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CHAPTER 14 Case Studies This chapter presents case studies of concession programs at selected domestic and international airports. The airports presented are as follows: • Dallas/Fort Worth International Airport • San Francisco International Airport • Tulsa International Airport • Portland International Airport • Amsterdam Schiphol International Airport • Seoul Incheon International Airport • Copenhagen Airport Each airport case study presents an overview of the airport, organized as follows: • Ownership/Governance • Traffic Overview • Passenger and Market Characteristics • Estimated Sales and Revenue • Sales per Enplaned Passenger • Concessions • Terminal Configuration • Commercial Strategy • Unique Concessions and Innovations 14.1 Dallas/Fort Worth International Airport 14.1.1 Ownership/Governance Dallas/Fort Worth International Airport (DFW) is governed by a 12-member Airport Board of Directors (Board). Seven members of the Board are appointed by the Dallas City Council, and four are appointed by the Fort Worth City Council in accordance with each City’s ownership interest in the airport. One nonvoting member rotates on an annual basis among the cities of Coppell, Euless, Grapevine, and Irving. The Board is a semi-autonomous body charged with governing the airport and may enter into contracts without approval of the City Councils. The Board appoints the Chief Executive Officer, who is charged with the day-to-day operations of the Airport. The Chief Executive Officer, in turn, hires a professional management team to assist him in that responsibility. 216

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Case Studies 217 14.1.2 Traffic Overview In 2009, DFW ranked fourth in the United States and seventh in the world in terms of total passengers with 26.7 million annual enplaned passengers. DFW is served by 18 airlines, includ- ing 11 domestic passenger airlines and 7 foreign flag carriers. The airport is the largest hub and headquarters for American Airlines and American Eagle. 14.1.3 Passenger and Market Characteristics O&D passengers account for 43% of total passenger traffic, and connecting passengers account for 57%. DFW passenger demographics vary somewhat by terminal. For example, in Terminal A, connecting traffic makes up more than half of all enplaning passengers (62%), who are largely busi- ness passengers (63%) and mostly male (64%). Sixty-eight percent of the passengers are between 25 and 54 years old. Of this group, 50% had household incomes above $75,000 and 30% had house- hold incomes over $100,000. Terminal E is at the other end of the market spectrum and has 86% O&D traffic with 55% leisure passengers and 54% males. Sixty-four percent of the passengers are between the ages of 25 to 54. Household incomes were higher for customers in Terminal E; sixty percent had incomes over $75,000 and 38% had household incomes of $100,000 or more. 14.1.4 Estimated Sales and Revenue DFW had total concession sales of $264 million in 2008, as shown in Table 14-1. The difference in passenger demographics is partly reflected in the spend rates in the terminals. Other factors, including size and location of concession space, passenger volumes, and the range of concessions offered, also affect spend rates. Table 14-2 shows the variation in food and beverage and retail spend rates by terminal. Terminal D functions as a domestic terminal for American Air- lines and as the major international terminal for the entire airport and handled 2.6 million enplan- ing international passengers in 2008, more than 95% of total international enplaned passengers. The international passengers drive higher retail spend rates. Terminal D produced sales per enplaned passenger that averaged 145% of the airport average. Duty free sales in Terminal D were $4.17 per international enplaned passenger in 2008. Sales per enplaned passenger by category are shown in Tables 14-2 and 14-3. DFW achieved sales per enplaned passenger of $8.39 on the core concessions of food and beverage and retail, as shown in Table 14-3. Table 14-1. Annual concession sales by category (Dallas/Fort Worth International Airport)—2008. Concession sales Net revenue to DFW (millions) (millions) Food and beverage $ 145.0 – Specialty retail 66.9 – Convenience retail 31.5 – Duty free 11.0 – Advertising 10.2 – Telephone, Wi-Fi n.a. – Other concessions n.a. – $ 264.6 n.a. Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009).

