SOUTH KOREA REPORT: INCHEON AIRPORT
Boutiques operated under DF3 will be located in two facing parades of shops in the central concourse, with each shopping parade occupying 1,500sq m, giving a total combined area of 3,000sq m to house boutiques of various sizes. Following preliminary discussions,
IIAC provisionally allocated Louis Vuitton a 550sq m boutique position in the middle of the central shopping concourse, while doing the same for Chanel in a 400sq m boutique facing it on the opposite side of the concourse.
Final T2 decisions due soon The retail space provisionally allocated to Louis Vuitton in T2 is the same area as the current T1 boutique, Kim noted, enabling the brand to achieve an equal presence in both terminals. “We have had preliminary talks
with Louis Vuitton and Chanel about T2. It’s listed in the RFP with provisional locations and shop sizes,” Kim said. “It’s difficult for operators to
negotiate with Louis Vuitton and Chanel over a shop location and size, that’s why we put provisional locations and shop sizes in the RFP. “But it’s the operator’s final
decision as we cannot choose the brand selection. Also, the two brands are autonomous; they and the operator could say ‘no’. “After we select the concession
passenger handling capacity by one third when Phase 1 of the new terminal becomes operational. Incheon’s passenger capacity will
almost double when all planned flight gates become operational as part of Phase 2, with completion slated for 2023. Kim was able to share the targeted
capacity numbers following each phase of the project and told TRBusiness that upon completion of T2’s Phase 1 build the terminal will be able to serve 18m passengers, whilst completion of Phase 2 will increase T2’s full capacity to 46m passengers. In 2023 Incheon Airport’s total
Heinemann hits $4bn in group turnover in 2016
Fighting talk from TFWA President
passenger capacity will rise to 100m passengers annually. As the airport transforms, there
are plans in place to relocate Korean Air to T2 from T1’s east wing along with several Sky Team airline alliance members currently using the concourse. Asiana Airlines, South Korea’s
China committed to domestic tourism drive
other scheduled carrier, will move from T1’s west wing to replace Korean Air in T1’s east wing. Asiana, in turn, will be replaced
Also inside
in T1’s west wing by Cathay Pacific, Singapore Airlines and various other foreign carriers that now use the T1 concourse, leaving mostly LCC carriers to use the concourse in future. Moving Korean Air to T2 will
winners we will have final negotiations to finalise the brand selection.” Due to open in December this year, T2 will increase Incheon Airport’s
LAGARDÈRE IN ROME | ACI CONFERENCES’ REVIEW | LOTTE DUTY FREE | DFS GROUP SHILLA | SUNRISE | EVER RICH | CHANGI AIRPORT | SINGAPORE CRUISE CENTRE | CHINA DUTY FREE | INCHEON AIRPORT | HDC SHILLA | HANWHA GALLERIA | SM DUTY FREE WILLIAM GRANT & SONS | PERNOD RICARD | BROWN-FORMAN | BEAM SUNTORY | BACARDI BEAUTY IN ASIA REPORT | COTY’S PHILIPPE MARGUERITTE | PEOPLE NEWS | NOW & THEN
handle about 70% of Incheon’s total passengers in 2018 and a slightly lower share of duty free sales. IIAC currently expects overall sales
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result in about 30% of Incheon Airport’s passengers using T2 into 2018 while the portion of duty free sales in T2 will be greater due to the higher spending power of Korean Air passengers. T1 as a result is expected to
to increase in both T1 and T2 in 2018 as T2’s opening will remove congestion in T1 and provide passengers in both terminals with a more spacious environment. That is if the THAAD missile issue
is resolved by then and passenger numbers grow at the previously forecasted near double-digit rate.
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An uncertain time ahead As has been well reported, commercial operations including duty free sales at Incheon Airport have entered an uncertain period. This follows the Chinese
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government’s decision to ban group tours to South Korea as part of a series of reprisals over the Seoul government’s decision to permit installation of the United States THAAD missile system. However, the current uncertainty
over Chinese visitor arrivals this year follows a strong increase in duty free revenue at Incheon Airport in 2016. Total duty free sales reached
Special promotions have been developed to target price-sensitive customers flying with low cost carriers.
MAY 2017
US$2bn at Incheon last year, registering double digit growth as
TRBUSINESS 95
May 2017 20
YEARS 1997-2017
SM DF, which already operates at Incheon, was one of the SMEs who attended the T2 tender presentation.
TRBusiness Annual South Korea Report
Hong Seok Ho
“LCC passengers are very price sensitive and find it easy to access the Internet…LCC passengers mostly use online duty free shopping services, but they do buy in airport shops what they cannot buy online.”
Top Asia Pacific operators drive global growth
Exclusive: Coty details $12.5bn P&G acquisition
Shinsegae shoots for $1bn sales target in 2017... p115
Kim Bum Ho, Incheon International Airport Corporation (IIAC)
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