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Record passenger traffic in UK airports could signal growing opportunity for wine and spirit brands

Published:  14 April, 2015

Three major airports across the UK hit record breaking traffic numbers last month, according to the most recent Moodie's Report figures, signalling the opportunity for wine and spirit brands in the travel retail channel could not be stronger.

Three major airports across the UK hit record breaking traffic numbers last month, according to the most recent Moodie's Report figures, signalling the opportunity for wine and spirit brands in the travel retail channel could not be stronger.

Last month, prior to World Duty Free Group merging with Dufry, revenues for the year soared 15.8% to hit over €4,406.6m in 2014. The UK revenue for the company alone reached €1,057.8m, which is an increase of 8.4% over its full year 2013 results.

Despite the rise in passenger numbers the strengthening Great British pound is starting to slow growth particularly for London's most international airport. "Heathrow has been the most difficult airport to trade at in the UK, with sales down -2.4% versus last year," said Eugenio Andrades, the chief executive officer of World Duty Free Group, on an investor call last month when announcing the group's results.

The UK accounts for 44% of the WDFG's net revenue in 2014.

Depite the currency challenges, the increase in traffic could spell a larger opportunity for those brands that invested in the channel.

Treasury Wine Estates last year announced it was looking to double its travel business within five years, which appeared to be the right time to invest in the channel. Last year, TWE said it saw a £1 billion opportunity in the travel retail sector.

Gatwick airport handled 2.96m passengers in March 2015 a 9.2% increase over 2014 and its 25th consecutive month of growth in passenger numbers. It was also the busiest March on record since it re-opened as a new alternative London airport on its current site in 1958.

Equally London Heathrow also posted its busiest March ever with 3.4% more passengers moving through the UK's largest airport, hitting a record 5.95 million travellers last month.

Manchester Airport also reported record passenger traffic in its 2014/2015 financial year seeing an increase of 7.5%. Manchester Airport handled 22.32 million passengers last year, setting a new record in the airport's 77 -year history.