SOUTH KOREA: INCHEON INTERNATIONAL AIRPORT


IIAC plots T1 transformation in key retailing adjustment period


Incheon International Airport Corporation is forecasting high single-digit duty free growth this year following the opening of its new T2, but Lotte Duty Free’s termination of three concessions at T1 has complicated matters, as David Hayes reports in detail.


I


ncheon International Airport Corporation (IIAC) is targeting another year of duty free revenue


growth in 2018 after registering a strong double-digit first quarter sales increase in its airport’s shops. The newly opened T2 has helped


lift total duty free sales since its January 18 inauguration. All operators running T2 shops and boutiques appear satisfied with their outlets’ early performance in the new terminal, TRBusiness learns. IIAC managers also are pleased


with T2’s early performance as they prepare to tender the three duty free concessions that Lotte Duty Free recently terminated in T1, which will soon undergo a major modernisation and renovation programme. “For 2018 we expect duty free


sales to be above last year after opening Terminal 2,” comments an IIAC spokesperson. “Our sales rose +20% in January


and February after T2 opened – maybe the operators tried to increase their T2 sales as it had just opened. We are not sure of duty free sales growth this year. Maybe it will be +4% to +6%... We expect a higher growth rate than last year.”


MAY 2018


Daily sales up 20% According to IIAC’s figures since the new terminal opened, T2 currently handles about 30% of all passengers at Incheon Airport while T1 handles 70% of passengers. Although IIAC initially expected


the same share of duty free purchases would transfer to T2 with the new terminal opening, the sales shift has been smaller so far. Shops and boutiques in T2 accounted for 15% of total duty free revenue in Incheon Airport during the new terminal’s January and February early opening period, while T1 shops and boutiques retained the larger 85% share


of revenue. “At first we thought the T1


sales amount would fall – there were some worries,” according to the spokesperson. “T2 has 30% of passengers and


T1 has 70% but our T1 sales only diminished 15% after T2 opened. “T1 is doing very well. Total T1 and T2 average daily sales are +20% over


Above: Fears of a plunge in DF&TR sales at T1 following the opening of T2 were swiftly allayed, with the T1 knock-on effect standing at a mere -15%.


“We are not sure of duty free sales growth this year. Maybe it will be +4% to +6%... We expect a higher growth rate than last year.”


Spokesperson, IIAC


Louis Vuitton is anchored at Incheon’s premier boutique location in the T1 main terminal. TRBUSINESS 87


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164