busiest airport in the Nordics. But growth was flat against competitor increases of between +2.7% and +4.6%, in these two cases from Copenhagen and Oslo airports, respectively.