Luxair concessionaire rides through turbulence

Emily Pacey

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Luxair introduces cost-cutting measures but inflight concessionaire Flying Shopping Services announces strong sales

Last year Luxair registered a loss of €12m ($14.5m) but predicts that by changing strategy it will become profitable again by 2008. The airline said that if it did not take any measures "the accumulation of losses would not only jeopardise the airline's activity but Luxair SA as an entire company". The new measures will focus on scheduled services, leaving inflight duty-free concessionaire Flying Shopping Services unaffected by the new measures since it operates only on Luxair Boeing 737 charter flights.

Belgian retailer Flying Shopping Services managing director Daniel Gutelman told RavenFox.com: "No changes will be made to our service as a result of Luxair's repositioning, nor will their measures decrease our sales figures."

Gutelman went on to describe his company's success in the tobacco segment, both on board Luxair flights and in its other concessions on board Thomas Cook Airlines, TNT Airlines, and Dutch airline Arkefly. Last year tobacco sales for the retailer doubled, a result that Gutelman claimed Philip Morris central Europe sales representatives told him was unique in that region. "Philip Morris said that we are the only inflight retailer to show an increase in tobacco sales in central Europe," he said. "Our tobacco prices are very low, so customers make a good saving compared to the local market. Also, we motivate our crew with good sales commissions. Charter cabin crew are much more motivated than they are on scheduled airlines."

The retailer expects tobacco sales to double again in 2006 thanks to Luxair's decision to increase trolley space for tobacco on board its flights. Flying Shopping Services forecasts that this will boost its total sales growth for 2006 by 10%.