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Europe / Global / General
Eyjafjallajokull halted European recovery
By Generation Research, 6 July 2010
Some three months ago eruptions from the Icelandic volcano Eyjafjallajokull demonstrated that aviation is not only vital to the global economy, but also to the health and well-being of global DF&TR trade.
Four months into 2010 European airport duty free and travel retail sales are no more than on par (-0.4%) with the results achieved during the same period in 2009, according to the ETRC Index measuring developments based on the Euro currency.
"Indeed, up until the end of March the European recovery in airport duty free and travel retail sales was well on hand with a +6.0% growth on the first quarter in 2009", says Yngve Bia, President Generation Research. "But the eruption of the Icelandic volcano on 14 April changed all that".
April resulted in the unprecedented total or partial closure of up to 80% of Europe's airspace for six days between 14 – 21 April causing a very significant -13.5% decrease in air traffic at European airports.
Olivier Jankovec, Director General ACI Europe commented at the time: "The volcanic ash crisis has abruptly and completely undone recovery gains achieved in passenger traffic since last December. This is an extremely severe shock to our recovery."
In April, European DF&TR airport sales fell -14.2% compared to April 2009, an amount equal to a loss in sales of € 81.7 million, according to Generation Research.
Bia says: "In April 2009, total European airport DF&TR sales reached € 576.1 million, in April 2010 sales amounted to € 494.3 million equal to a -14.2% decline. Interestingly, had the pace in sales growth recorded in 1Q 2010 been allowed to continue in April, total sales would have reached € 619.3 million. In this case the loss comes to € 124.9 million equal to -21.7%".
In a bigger perspective the sales loss to European DF&TR traders – airport authorities, retailers and suppliers alike – may seem small or even insignificant. This a statement that the traders affected would however most certainly not agree to. There have been talks that even these parties, similar to the airlines and airports, should be compensated by state funds for the possibly unwarranted or unjustified total closure of the airports as was the case in parts of April.
Eyjafjallajokull's eruption, causing the largest breakdown in European civil aviation since World War II over the course of one week, gave not only the DF&TR sector a difficult time but impacted on several other important sectors as well.
At the 10th annual global summit of the World Travel & Tourism Council held in Beijing, China on 25 – 27 May 2010, the head of Oxford Economics, Mr Adrian Cooper, summarized the economic and other consequences of the Icelandic volcano eruption. He said that over 100,000 flights were cancelled between 14 and 21 April 2010, affecting more than seven million passengers. He claimed that the impact on the global GDP for the entire week of flight disruption totaled US$4.7 billion, with Europe bearing much of the brunt, followed by the Americas, then Africa & Middle East and Asia, respectively.
Since the massive airspace shutdown in the first week, another 5,000 flights were sporadically cancelled in the weeks ahead. "This would add an additional 5% to the first week impacts on the basis of cancelled flights. So the total cost now is US$5 billion lost GDP", said Cooper.
In this wider perspective, the loss equal to US$ 109.9 million (€ 81.7 million) to European airport retailers in terms of sales would represent 2.2% of the total damages and financial losses caused by the Icelandic volcano.
The damages were not, however, confined to Europe only as many airports and airlines in the US, Middle East and Asia Pacific were affected as well.
In a statement, Dubai International Airport management said: "Timely communication and airline re-routing minimized the impact to just over 500 flight cancellations, stranding some 6,000 passengers, the large majority of whom were comfortably accommodated in hotels around the city. Following the disruptions, 46 additional flights were operated to transport-stranded passengers and cargo to their final destinations and effectively clearing the backlog in the shortest possible time.
"Similarly, London was ousted by Doha, albeit temporarily, from its position as the top destination in terms of traffic, as passenger numbers between Dubai and the UK capital plummeted 20% due to flight cancellations."
It is believed that the turmoil in European airspace in April did benefit the ferry sector offering short-haul travels.
Magnus Skjörshammer, Purchasing Director AS Tallink Silja Duty Free, comments: "Yes, we did see an increase in April of passenger numbers, most probably due to the volcanic ash-cloud that entered EU airspace. However, as much as we would have liked to, we did not see a dramatic sales increase. This is most probably due to the fact that the extra passengers were using our vessels as means of transportation, and not for leisure/shopping.
