Piret Mürk-Dubout, Tallinn Airport, Chairman of the Management Board, CEO reveals how the airport worked with Baltona to emphasise Estonian culture in-store.

Tallinn Airport has reflected on an ‘extensive project’ which led to the official opening of the new 800sq m Baltona Duty Free walkthrough departures store on 21 June.

The shopping area at Lennart Meri Tallinn Airport had been under development since the start of 2017 with the new Baltona Duty Free shop concept launched in May.

Despite on-site building work and the re-location of shops and cafes, the airport increased concession revenues by +11.3% in 2017.

The seven-year contract, which Flemingo-International owned Baltona secured last March, includes two last-minute outlets for transfer and non-Schengen passengers, totalling around 180sq m. The contract began in the first quarter of 2018.

COMMERCIAL OFFER

In addition to the duty free outlets, the airport has nine other stores offering food and beverage, Estonian fashion, souvenirs, food and beverage and electrical items among others.

Speaking to TRBusiness in Tallinn following the completion of formalities on the day of the official opening, Piret Mürk-Dubout, Tallinn Airport, Chairman of the Management Board, CEO said: “It was an extensive project which resulted in the delivery of the customer experience we visualised.

“We worked hard on the customer journey with Baltona along with the actual concept to emphasise Estonian culture, especially nature. We wanted the design to show some of the things we are proud of in Estonia. I think the cooperation has been very good.”

Reflecting on a competitive tender process, which attracted the likes of Gebr Heinemann and Lagardère Travel Retail, Dubout commented: “It was a competitive tender and complicated in a positive way.

“It encouraged participants to consider the holistic concept in terms of creating the shopping experience. Looking back, maybe not all participants offered a holistic approach when it came to creating synergies with local brands, local offerings and promotions and thinking of the future in a digital way.”

Regarding the decision to offer a seven-year contract instead of a five-year agreement like in 2012, she explained: “This time, we have enlarged the area and enriched the offering. We felt a bigger shop would provide a better platform to offer excellent quality of service.”

The winner of the tender back in 2012, which Baltona Duty Free also took part in, was Inflight Service Estonia. Its EuroShop Airport and ferry operations were purchased by Lagardère Travel Retail in 2016.

The new 800sq m Baltona Duty Free walkthrough departures store officially opened on 21 June.

STRONG CO-EXISTENCE

The strong co-existence between landlord and retailer in the period between the awarding of the contract last year and opening of the stores in 2018, suggests the ingredients are there for a positive partnership.

“This was a huge investment from both sides,” Dubout remarked. “Renovation and construction work took time, but everything went very well. Ultimately, we were able to enlarge the area. We needed to operate at the same time as renovating, so as the previous retailer was closing down, Baltona began operating in small areas.”

Shedding further light on the airport’s aim to create a ‘digital experience’, Dubout suggests engaging customers from the planning stage of their airport journey is crucial.

“The planning element is more focused on how much time it takes them to pass though the airport and the products and services available to them. We will consider concepts like online pre-order as part of our plan to create a commercial platform to engage more with customers.

“This is not only because the whole world is moving online, but because such an initiative will enable us to gain more customer feedback.”

In addition to the expansion and reconstruction of the airside traffic area in 2017, various other projects were completed at the airport, which handled 2.65m passengers last year.

The €127m ($147.3m) development programme included the extension of the runway and implementation of a new state-of-the-art pre-flight security check-point, doubling capacity during peak hours.

Piret Mürk-Dubout, Tallinn Airport, Chairman of the Management Board, CEO and Piotr Kazimierski, CEO Baltona Duty Free at the recent inauguration in Tallinn.

DUTY FREE IMPORTANCE

The importance of the duty free development, however, in the context of all other initiatives, must not be underestimated, according to Dubout. “The duty free element is very important. It covers the largest area in terms of overall commercial space.”

Over the next seven or so years, Dubout hopes Tallinn Airport can contribute to the Estonian economy, individually and collectively in partnership with Baltona.

“For our small economy, it is important we have very active air traffic and incoming tourism. Our goal is to become a five million passenger airport by 2024, have a large cargo facility and achieve feedback from all our customers indicating we are the world’s cosiest airport.”

Pressed by TRBusiness on whether the airport can realistically fulfil its ambition of handling five million PAX by 2024, Dubout said: “Last year, we registered passenger growth of +19% which was very high. I may sound very ambitious, but if economic growth continues and oil prices do not increase too much, then five million passengers [by 2024] is certainly achievable.”

Looking back on a challenging 2017 commercially, Dubout recalls how food and beverage consumption increased and average spend per passenger dropped.

“The average consumption basket is declining. We wanted to stop that decline with all the renovations. We have a very broad sense of non-aviation revenue. This includes parking, taxi concessions, services, cafeterias, restaurants and shops.”

Meanwhile, Dubout, who reveals Estonians, Russians and Scandinavians are among the top-spending nationalities and that beverages, cosmetics and ‘any kind of local brands’ generate strong sales, added: “The unique thing about us is that almost half our passengers are business travellers. Our split is almost 50% leisure and 50% business. That is a very healthy split within the business environment.

“As some of our brands are known in the region, people come to the airport a bit earlier. They do so because of the atmosphere and the fact there is plenty do while waiting for their flights.”

Piret Mürk-Dubout, Tallinn Airport, Chairman of the Management Board, CEO giving a speech at last month’s official unveiling.