LEADER/NEWS Leader Inflight retail market divide widens


It has been well-reported by TRBusiness that airlines continued to battle adverse operating conditions in 2018, with some reporting serious losses in recent months (Ryanair, recently revealed a deficit of €20m/$22m in Q3 2018). As was perhaps inevitable, some onboard


boutiques and bistros have also struggled to boost stagnant SPP levels, however this is


by no means the case for all. There are many airlines that remain positive about the future of inflight retail and one of the leading legacy carriers in Asia insists it is even ‘excited’ about the potential of this business. Cathay Pacific tells TRBusiness (p23) that there is no reason why this ancillary revenue stream can’t evolve in the same way as the High Street and insists shopping on airlines should be as easy as using Amazon. Still, while some carriers look to the future, others are


dismally stuck in the past, remaining plagued by a one-sided and inadequate commercial model and clunky (and therefore costly) supply chain logistics. In last month’s Global Industry Survey, numerous suppliers


insisted that high listing fees were threatening the future of the business, pushing established brands out of the channel completely, while making it impossible for start-ups to break into the market.


In it for the long-term? In this issue, Scorpio Worldwide CEO Stuart McGuire tells TRBusiness that it is simply not right for airlines to increase listing/ advertising fees to compensate for a decline in sales. “This is only a short-term potential remedy and is not sustainable,” he says (p31). However, if the airlines can make better use of technology to


extend their product ranges beyond the aircraft itself – in order to work around weight and space restrictions – in addition to conducting targeted marketing campaigns with suppliers, the future of inflight retail certainly begins to look brighter. Aside from the Inflight Report, TRBusiness publishes its analysis


and research on the segment known as ‘Affordable Luxury’, dissecting the term itself while revealing how consumers define it through an exclusive study conducted by m1nd-set. Also in this issue, TRBusiness provides comprehensive reports


on the tobacco and shisha categories as both embark on new phases in their evolution within duty free & travel retail. Talking tobacco, we look closely at the latest ITP developments in addition to assessing the market in an era of regulatory uncertainty. Despite this, Luke Barras Hill discovers that ‘sweeping gains’ were made in duty free tobacco last year (p45). Within this year’s shisha report, Andrew Pentol hears from the


category’s top-performing suppliers and retailers who are seizing opportunities for growth. We hope you enjoy this month’s issue.


Charlotte Turner, Managing Editor FEBRUARY 2019


Bahrain Duty Free’s net profits rise +5.3% in 2018


Bahrain Duty Free Shop Complex (BDFSC) has reported a +5.3% net profit increase to $19.8m for the year ended 31 December 2018, compared to $18.8m the previous year. The company also achieved operating profit of $16.2m


compared to $14.3m during the year before. This represents an increase of +13.1%. Total operating expenses rose by 13.6% to $35.7m. Revenue rose by 13.8% to $96.6m compared to $84.8m the


year before. Total Investment income fell by 19.4% to $3.6m from $4.5m during the previous corresponding period the year before. BDFSC ended the year positively, achieving Q4 revenue of


$24.7m compared to $22.6m in Q4 2017, an increase of +9.3%. Operating profits amounted to $4m compared to $3.3m the year before, an increase of 21.7%. This was driven by strong sales growth in the quarter.


‘Important strategic progress’ made Net profits were $2m compared to $3.3m in the previous year’s corresponding quarter, representing a decrease of 36.7%. Farouk Al Moayyed, Chairman, Bahrain Duty Free Shop


Complex says excellent results were achieved in 2018, with double-digit growth in revenues and operating profits. He added that the company has made important strategic progress to ensure continued success in the future. Abdulla Buhindi, Managing Director, BDFSC indicated that


sales growth had surpassed budget and expectations of the previous year. He also said BDFC’s ‘excellent growth’ in sales and operating


profits were a testament to the company’s decision in 2016 to make a significant capital investment into the renovation of the shops. Many new brands were introduced in the perfume and


cosmetics area as well as a new premium watch boutique. These contributed to the overall performance of the shop, according to BDFSC.


TRBUSINESS 13


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