"After feedback from our onboard staff, we do find that our many 'new' passengers were surprised to see what fantastic shopping possibilities we have onboard. We believe that this will definitely help increase both passenger numbers as well as sales figures in the future. Hopefully this will be reflected in the next annual statistics we will send you.
"Similarly we believe that the recent financial situation has led to many new passengers, previously unknown to the cruise/ferry travel. Our wish is that as when the situation stabilizes, and when they eventually return to air travel, they will remember our vessels as a comfortable means of travel, with the added benefits of shopping."
The chart above shows clearly how the encouraging growth rates (based on the Euro) at European airports for the categories recorded in the January + February period came to a halt in the following March + April period due to the April volcano ash incident.
For the entire January to April four-month period, results in 2010 as compared to the same period in 2009 show that the category Clothes & Accessories has performed the best at +4.1% followed by "Other Luxury Goods" at +4.0%. Liquor sales have advanced +2.0% and sales of Watches & Jewellery are up +1.8%. Beauty sales are just about at the same (+0.1%) level as in 2009. Tobacco continues to struggle at -6.9%. Confectionery sales are somewhat surprisingly down -1.7% four months into 2010.
The statistical contents in this feature are only as up-to-date as their availability and compilation allowed at the time of publishing. All statistical numbers shown here are subject to review and revision in subsequent features and charts as additional source material becomes available.
By Generation Research, 6 July 2010
Some three months ago eruptions from the Icelandic volcano Eyjafjallajokull demonstrated that aviation is not only vital to the global economy, but also to the health and well-being of global DF&TR trade.
Four months into 2010 European airport duty free and travel retail sales are no more than on par (-0.4%) with the results achieved during the same period in 2009, according to the ETRC Index measuring developments based on the Euro currency.
"Indeed, up until the end of March the European recovery in airport duty free and travel retail sales was well on hand with a +6.0% growth on the first quarter in 2009", says Yngve Bia, President Generation Research. "But the eruption of the Icelandic volcano on 14 April changed all that".
April resulted in the unprecedented total or partial closure of up to 80% of Europe's airspace for six days between 14 – 21 April causing a very significant -13.5% decrease in air traffic at European airports.
Olivier Jankovec, Director General ACI Europe commented at the time: "The volcanic ash crisis has abruptly and completely undone recovery gains achieved in passenger traffic since last December. This is an extremely severe shock to our recovery."
In April, European DF&TR airport sales fell -14.2% compared to April 2009, an amount equal to a loss in sales of € 81.7 million, according to Generation Research.
Bia says: "In April 2009, total European airport DF&TR sales reached € 576.1 million, in April 2010 sales amounted to € 494.3 million equal to a -14.2% decline. Interestingly, had the pace in sales growth recorded in 1Q 2010 been allowed to continue in April, total sales would have reached € 619.3 million. In this case the loss comes to € 124.9 million equal to -21.7%".
In a bigger perspective the sales loss to European DF&TR traders – airport authorities, retailers and suppliers alike – may seem small or even insignificant. This a statement that the traders affected would however most certainly not agree to. There have been talks that even these parties, similar to the airlines and airports, should be compensated by state funds for the possibly unwarranted or unjustified total closure of the airports as was the case in parts of April.
Eyjafjallajokull's eruption, causing the largest breakdown in European civil aviation since World War II over the course of one week, gave not only the DF&TR sector a difficult time but impacted on several other important sectors as well.
At the 10th annual global summit of the World Travel & Tourism Council held in Beijing, China on 25 – 27 May 2010, the head of Oxford Economics, Mr Adrian Cooper, summarized the economic and other consequences of the Icelandic volcano eruption. He said that over 100,000 flights were cancelled between 14 and 21 April 2010, affecting more than seven million passengers. He claimed that the impact on the global GDP for the entire week of flight disruption totaled US$4.7 billion, with Europe bearing much of the brunt, followed by the Americas, then Africa & Middle East and Asia, respectively.
