EUROPE: ACI ICELAND
“Duty Free Iceland is by far the most important business for Isavia.”
Gunnhildur Erla Vilbergsdóttir, Commercial Manager, Isavia
been owned by the government since the opening of Keflavík Airport,” says Vilbergsdóttir. “We are constantly evaluating whether that is the optimal model or if other companies should be involved. “No decisions have been made
and exploring the market, so open for discussions for those interested.” Currently, Keflavík’s duty free
business trades as Duty Free Iceland, which is a subsidiary of Isavia. “Duty Free Iceland is by far the
most important business for Isavia,” states Vilbergsdóttir. “With the enormous passenger
growth from various markets, the challenge has been in adapting to the new customer with both products and services. “The local market in Iceland has
always been extremely strong in duty free, both in the departure store and not least in the arrivals, since liquor and tobacco is highly taxed in Iceland and liquor is only sold in government-owned stores. “In addition to large departure
and arrival Iceland Duty Free stores, two Iceland duty free stores are also operated in different parts of the terminal for transfer passengers to Schengen and non-Schengen countries.” For the traveller, there are
particular advantages in shopping at Keflavík Airport as all retail – including speciality and food & beverage – is classed as tax free and duty free, providing real price advantages. “The duty free stores have always
about changing the current model but with the steep growth in recent years from different markets and future expansion ahead we are seriously looking at different business models.” Lagardère Travel Retail Iceland
won a major food & beverages contract at the departure lounge in 2014 when LS Travel Retail (as it was known at the time) joined forces with Icelandic operator NQ in a joint venture.
One foot in the door? The travel retailer operates eight units in the terminal; seven restaurants and a gourmet food outlet. “We expect to expand outside
the airport in the coming months and years,” comments Sigurður Skagfjörð, CEO, Lagardère Travel Retail Iceland. “Here we are mainly looking at
F&B and travel-related operations. Also, we will participate in the expansion of the airport.” Asked whether Lagardère Travel
Retail would entertain a bid for the duty free concessions at Keflavík should they become available in the future, Skagfjörð responds: “The duty free at the airport has a long history and belongs to the airport operator Isavia, which is 100% owned by the Icelandic government.
If and when this will change and how it will change is not certain. “Lagardére Travel Retail, one of the
largest travel retailers in the world and the only one which operates all three segments: duty free, travel essentials and food, is pursuing all opportunities in Iceland and if duty free becomes available we think that could become an interesting opportunity. “
Iceland traffic +15% in H1 For now, attentions focus on the airport’s nascent passenger traffic potential – particularly in the transfer segment. “The airport, which has been
growing faster than most rivals in Europe, is the centre of traffic to and from Iceland and a hub for the business to and from USA and Europe,” says Skagfjörð. “Transit passengers now account
for half of the 10 million passengers in the airport.” He adds that since transfer hub
traffic is growing faster than that of conventional departures and arrivals, some refer to Keflavík as the ‘Dubai of the north’, with around 26 airlines flying to the country in the summer. Indeed, passenger traffic at
Europe’s airports climbed by 6.7% in the first half of this year, according to ACI Europe, with traffic growth from non-EU countries outstripping that of EU countries by 10.5% and 5.4%, respectively. Within the non-EU, traffic grew in
excess of 15% at airports in Iceland. Meanwhile, Nordic counterpart
Sweden, home to Stockolm Arlanda, recorded meagre growth of +1.5%. ACI Europe says this was due to
a combination factors including the new national aviation tax, the bankruptcy of regional airline Nextjet and lower outbound demand due to pressures on local currency. Keflavík Airport’s traffic has
grown by 80% in the past three years, according to ACI Europe, and the development story will certainly raise interest for some time into the future. «
Visitors to Iceland are attracted to its strong cultural and geographic provenance. 76 TRBUSINESS
The 28th Airport Commercial & Retail Conference & Exhibition takes place in Harpa, Reykjavik, Iceland, 18-20 March.
OCTOBER 2018
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