It was six years ago, as fuel prices were spiking and airline losses were exploding, that I pondered the future of in-flight duty-free sales. Nothing really changed from that point, until now. On incredibly short notice the end has come to Delta duty free sales. The carrier cited a disagreement with vendor DFASS as the basis for the move. And, perhaps even more interestingly, Delta has no intentions at this time of finding a replacement vendor according to the Runway Girl story breaking the news. So, what’s the deal?
<unabashed speculation>
In addition to carrying the couple hundred pounds of goods all over the world (and, of course, they’re carrying them on the longest flights where the fuel burn impact is the most significant) there is significant overhead in managing a duty-free sales service. The inventory must be kept in bonded facilities and the demand from the US market, where taxes/duties are generally low anyways on most of the good sold in flight, is pretty low. Plus there’s the part where just about every major international airport is a mega-mall which just happens to have airplane gates attached. Even Delta admits as much, telling their flight attendants to advise passengers that “a wide variety of Duty Free Shopping [sic] is available in most international airports.”
There’s also the part where more airports are offering passengers the opportunity to purchase duty free items on arrival or even buy it at departure and have it waiting to collect when they return. Passengers have more choices than ever, and the ground-based shops can offer better prices and greater variety. The deck is stacked against the airlines and their operating partners.
So it costs them a lot to carry the goods around. It costs them a lot to comply with the various regulations regarding the tax compliance. And they had a falling out with their vendor; if I had to guess I’d say it was about the margins/costs on the operation. So the airline decided to walk away. The reference in the statement to flight attendants about “legal considerations in this business decision” have me more than convinced that it was all about the money.
And if you’re not making money doing it, why bother?
On the plus side, those soon-to-be empty carts can now be swapped out for expanded in-flight catering or other things passengers might want. Definitely hard to complain about that potential.
</unabashed speculation>
Also worth noting, while it seems likely that most passengers will be happy to not be interrupted by the announcements and the flight attendants are likely to be happy to no longer have the task of playing sales associate on board, other airlines are taking a different tack. Biman just reintroduced their in-flight duty-free after a few years’ hiatus. And the FAs earn a commission on their sales, similar to the in-flight CC shilling on some US-based carriers.
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Wow, wish that had happened when I was still flying…. it was the thing I hated most to get stuck with as a flight attendant, (and this was before we only took credit cards)!
I totally agree with all your statements. But, the airline business is very competitive and in a couple years Delta will review this decision. It wouldn’t surprise me if duty free sales come back.
A few airlines do the duty free cart very well. Both as a profit center for them and some bargains for passengers. Swiss International has at times, very good pricing on many items. Some items not Swiss made, are also well priced, as Switzerland isn’t in the Eurozone. Shoppers are way more educated than ever before. So, if the pricing isn’t at least 10% better than the airport duty free shops, that cart will not do many sales. For Delta, US passengers see the prices on the outbound flight, they know what prices to expect on the return flight and shop accordingly at their destination. Duty Free, even at the airport isn’t priced very advantageously, anymore either.
Perhaps the empty space can be used for other on board sale products such as mid-flight snacks etc. revenue opportunity is revenue opportunity.
Great for me as a passenger and if I were a flight attendant I would love dumping this hassle if the commissions are as low as reported. The Delta flyers I most regularly see purchasing duty-free are very high maintenance with limited English and lots of demands to inspect products that often balloons into a prolonged disturbance with multiple flight attendants assisting and multiple passengers debating the purchases. Delta, well NWA, always made a big deal out of Japan home delivery, so I wonder if their Japan business was strong, but then again, Delta management seems to have been determined since the merger and failed woo-ing of JAL to abandon NWA’s once great Japan business.
I will never fly delta from JFK again, can’t believe no duty free cigarette , why, you can not be serious , never ever ever again
Ann Quinn