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218 Resource Manual for Airport In-Terminal Concessions Table 14-2. Enplaned passengers, sales, and sales per enplanement Table 14-3. Annual sales per by terminal (Dallas/Fort Worth International Airport)—2008. enplanement (Dallas/Fort Worth International Airport)—2008. Enplaned Concession Sales per Percent of Terminal Share Share passengers sales enplaned airport Sales per enplaned Category (millions) (millions) passenger average passenger Food and beverage $ 4.99 Specialty retail 2.31 A 7.146 25% $ 53.5 22% $ 7.49 89% Convenience retail 1.09 B 3.777 13% 28.6 12% $ 7.57 90% $ 8.39 C 8.193 28% 56.1 23% $ 6.85 82% D 6.731 23% 81.8 34% $ 12.15 145% Duty free (1) $ 4.02 E 3.134 11% 23.1 9% $ 7.37 88% (1) Per international enplaned passenger. 28.981 100% 243.1 100% $ 8.39 100% Source: LeighFisher. Data from Airport Revenue Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). News Fact Book 2009 (Airport Revenue News 2009). 14.1.5 Concessions DFW has the largest direct leasing concession program of any U.S. airport. The airport has more than 120 food and beverage locations and more than 100 retail shops. In each food category in food and beverage, there is a range of choices for travelers including familiar national brands and offerings from regional and local operators: • American (9 concepts, 15 locations) • Asian (2 concepts, 4 locations) • BBQ (3 concepts, 6 locations) • Cocktail Lounges (4 concepts, 7 locations) • Coffee (2 concepts, 18 locations) • Delis and Bakeries (6 concepts, 12 locations) • Desserts and Snacks (7 concepts, 22 locations) • Fast Foods (8 concepts, 21 locations) • Grand Hyatt Dining (3 concepts, 3 locations) • Italian (3 concepts, 4 locations) • Mexican (6 concepts, 7 locations) The airport classifies its retail locations into the following: • Accessories and Gifts • Apparel • Books and News • Children’s • Convenience Stores • Duty Free • Education/Language • Home and Electronics • Sports • Tax Free and Texas Gifts Services offered at DFW include the following: • ATMs • FAX • Western Union • FedEx and U.S. Postal Service • The Neat Company (scanners)

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220 Resource Manual for Airport In-Terminal Concessions Table 14-4. Concession space by terminal (Dallas/Fort Worth International Airport)—2008. Enplanements Concession space Space per 1,000 (millions) (sq ft) Enplanements Terminal A 7.1 45,129 6.3 Terminal B 3.8 34,035 9.0 Terminal C 8.2 42,373 5.2 Terminal D 6.7 60,788 9.0 Terminal E 3.1 40,812 13.0 29.0 223,137 7.7 Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Connecting passengers make up more than half (57%) of enplaning passengers. Connecting passengers typically spend at a rate of about 60% of O&D passengers. In order to realize high aver- age sales, it is important to provide concessions close to the departure gates to serve time-sensitive connecting passengers. The size of the airport makes it challenging for some connecting passengers. For example, Amer- ican Airlines passengers are spread over Terminals A, C, and D. The airport built its Skytrain sys- tem to make it easier and faster for passengers to connect between terminals. There are two Skytrain stations in each terminal. The Skytrain system allows for faster concessions and more time for use of concessions. The curvilinear terminal has aircraft parked on only one side. Therefore, departure gates are dis- tributed over a wider distance than conventional, double-loaded terminals with aircraft on both sides of a pier or finger. This makes for longer walking distances, and, as the terminal is curved, it is difficult to see concessions around the bend. The airport is adding concession space around the Skytrain stations, which are heavily traveled by connecting passengers and which are also located opposite the major security checkpoints. Thus, the areas around the Skytrain stations are exposed to large concentrations of both connecting and O&D passengers and are the most desirable area in which to cluster concessions. The DFW Board has a policy of encouraging ACDBE participation, and the airport has one of the largest ACDBE programs in the nation. The direct leasing program provides numerous oppor- tunities for small, local, independent businesses to compete for concession privileges. In addition, larger packages include ACDBE goals to encourage subleasing. Overall minority business goals, including ACDBE goals, are approximately 35% as a percentage of sales. This goal is regularly surpassed. DFW minority concession sales account for more than half of total concession sales. The concession program is an important part of DFW’s overall brand strategy. 14.1.8 Key Concessionaires Food and beverage concepts include Au Bon Pain, Auntie Anne’s, Ben & Jerry’s, Bennigan’s, Blue Mesa Café, Burger King, Camille’s Sidewalk Café, Cantina Laredo, Champps, Chili’s, Cool River, Cousin’s Barbecue, Dickey’s BBQ, Dunkin Donuts, Freshen’s Yogurt, Manchu Wok, McDonald’s, Pizza Hut, Popeye’s Chicken, Starbucks, Subway, Taco Bell, TGI Friday’s, The Grove, Varsity Grill, and Wendy’s, among others. Retailers include Airport Wireless, Bijoux Terner, Border’s Newsstand, Brighton, Brooks Broth- ers, Brookstone, Official Dallas Cowboys Pro Shop, DFW Travel Mart, Fossil, Hudson Booksellers, InMotion Pictures, Jethro Pugh Shops, Johnston & Murphy, La Bodega Winery, Landau, L’Occitane, Natalie’s Candy, PGA Tour Shops, Simply Books, Starbucks, Rosetta Stone, Sue Venier, Techshowcase, and Z Market, among others.

