SEA Milano, the operator of Milan’s Malpensa (MXP) and Linate airports, is expecting a big hike in retail sales following the near completion of a €30m ($40.5m) overhaul of its services at MXP’s terminal one – where Dufry has just put the finishing touches to a 2,000sq m walk-though DF&TR store.

The overhaul now allows passengers to go through security on the same level as check-in and then take escalators down to a much enlarged and newly zoned shopping area. The new terminal layout is very spacious and airy – with security lanes increased by 50% from 14 to 21. It also ensures that 100% of passengers enter Dufry’s new central store which, at 2,000sq m, is double the size of the old store.

Director of Commercial Non-Aviation, Luigi Battuello has overseen the staged opening of a number of elements of the new T1 retail such as Piazza del Lusso [featuring more than a dozen top end names like Gucci, Burberry and Bulgari], and more recently Piazza del Gusto [featuring many prestige boutiques like Furla and Gallo].

He has high expectations of the project given the major brand arrivals and/or enlargements that are now trading. Still to be completed is the final Piazza del Pop shopping area where a number of brands such as Desigual, Coccinelle and Moleskine are already present. Some of the individual boutique spaces range from 180sq m [among the biggest in the industry] to 50sq m.

AN AMBITIOUS TARGET

In advance of the ACI Airport Commercial & Retail Conference that opens tonight in Milan, he tells TRBusiness: “With the new space, more flights and a more attractive environment we expect, this year, to grow by +20%… that’s the target.”

That is a big leap up from 2014. Last year, the non-aviation business recorded income (net of inter-company) of €168.1m, up +3.0% on 2013. Retail income was up +2.4% while income from shops reached €37.9m, up +2.3% on 2013.

These rises were a strong performance given the disruption caused by works that were being carried out during the year including the partial closure of a number of areas for the completion of the restyling of T1.

The revamp hit average spending per passenger which fell by -5% vs 2013 with a big spending drop by Russians (-13%) and Ukrainians (-21%) due to the devaluation of the rouble and the Russian-Ukrainian crisis.

However, Chinese passengers make up a bigger proportion of traffic with 700,000 at MXP – and their numbers are increasing. They also spend six times that of the average passenger so their presence will be crucial in achieving the double-digit increase set out in SEA’s business plan.

Emirates from Dubai has also started operating daily flights to New York from MXP [under 5^th Freedom aviation rights]. By doing so it not only brings high-spending Middle Eastern travellers to MXP’s stores, it is effectively using the Milan airport as a hub and, from next month, it will also start operating the route with an A380.

T1 at MXP is SEA’s retail core as it is the home of the airport’s intercontinental traffic. Retail revenue from MXP’s 18.6m passengers is about four times that of LIN (9m pax) which, as a city airport, is constrained by its location and runway capacity.

[A full report on the MXP retail revamp will appear in a future issue of TRBusiness magazine.]