INFLIGHT: GEBR. HEINEMANN


Playing the right inflight card A


Careful and considered nurturing of the inflight retail channel to drive profitability in the long term remains essential, as Gebr. Heinemann Sales Director, Inflight & Catering John Baumgartner tells Claire Malcolm.


t last year’s TFWA Inflight Workshop,


association Managing Director John


Rimmer was quick to point out that despite a steady worldwide deterioration in sales from 2009 to 2015, the decline in inflight was showing signs of improvement (-6.6% in 2016 versus -9% in 2015). However, data from Counter


Intelligence Retail (CiR) indicates that there’s still a long way to go. According to analysis, 40% of passengers do not even recall seeing an inflight offer but remarked that if they had, at least 30% would’ve been motivated to purchase. Notwithstanding Qantas and


United Airlines joining the latest casualty list of inflight duty free, other airlines are ushering in a new phase of onboard retailing. UK-headquartered Flybe made


the bold move to reinstate duty free services on selected (historically lucrative) European routes in Q1 2017, while AirAsia is working to ensure that – as part of its push to become an all-round digital airline – it includes a digital ancillary revenue strategy. This will focus on optimising


connectivity access to everything from seat selection and in-seat Wi-Fi, to food and beverage and duty free. For John Baumgartner, Sales


Director, Inflight & Catering, Gebr. Heinemann, it all drills down to taking charge of your own business destiny. “The rapidly changing landscape


leads to various positive initiatives, with the goal to improve the whole retail offering within many airlines and we see that the airlines that are able to focus on the right things are indeed successful,” he tells TRBusiness. “Just in the last two months I have


spoken to four big airlines that have all stated that the retail programme is an important revenue stream and an important customer satisfaction


FEBRUARY 2018 Gebr. Heinemann warehouse in Hamburg.


parameter and they are looking to get even more out of this in the future.” He has also previously praised the


agility of low-cost airlines in making retail decisions and moving product, citing Heinemann partners such as Ryanair, easyJet and Wizz Air, although the offering is distinctly different from the legacy carriers. Geography and the role of


differing economic jurisdictions is also a strategic influencer, according to Baumgartner. “The Nordic countries that pay


high taxes and Asia with its emerging middle-class opportunities are attractive markets for any player in the travel retail business, as well as airlines,” he says. “However, I believe that the main


driver of success is the commitment from a specific airline to retail and to do it in the best way possible, given particular airlines’ unique business environment (including geographical scope) and opportunities. There is no ‘one-size-fits all’ solution; each airline needs to find the best programme suited to them.”


Collaboration challenge A deterrent for some brands who are put off by the sale or return aspect or listing costs, and clearly of waning appeal to some airlines,


Baumgartner is open to suggestions when considering new routes to business growth, but stops short when it comes to exploring potential synergies between onboard and airport duty free. “There have been talks and


even trials, but it is a very complex landscape to navigate. Maybe we could ‘grow the cake’, but how? And who will invest and risk current profits, and how will possible growth be shared? There are many stakeholders and many current P&Ls to protect,” he explains. “Personally, I still believe the


airlines sit on great assets when it comes to reaching and connecting with passengers and when these assets are used efficiently the results are great. “A collaboration with the airport


retailer and the landlord could be beneficial in some cases. We all have to play with the cards we have been


“A collaboration with the airport retailer and the landlord could be beneficial in some cases.”


John Baumgartner, Sales Director, Inflight & Catering, Gebr. Heineman


TRBUSINESS 29


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