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224 Resource Manual for Airport In-Terminal Concessions Table 14-5. SFO concession sales and revenue—2008 (millions). Domestic International Revenue to Total Sales Terminals Terminal Airport Food and Beverage $ 98.0 $ 28.8 $ 126.8 11.9 Convenience Retail 21.3 12.6 33.9 7.0 Specialty Retail 56.0 25.7 81.7 11.2 $ Subtotal $ 175.3 $ 67.1 242.4 $ 30.1 Duty Free $ 1.4 $ 66.9 $ 68.3 — Passenger Services n.a. n.a. 36.0 3.8 n.a. n.a. Advertising 9.8 6.9 n.a. n.a. Currency Exchange 0.1 0.1 356.6 $ 176.7 $ 134.0 $ $ 40.9 Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). 14.2.4 Estimated Sales and Revenue Total concession sales by category for SFO’s domestic and international terminals are sum- marized in Table 14-5. Sales and revenue per enplaned passenger at SFO are summarized in Table 14-6 below. SFO sales averaged $11.70 per enplaned passenger for combined food and beverage, specialty retail, and convenience retail—the third highest average amount in the United States (after Pittsburgh and New York Kennedy Airports). SFO’s overall food and beverage sales per enplane- ment are the highest in the nation. The airport received net revenue of $1.62 per enplaned passenger from food and beverage, specialty retail, and convenience retail sales. International enplaning passengers spent an average of $15.27 in duty free shops, which provided net revenue to the airport of $4.06 per international enplaned passenger. Advertising sales of $0.53 produced net revenue of $0.37 net per enplaned passenger. 14.2.5 Concessions At SFO, Food and beverage concessions include 65 units, 27 concessionaires, and 75,500 square feet of space. Food and beverage concessionaires include D-Lew Enterprises, which operates cafes Table 14-6. SFO sales and revenue per enplanement by category for domestic and international terminals—2008. Sales per Enplanement Revenue per Enplanement Domestic Domestic International International Total Sales Total Terminals Terminals Terminal Terminal Food and Bev erage $ 7.24 $ 5.77 $ 6.85 $ 0.72 $ 0.42 $ 0.64 Convenience Retail 1.57 2.52 1.83 0.29 0.60 0.38 Specialty Retail 2.24 5.14 3.02 0.36 1.26 0.60 Subtotal $ 11.05 $ 13.43 $ 11.70 $ 1.37 $ 2.28 $ 1.62 Passenger Services n.a. n.a. $ 1.94 n.a. n.a. $ 0.21 Advertising n.a. n.a. 0.53 n.a. n.a. 0.37 Currency Exchange n.a. n.a. 0.01 n.a. 0.02 0.00 $ 11.05 $ 13.43 $ 14.18 $ 1.37 $ 2.30 $ 2.20 Duty Free (per In'l enplane) $ 2.25 $ 17.39 $ 15.27 $ 0.58 $ 4.63 $ 4.06 Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009).

