American Airlines Ends Inflight Duty Free

Apparently American Airlines has ceased selling onboard duty free.

Delta dropped duty free last summer. It was characterized in media as a dispute over contract details with their outsource provider, the same company I believe which American worked with (DFASS Group).

Duty free is said to be a $3 billion industry, although that strikes me as surprisingly high. Duty free purchases of high tax items like alcohol and cigarettes are popular as are jewelry and cosmetics, especially in Asia and the Middle East as well as Scandinavia flights.


    You’ll just have to buy your duty free here instead.

US airlines don’t have the same volume of duty free purchases as Asian and Middle Eastern carriers. I’ve read that Korean has a standalone duty free display for shopping throughout the flight on the A380 (I’ve only flown Korean’s 777s and 747s). And that JAL, whom I’ll be flying soon in their new first class, offers ordering via the inflight entertainment system. It’s always struck me on my Cathay Pacific flight that they were doing a meaningful business.

My first reactions to the news about American:

  • I’ll be grateful to have fewer flight attendant announcements on overnight flights.
  • I feel bad for those flight attendants that were earning a meaningful commission on sales.
  • There’s certainly going to be a tradeoff of inflight shopping purchases from the airline and from other providers via inflight internet. That’s one of the factors that troubled the SkyMall business.
  • The timing seems strange to me, if anything I’d have expected this to happen when fuel prices are high (since stocking duty free items entails weight and thus additional fuel burn). Although perhaps it ties with the end of a long-term contract with their provider.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Connecting through Seoul ICN today, don’t usually get on the one-way no return journey to the satellite terminal, much of the space is now set aside for duty free pickup being ransacked by China-boun passengers as they rip apart and discard packaging to consolidate.

    That Korean A380 stand is there, thankfully there is no obnoxious hard sell. On my overnight from Guam just now I woke to a dark biz A330 cabin with a flight attendant behind the back seat, looking out in case anyone stirred and needed something. Too bad they don’t stock Jeju Water spray on flights under 6 hours, my wife will not let me back without that offering.

  2. I never really understand duty free. Most of the time I have seen the same items sold in the city for less than the duty free places in the airport. I dont know much about cigs and alcohol. I refer more to the other items sold.

  3. Cathay Pacific offers a service where you browse their duty free catalog online and reserve items for you up coming CX flight. Then on the flight you receive the item and pay for it! That takes away the uncertainty of “Will the stock XXX on my flight, and if they do will they sell out of it before they get to me?”

  4. I think it really comes down to price. Most of Euro carriers are not duty free. Even with flying back to the US. One has to look at tax policies of that nation’s carrier. For example, Swiss International and Icelandic, have some very competitive pricing on duty-free. I have seen items that were less than 50% of the original countries’ price. As with shopping for any item, any where, one has to be an educated shopper. All the US carriers were not so great with pricing. But, that could change, if the airlines wanted it to change. For example, Air France has put discount certificates on-line. These certificates can obtain a decent discount which changes the pricing significantly.

    Obviously American and Delta felt that duty-free was not swaying the market. Everything in the airline business is constantly changing, so duty-free could reappear again.

  5. @robertw,

    For Americans, duty free is not a colossal value, except perhaps for cigarettes. But for Europeans who face significant VAT’s and tremendously amplified taxes on booze and tobacco, the proposition is far better.

  6. My observation has been that in general, Duty Free gives good value on Alcohol and Tobacco products, but generally you can find the other stuff cheaper on Amazon

  7. I suspect one of the reasons behind AA’s decision — a wise one — is that the US$ is pricing any value out of purchases for those residing outside the US. (The same holds for LHR/BA duty free, the £ being a strong currency. I couldn’t find anything that wasn’t cheaper at retail back home even adding local taxes.) In addition to the price factor, remember the inconvenience of purchasing liquor and perfume which must be repacked in check-in luggage at the point of entry into the US. Or not being able to be taken through security at an overseas airport for a connecting flight. Then there’s the volume and weight duty free alcohol in particular take up on a plane. All in all, more of a hassle than a contributor to the bottom line.

    Also, like SkyMall being uncompetitive with online retailers, inflight duty free has been surpassed by airport duty free which has exploded over the past two decades. Airports have become shopping malls and inflight can’t compete on variety or price. In the realm of liquor, whisky producers have seized on airport duty free to offer a variety of unique products not available anywhere else, so which whisky drinker want to buy a bottle of JWBlack inflight?

    There was duty free on my AA flight from HKG on Friday, wonder if it will be offered on my flight back to HKG on Wednesday?

  8. The reason behind AA and DL terminating dfass is because of dfass unethical practices, the poor customer service and the lack of commissions payment to the airline. Dfass has been losing clients lately, has a very poor variety of products and not happy with that has a big turnover of employees and treats people poorly.

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