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RUSSIA. Runway Duty Free is achieving huge increases in year-on-year sales at Moscow Vnukovo Airport, as the location continues to challenge rival international airports Domodedovo and Sheremetyevo for market share.
In the first half of 2006 Vnukovo welcomed 2.7 million passengers, an impressive +28% increase compared to a year earlier, with international traffic surging +33% to 1 million.
Runway Duty Free, managed by Rex Trading, a venture including Aer Rianta International (ARI) and long-time ARI partner Eugene Vasiliev, has posted +96% growth in the same period. Penetration has increased to over 21% from 15.7%.
Vasiliev told The Moodie Report: “We have a core base of Russians who are travelling on charter holidays and are willing to spend, mostly on liquor (around 40% of sales) or fragrances and cosmetics (55%). Plus there are regular regional flights to Azerbaijan and Armenia. At over €56 per average transaction, we’re well up on last year so far in 2007.”
Runway Duty Free operates one main 540sq m duty free outlet under a ten-year contract. In February this year it also opened a 75sq m boutique offering concepts such as Swarovski, Watch & See (Niclas), Frey Wille and ST Dupont accessories.
The business could be even stronger, said Vasiliev, but construction work at the airport has restricted the warehouse space for Runway Duty Free to just 115sq m. “For the size of the shop and the business we generate, it’s unique,” said Vasiliev. “We’re very restricted on how much stock we can hold, particularly in liquor. But the problem should ease by year-end and liquor sales will improve. It will also mean we can run many more promotions on liquor, which we haven’t been able to do lately.”
In 2003 the city council of Moscow took a controlling 60.3% stake in the airport from the federal government. Under new ownership, the airport put in place a Strategic Development Programme designed to develop capacity and services to 2015.
This includes the construction of a new 173,000sq m terminal to handle international flights, the development of a hotel and the further upgrading of road and rail connections to the city. The programme is already benefiting the airport. In 2004 Vnukovo handled 9% of Moscow’s air traffic; by 2006 that figure had risen to 15.4%.
A full report on Moscow Vnukovo and Runway Duty Free’s activities there will appear in the BRIC issue of The Moodie Report Print, out next month.
MORE STORIES ON RUNWAY DUTY FREE IN MOSCOW
Chanel pops up with Runway Duty Free at Moscow Domodedovo Airport – 25/07/07