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Case Studies 225 and two successful casual dining restaurants; the Bay Area Restaurant Group; Bayport Concessions; Boudin Sourdough bread; Gotham Enterprises, which operates several Firewood Cafés and Peet’s coffee kiosks; and local restaurants Andale, Ebisu, Osho, Sankaku, and San Francisco Soup Com- pany. SSP America and HMS Host also operate at SFO, combining for about 22% of the total food and beverage space. Retail at SFO includes 76 locations, 23 concession agreements, and 77,900 square feet of space. Convenience retail is operated by HMS Host, Hudson News, Pacific Gateway, and Paradies Shops. Local bookseller, Books, Inc., operates a major bookstore in Terminal 3 and will open one in the new Terminal 2. Specialty retail operators include Airport Wireless, Brookstone, B-zinc, Erwin Pearl, Ghirardelli Chocolates, Hudson Booksellers, InMotion Entertainment, MNG by Mango, Pacific Outfitters, San Francisco Museum of Modern Art (MOMA) Shop, Sunglass Hut, Techshowcase, and Tumi Luggage, among others. Duty free at SFO includes 11 locations, one concession agreement, and 30,700 square feet of space. The duty free concessionaire is DFS Group, which operates two main shops totaling 22,000 square feet, as well as Coach and Gucci branded boutiques, two branded duty free kiosks, and two smaller “last chance” shops. DFS also either operates or subleases all post-security retail spaces, many of which are subleased to ACDBEs, including Pacific Gateway, which operates all of the post- security newsstands. DFS also operates two pre-security Sephora shops. Services at SFO include checkpoint mailing facilities; a travel agency; a full-service banking cen- ter; laptop workstations; a hair salon; spas; a pharmacy; and a medical clinic that provides travel medicine, urgent care, immigration physicals, and occupational health services. The airport offers free Wi-Fi, which was formerly operated as a concession. Other amenities include family rest- rooms and showers. The SFO Kids’ Spot play area features interactive attractions for the Exploratorium of San Francisco. Travelex America, Inc., provides currency exchange and ATM services. Express Spa operates two locations. Clear Channel Airports is the advertising concessionaire at SFO. 14.2.6 Terminal Configuration The airport has four terminal buildings. Terminal 1 was built in the 1970s and has limited post- security space and an excess of pre-security concession space. Terminal 2, the oldest terminal at the airport, is undergoing a $380 million reconstruction and will provide 14 additional domestic gates. The terminal opens in 2011 and will handle American Airlines and Virgin America, which is grow- ing its San Francisco schedules. Terminal 2 is discussed later in this section. Terminal 3 handles a majority of the airport’s total passenger traffic. Concession space is almost entirely post-security. The International Terminal has 23 wide body gates on two concourses, each with its own security checkpoint. Arriving passengers in Terminal 3 can connect to one of the two concourses at the International Terminal through a secure connector, eliminating the need for an additional secu- rity inspection. The configuration of the four terminals is shown in Figure 14-6. Table 14-7 summarizes concession space by category, and Table 14-8 summarizes concession space per 1,000 enplaned passengers. Space in the domestic terminals is somewhat constrained, as the average of 6.2 square feet per 1,000 enplaned passengers includes considerable pre-security space in Terminal 1, which is of marginal utility. The airport is considering a series of improve- ments to increase the amount of concession space in Terminal 3, used by United Airlines, which has the highest spend rates on the airport.

