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Louis Vuitton and other T5 boutiques helped drive a double-digit surge in luxury store income |
UK. Heathrow Airport today reported healthy rises in retail income and net retail income per passenger for Q1 2015.
In the three months ended 31 March, Heathrow’s retail income increased by +6.4% to £116 million. Net retail income (NRI) grew +7.8% to £111 million and the key figure of NRI per passenger rose +5.6% to £6.78.
Growth in airside specialist shops was robust at +4.8% year-on-year, with double-digit growth in luxury store income. This followed the opening before Christmas of the redeveloped luxury retail stores in Terminal 5, with brands including Louis Vuitton, Cartier, Rolex, Fortnum and Mason and Bottega Veneta. In addition, the world-first Personal Shopper Lounge in Terminal 2 is helping to drive additional income, said the airport company.
Income from duty and tax free stores was flat in the period, with growth moderated in part by an extensive refurbishment in Terminal 5. Food & beverage (catering) climbed by +11.1%, while a +37.5% leap in income from foreign exchange “reflects the bounce back from the transition between suppliers which adversely impacted revenue in the first quarter of 2014,” according to Heathrow.
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Car parking revenue growth (+8.7%) reflected increased capacity, including the Terminal 2 multi-storey car park and the new 800-space Terminal 5 Business car park opened in February 2015. In addition, noted Heathrow, continued yield management and a broader product offering have contributed to the growth.
Overall, Heathrow’s revenue increased +8.0% to £622 million in the quarter, with Adjusted EBITDA up +7.2% to £342 million.
Heathrow’s traffic increased +2.0% to 16.4 million passengers in Q1. This reflects the shift in the timing of Easter and increased seat capacity as well as the maturing of new destinations and frequencies started during 2014.
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Intercontinental traffic rose +2.6%, with North America benefiting from new destinations and increased frequencies on existing routes announced last year, resulting in a rise of +4.4%. Traffic on routes serving the Middle East grew by +5.6% reflecting increased flights and larger aircraft.
Asia Pacific traffic decreased by -0.6% partly reflecting reduced overall capacity. Latin American traffic grew +12.6% reflecting Avianca’s new route to Colombia; increased frequencies to Mexico and traffic growth in Brazil. Most recently, Vietnam Airlines has moved its entire London operations from Gatwick airport to Heathrow, following Air China which made the switch last year.
European traffic was up +1.0% largely reflecting increased seat capacity by British Airways. Domestic traffic delivered an increase of +3.9%.
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