SOUTH KOREA. Lotte Duty Free has been awarded the inflight retail contract for low-cost airline Jeju Air, with a seven-year agreement set to begin on 1 December. The annual sales target is KRW16 billion (US$11.1 million), said the retailer.
Lotte Duty Free said it planned to expand its inflight expertise to markets worldwide, with its experience onboard low-cost carrier Jeju Air as a springboard. It will target business onboard full-service carriers in future, it added.
Lotte Duty Free said that its sourcing capabilities as the world’s second largest travel retailer (in The Moodie Davitt Top Travel Retailer rankings) would help it expand the offer onboard Jeju Air. Focus categories will include cosmetics, cigarettes, accessories and health food products. Lotte Duty Free said it would also strength the range of wines and whiskies and add exclusive offers such as limited-edition whiskies.
Jeju Air is Korea’s leading low-cost airline, with a fleet of 38 aircraft. It served 6.5 million passengers in 2021. It serves domestic routes as well as overseas destinations including Japan, Southeast Asia, Guam, Saipan, Singapore and the USA. It plans to introduce a further 40 aircraft in the next five years.
Lotte Duty Free previously managed the inflight business at Jeju Air after acquiring AK Duty Free in 2010, which at the time held the airline concession. That contract ended in 2016, Lotte Duty Free confirmed to The Moodie Davitt Report.
Lotte Duty Free CEO Kap Lee said: “At a time when domestic and overseas travel is on the rise in earnest, we have acquired Jeju Air’s inflight duty free shop business. We will continue to work hard to pioneer the market.”
Following the opening of its downtown store in Sydney in April, the company said it is accelerating its global business expansion. As reported, it will open soon in Da Nang, Vietnam with a further store to come in Hanoi in 2023, plus further openings under its liquor & tobacco licence at Singapore Changi Airport. Lotte Duty Free said these would further strengthen what it called the ‘LDF Belt’ (Lotte Duty Free Belt) in Asia Pacific.
It noted that travel was bouncing back fast, both at home and abroad. Citing figures from the Ministry of Land, Infrastructure and Transport, the company said that the number of international passengers in Korea in July and August this year surged by +526% compared to the same period last year. In addition, said Lotte Duty Free, the outbound tourism market is gaining momentum, with airlines preparing to increase flights, particularly with visa-free entry to Japan set to begin on 11 October.