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226 Resource Manual for Airport In-Terminal Concessions Terminal 3 Terminal 2 Terminal 1 International Terminal (opens 2011) Source: Flysfo.com (As of October 10, 2010). Figure 14-6. SFO terminal configuration. 14.2.7 Commercial Strategy SFO has adopted a strategy to be the “airport of choice” for the Bay Area, which includes a focus on providing a quality customer experience. The airport utilizes the direct leasing approach and has one of the largest direct leasing programs in the United States. SFO has favorable demographics for concessions, including passenger incomes higher than state and national averages; a mix of long-haul international passengers (22%); a large number of inbound and outbound leisure passengers, including tourists visiting San Francisco; and domestic long-haul passengers, including transcontinental and Hawaii passengers. The airport views food and beverage as an essential customer service with quality and value tak- ing precedence over revenue. Beginning in the late 1990s with the development of the concession program in the International Terminal (which opened in 2001), the airport made a major effort to attract local restaurateurs. Because it was a new terminal, the concessions at the International Ter- minal were not under the exclusive rights of the then-current master food and beverage agreement. The Airport Commission employed a developer to develop the food and beverage services based on (1) attracting local restaurants offering “the best of San Francisco” and (2) lowering the rent structure for food and beverage in recognition of the cost structure of smaller lease packages and the relatively high labor and other operating costs typical of the Bay Area. The program was a suc- cess, and a similar strategy was adopted for the domestic terminals in 2005 and implemented by the airport, with local businesses winning 80% of the spaces. ACDBEs won a 70% share. The local Table 14-7. SFO concession space by category (square feet)—2008. Food and Specialty Convenience Duty Free Total Retail Beverage Retail 10,745 470 88,997 Domestic Terminals 51,517 26,265 8,712 30,216 94,098 International Terminals 23,983 31,187 30,686 183,095 75,500 57,452 19,457 100% 31% 11% 17% Percent by category 41% Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009). Table 14-8. SFO concession space per 1,000 enplaned passengers (square feet)—2008. Convenience Average per Food and Specialty Duty Free Retail terminal Beverage Retail 0.7 0.0 6.2 Domestic Terminals 3.6 1.8 7.5 2.1 7.3 22.6 International Terminals 5.8 3.1 1.0 1.6 9.8 Average—all airports 4.1 Source: LeighFisher. Data from Airport Revenue News Fact Book 2009 (Airport Revenue News 2009).

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Case Studies 237 long before the commercialization trend began in the late 1980s, using a single terminal, pier/ finger concept to encourage transfer passengers and to create a major tax and duty free shopping opportunity. 14.5.1 Ownership/Governance Amsterdam Schiphol Airport (AMS) is owned and operated as a subsidiary of the Schiphol Group, which also operates other commercial airports in the Netherlands including Rotterdam the Hague Airport, Lelystad Airport, and Eindhoven Airport. AMS is run as an independent commer- cial company. Plans to privatize the airport were abandoned in 2007. Schiphol Group is owned by the Kingdom of the Netherlands (70%), the Municipality of Ams- terdam (20%), Aéroports de Paris (8%), and the Municipality of Rotterdam (2%). Schiphol Group has a corresponding 8% interest in Aéroports de Paris, with which it established a strategic alliance after the merger of Air France and KLM airlines. Schiphol Group is overseen by a Supervisory Board and managed by a senior management team that includes a Chief Executive Officer, a Chief Operating Officer, a Chief Financial Officer, and a Chief Commercial Officer, who oversees the consumer (retail) and real estate business areas. Schiphol Group also has ownership stakes in Terminal 4 at New York’s John F. Kennedy Air- port (40%) and Brisbane (Australia) Airport (18.7%) and interests in various cargo, logistics, and real estate and development companies. 14.5.2 Traffic Overview AMS handled 43.5 million passengers in 2009. It is the fifth busiest airport in Europe and served 284 destinations in 93 countries and 92 scheduled airlines. The top European and intercontinental destinations are shown in Table 14-13. 14.5.3 Passenger and Market Characteristics Passengers’ reasons for travel are a mix of leisure and business travel, as shown in Figure 14-11. The nationalities of its passengers reflects AMS’s role as a connecting airport that draws from the surrounding region, as shown in Figure 14-12. Only 33% of passengers are from The Netherlands. The average departing passenger spends more than 2 hours (140 minutes) at the airport, includ- ing 27 minutes in the landside area, 57 minutes in the departures area, and 56 minutes at the depar- ture gate. Passengers are 61% male and 39% female. Table 14-13. Top 10 destinations (Amsterdam Schiphol Airport). Europe Intercontinental 1 London Detroit 2 Barcelona New York 3 Paris Minneapolis 4 Madrid Hong Kong 5 Copenhagen Bangkok 6 Rome Curacao 7 Munich Nairobi 8 Zurich Singapore 9 Frankfurt Toronto 10 Milan Kuala Lumpur