Since the massive airspace shutdown in the first week, another 5,000 flights were sporadically cancelled in the weeks ahead. "This would add an additional 5% to the first week impacts on the basis of cancelled flights. So the total cost now is US$5 billion lost GDP", said Cooper.
In this wider perspective, the loss equal to US$ 109.9 million (€ 81.7 million) to European airport retailers in terms of sales would represent 2.2% of the total damages and financial losses caused by the Icelandic volcano.
The damages were not, however, confined to Europe only as many airports and airlines in the US, Middle East and Asia Pacific were affected as well.
In a statement, Dubai International Airport management said: "Timely communication and airline re-routing minimized the impact to just over 500 flight cancellations, stranding some 6,000 passengers, the large majority of whom were comfortably accommodated in hotels around the city. Following the disruptions, 46 additional flights were operated to transport-stranded passengers and cargo to their final destinations and effectively clearing the backlog in the shortest possible time.
"Similarly, London was ousted by Doha, albeit temporarily, from its position as the top destination in terms of traffic, as passenger numbers between Dubai and the UK capital plummeted 20% due to flight cancellations."
It is believed that the turmoil in European airspace in April did benefit the ferry sector offering short-haul travels.
Magnus Skjörshammer, Purchasing Director AS Tallink Silja Duty Free, comments: "Yes, we did see an increase in April of passenger numbers, most probably due to the volcanic ash-cloud that entered EU airspace. However, as much as we would have liked to, we did not see a dramatic sales increase. This is most probably due to the fact that the extra passengers were using our vessels as means of transportation, and not for leisure/shopping.
"After feedback from our onboard staff, we do find that our many 'new' passengers were surprised to see what fantastic shopping possibilities we have onboard. We believe that this will definitely help increase both passenger numbers as well as sales figures in the future. Hopefully this will be reflected in the next annual statistics we will send you.
"Similarly we believe that the recent financial situation has led to many new passengers, previously unknown to the cruise/ferry travel. Our wish is that as when the situation stabilizes, and when they eventually return to air travel, they will remember our vessels as a comfortable means of travel, with the added benefits of shopping."
The chart above shows clearly how the encouraging growth rates (based on the Euro) at European airports for the categories recorded in the January + February period came to a halt in the following March + April period due to the April volcano ash incident.
For the entire January to April four-month period, results in 2010 as compared to the same period in 2009 show that the category Clothes & Accessories has performed the best at +4.1% followed by "Other Luxury Goods" at +4.0%. Liquor sales have advanced +2.0% and sales of Watches & Jewellery are up +1.8%. Beauty sales are just about at the same (+0.1%) level as in 2009. Tobacco continues to struggle at -6.9%. Confectionery sales are somewhat surprisingly down -1.7% four months into 2010.
The statistical contents in this feature are only as up-to-date as their availability and compilation allowed at the time of publishing. All statistical numbers shown here are subject to review and revision in subsequent features and charts as additional source material becomes available.
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OLDER NEWS IN THIS REGION
• Competition for high spends grows
(6 July 2010)
• Russian liquor allowance up (3 July 2010)
• WDF opens smart new Edinburgh store (3 July 2010)
• 'Heinemann Duty Free' reopens at Salzburg (1 July 2010)
• Speakers for ARC 2010 (29 June 2010)
• Swatch company founder Nicolas Hayek dies (29 June 2010)
• Grolsch and BA partner at T5 (28 June 2010)
• Lancôme launches new duo (28 June 2010)
• Travalo listed with Nuance and KievRianta (28 June 2010)
• EYE gains two new London recruits (28 June 2010)
• Russian liquor allowance up (3 July 2010)
• WDF opens smart new Edinburgh store (3 July 2010)
• 'Heinemann Duty Free' reopens at Salzburg (1 July 2010)
• Speakers for ARC 2010 (29 June 2010)
• Swatch company founder Nicolas Hayek dies (29 June 2010)
• Grolsch and BA partner at T5 (28 June 2010)
• Lancôme launches new duo (28 June 2010)
• Travalo listed with Nuance and KievRianta (28 June 2010)
• EYE gains two new London recruits (28 June 2010)
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