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240 Resource Manual for Airport In-Terminal Concessions and employees working in the terminal and adjacent landside commercial office buildings. The airport is exempt from restrictions on local shop hours. The post-security duty and tax free shops are branded See/Buy/Fly with a distinctive blue logo on a bright yellow background. AMS has resisted the trend of branding airside shops. Like a depart- ment store, the airport shops are mostly generic shops selling a category such as “electronics” or “fashion.” However, the airport is expected to add some branded shops in the future. Many of the shops in Schiphol Plaza are branded, including H&M, Esprit, Nike, The Body Shop, and Mexx. Food and beverage shops are distributed around the terminal, but most of the larger units are located on a mezzanine level. This preserves valuable departures-level space for more lucrative duty free and retail concessions. 14.5.8 Unique Concessions and Innovations Some recent concession innovations at AMS include the following: • A high-end cognac shop, L’Essence de Courvoisier, offering premium cognac. The shop also has a diamond promotion with a local jeweler. • The opening in two locations in the departures area of Xpress Spa, the U.S. concessionaire. • 2008 opening of Vizzit and since then opening of several Vizzit shops in the departures area. Vizzit is a shop featuring the airport’s best selling products, including liquor, perfume, cos- metics, souvenirs, snacks, and promotions. • Opening of Jill & James, a landside shop combining a range of services including post office, drugstore, dry cleaners, shoe repair, clothing alterations, ATM, and employment agency. • Privium, a membership service offered to frequent flyers that provides expedited security screening, use of business class check-in counters, iris screening and expedited international arrivals inspection, use of a dedicated lounge, and shopping discounts at duty free and other retail shops, with special discounts and promotions for members. • The Holland Casino, located post-security, and open to passengers over 18 with a boarding pass. Lockers are provided for hand baggage. One innovation is Schiphol Group’s development of a proprietary quality-of-service monitor- ing system called Airport I.Q. Monitor, a tool for measuring customer satisfaction. The airport con- ducts in-person interviews of departing and arriving passengers several times each year during peak, low, and shoulder seasons. The sample size takes into account all of the major airport user groups. Airport I.Q. Monitor is used to monitor a full range of airport-provided and contract ser- vices, including concessions, and this monitoring can in some cases result in incentive payments to or penalties for concessionaires. Another innovation is the inclusion in the terminal of an art museum affiliated with the Ams- terdam Rijksmuseum, which features rotating exhibits of Dutch masters’ paintings. 14.6 Seoul Incheon International Airport Incheon International Airport (ICN) is the primary international airport serving Seoul and is the principal international gateway to Korea. The airport has been named “world’s best airport” in the ACI-World Airport Service Quality survey for the past 5 years (Incheon International Airport Corporation 2010, p. 13). ICN is positioning itself to become a connecting hub for North Asia and is developing an exten- sive route network into China. ICN is highly commercialized and one of the top three airports in the world in terms of concession sales and revenue, taking full advantage of originating Korean passengers and their strong appetite for duty free products.

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242 Resource Manual for Airport In-Terminal Concessions 14.6.5 Concessions There are 70 food and beverage outlets, including Bennigan’s, Burger King, KFC, Subway, Bohemian Kitchen, Dunkin Donuts, Doughnut Plan NYC, Hoa Binh, McDonald’s, Hotdog On, Shanghaideli, and Kraze Burger’s. These outlets include a number of Korean restaurants as well: Bon Bibimbap, Jeontong Tukpegi, Biwon, Gayageum, Jayeon, and Mr. Kim among others. Specialty coffee includes Starbucks, Coffee Bean & Tea Leaf, Caribou, and Nescafe among others. There are three duty free concessionaires—Schilla Duty Free, Lotte Duty Free, and the Korean National Tourism Organization. The three concessionaires operate category shops featuring the major categories (tobacco, liquor, perfumes and cosmetics, and electronics) as well as fashion bou- tiques including Bally, Cartier, MaxMara, Coach, Gucci, Celine, Bvlgari, Hermes, Fendi, Dior, Armani, Salvatore Ferragamo, Prada, Furla, MCM, and Chanel. The specialty retail program is primarily in the landside area and includes The Face Shop, VOV, Missha, Skin Food, Etude House, Aritaum, The Olive Young, and GS Books. Services include baby care lounges for children under 3 years of age and their guardians with nursing rooms, diaper-changing stations, reclining chairs, washstands, and water filters; an opti- cian; laundry and dry cleaning; a medical center; pharmacies (airside and landside); a hair salon (Sergio Bossi); baggage storage; and mobile phone rental. 14.6.6 Terminal Configuration The passenger terminal building includes 50 frontal gates and two concourses totaling 24 gates, which are used by Asiana and Korean Air. Ticketing areas are clustered by airline alliances, with Korean Air and Asiana occupying spaces near the center of the terminal. In 2008, a remote 28-gate satellite was opened that handles all other international airlines. Passengers reach Concourse B by an underground train, which is accessed at the center of the post-security side of the terminal build- ing. The passenger flows through security to the train station expose passengers to a large cluster of luxury boutiques in the main terminal, plus a large concession program in the remote concourse. The terminal configuration is shown in Figure 14-15. Concessions are located on multiple levels. In the public areas of the terminal building, Level 1B has space for concessions and services geared towards the employee market and visitors using the parking structure. Level 1F is the arrivals level and includes convenience retail and food and bev- erage and services including hotel counters, mobile phone rentals, and ground transportation. Level 3 is the public departures area and features an array of quick-serve food and specialty coffee units and some convenience and specialty retail. All post-security concessions are on Level 3 or Level 4. The Level 4 landside area overlooks the ticketing area and includes an array of formal restaurants and bars and cafes, as well as observation spaces, a bookstore, and some quick-serve units. The post-security area on Level 3 has 66 duty free shops in 172,160 square feet of space. Overall, the airport has more than 300,000 square feet of concession space spread over four lev- els, or about 20 square foot per 1,000 enplaning passengers. This space ratio is more than twice that of the average U.S. large hub airport terminal. 14.6.7 Commercial Strategy Experience at SEL airport and the historically high duty free sales at major department stores demonstrated that there could be considerable demand for duty free and other concessions in the new airport. Existing demand combined with rapid growth of gross domestic product and dis-

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Case Studies 243 Source: www.airport.kr (As of October 12, 2010). Figure 14-15. Terminal layout (Seoul Incheon International Airport). posable income resulted in forecasts of high concession sales. Therefore, concession planning was an integral part of the planning of the new airport’s terminal. ICN has kept up with rapid passenger growth by developing capacity in advance of when it is needed and paying meticulous attention to the details of the passenger experience. The airport company has also added concession space where possible to keep up with demand. A future ter- minal expansion is planned that will bump out the terminal to create even larger concession areas in the post-security areas of the terminal. The airport company has also developed the terminal complex to match airlines and passen- gers with concessions. Korean passengers and other international passengers have different buy- ing and brand preferences. The two Korean carriers, Korean Air and Asiana, each use departure gates on one side of the main terminal, while foreign airlines use remote Concourse B. This allows for developing concessions that are geared towards the passenger mix in each area. China is expected to become an increasingly important passenger segment. ICN has 20 routes to cities within China, and spending by Chinese nationals has been steadily increasing as both traf- fic and the middle class in China continues to grow. 14.6.8 Unique Concessions and Innovations When ICN remodeled and expanded its concessions, the airport company made a major effort to create a superior experience for connecting passengers, who are at the heart of IIAC’s long-term strategic plan. Amenities for connecting passengers include the following: • Internet lounges located on the mezzanine and post-security that include small cafes, wireless, and sponsored computer terminals. Fax, scanning, and business services are also available.

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244 Resource Manual for Airport In-Terminal Concessions • An IT experience center sponsored by SK Telecom that provides high-speed access and includes displays of current and future mobile information technology. • Airstar Terrace, an area on the terminal mezzanine with views of the airfield and terminal apron. Designed to serve long-dwell-time connecting passengers, the Airstar Terrace includes a book café offering coffee and newsstand items, a free Internet lounge, a juice bar, and a design gallery featuring local artists. • The “Spa on Air” sauna, which offers hotel-quality facilities and service and the country’s first “tub-in-tub” (one bathtub inside another), as well as Thai-style massages. The spa also has meet- ing rooms, sleeping rooms, and a snack bar. • The Cultural Museum of Korea operated by the National Museum of Korea and located in the airside Transfer Lounge. The museum houses Korean relics covering 5,000 years. 14.7 Copenhagen Airport 14.7.1 Ownership Copenhagen Airport (CPH) is principally owned by MAp Airports (54%), formerly Macquarie Airports and now a separately listed company, and the Government of Denmark (39.2%). No other shareholder has more than a 5% stake. 14.7.2 Traffic Overview In 2009, CPH handled 9.7 million enplaned passengers. The airport has a strong catchment area due to its location in Scandinavia. It is the principal airport serving the city of Copenhagen, which is the capital of Denmark, with a population of 1.8 million. CPH is also the dominant airport in Denmark, which has a population of 5.4 million. The top 10 destinations and top 5 airlines for CPH are shown in Table 14-15. CPH is a hub for SAS Airlines, a member of Star Alliance. SAS is partially owned by the Govern- ments of Denmark, Norway, and Sweden. CPH is the busiest airport in the Nordic countries. Con- necting passengers make up 26% of total passenger traffic. Low-cost airlines have a 14.5% market share. To attract this business, the airport has developed a terminal with limited amenities and reduced airline charges. CPH was a strategic investor in and technical advisor to Mexico’s Southeast Group of airports and sold its stake in 2010. Table 14-15. Top 10 destinations and top 5 airlines (Copenhagen Airport). Top Destinations Top 5 Airlines 1 London 1 SAS 2 Oslo 2 Norwegian 3 Stockholm 3 Cimber Sterling 4 Aalborg 4 EasyJet 5 Amsterdam 5 KLM 6 Paris 7 Helsinki 8 Frankfurt 9 Zurich 10 Brussels

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246 Resource Manual for Airport In-Terminal Concessions Source: CPH.dk (As of October 12, 2010). Figure 14-18. Terminal layout (Copenhagen Airport). 14.7.6 Commercial Strategy CPH is well positioned in terms of facilities, location, and airline service to act as a hub for much of Scandinavia. The high VAT rates and duties on luxury goods provide a strong opportunity for the airport and its duty free and tax free shops for passengers embarking on international flights. VAT rates in Denmark are 25% (meaning VAT comprises 20% of the cost of most items). Other countries in the region have similar high tax rates. The airport company has developed a shopping street reminiscent of the Strøget, the city’s famous pedestrian shopping street. Denmark is known for Scandinavian design, and the airport shops include well-known Danish designers including Georg Jensen and Royal Copenhagen. The airport recently opened a tax free arrivals shop where passengers can buy a range of per- fume, cosmetics, chocolate, beer, and wine at the same price as in the departure shops. The airport and the duty free operator absorb the taxes to make this offer attractive. The arrivals shop is also promoted as reducing passengers’ carbon footprint, as the passenger does not have to take the added weight on his or her trip. 14.7.7 Concessions There are 10 duty and tax free shops, 71 specialty shops, and 17 restaurants and bars, with a total of 106,000 square feet (10.7 square feet per 1,000 enplaned passengers). The airport is developing a new consolidated security checkpoint that will feed a 17,000 square foot, flow-through duty free shop, which will exit into the current terminal concession mall. A total of 50,000 square feet of space is planned or in development. After expansion, the airport will have 15.8 square feet per 1,000 enplaned passengers at current traffic levels. Food and operators are SSP and HMS Host. Concepts include Baresso Coffee, Burger King, Caffé Ritazza, Ciao, Eyecon Restaurant and Bar, Joe & The Juice, Kitchen & Co., Kobenhavn, McDonalds, and Starbucks. The duty free operator is Geber Heinemann. Other retailers include Georg Jensen, Royal Copen- hagen, Aigner, AK Kaufmann, Bvlgari, Burberry, Caviar House, Ecco, Gant, Gucci, Hermes, Hugo Boss, Ilhums Bolighus, Lego, Lisbeth Dahl, Montblanc, Porsche Design, Ralph Lauren, Sand, Tie Rack, Tumi, Versace, and WHSmith.

OCR for page 216
Case Studies 247 Services include an in-terminal Hilton Hotel, meeting facilities, banks, travel agency, pay passenger lounges, children’s play area, and currency exchange. 14.7.8 Unique Concessions and Innovations Some of CPH’s unique concessions and innovations are the following: • Duty free shopping at least 24 hours in advance of flight. Merchandise is then ready for pick up at counters in one of the five duty free shops • A Tax-Free Club offering regular discounts on merchandise • Price guarantee to beat department stores by 20% • A women-only cocktail lounge, planned as a refuge for single women business travelers • An iPhone app showing arrivals, departures, shops and restaurants, and special promotions