Citing Vendor Dispute, American Quietly Ceases Duty-Free Sales on International Flights

Citing a dispute with its vendor, American Airlines will no longer sell duty-free merchandise on international flights.

On March 20, American Airlines ended its program that allowed passengers to purchase tax-free items including cigarettes, spirits and fashion accessories from their seats on select international trips. In a statement, the airline said the decision to stop offering duty-free goods inflight came as a result of “a contractual disagreement” with DFASS, the company that had handled American’s onboard duty-free sales.

The airline has removed duty-free catalogs from its planes, and American flight attendants will no longer hawk Marlboros and Drakkar Noir from carts packed with duty-free offerings. Examples of the duty-free selections have already been taken down from the airline’s onboard shopping webpage and replaced with a message that simply reads: “Duty-free shopping is no longer available on American flights.”

“We currently have no plans to find an alternative supplier,” American Airlines Director of Premium Services Nick Richards told FlyerTalk. “I’m not saying that a couple of years down the road, should there be a solution that has a more viable business model that makes sense at that time, we would explore it.”

According to the statement from American, the move will not affect duty-free shopping onboard flights operated by US Airways “until further notice.” Richards says that the vendor has been notified that onboard duty-free service will be phased out at US Airways within the next three months.

American is the latest U.S. airline to give up on the idea of selling duty-free products on planes. Delta Air Lines ceased duty-free sales in August 2014 following a dispute with its own duty-free vendor.

“Unfortunately, with the U.S. customer, the demand for duty-free sales has certainly declined,” Richards explained, noting that carriers based in other parts of world have had better luck with inflight duty-free merchandise. “We have the Costcos and the Amazons of the world where you can buy these products at discounted rates and that has contributed to the decline.”

Richards pointed out that adding that lead time of up to a year required to make duty-free items available onboard flights also put the airline at a competitive disadvantage to brick-and-mortar stores in airport terminals. “With airport stores you have a lot more variety; we naturally have space constraints,” he said. “It didn’t really allow us to have the latest and greatest cosmetics and jewelry items.”

American does not believe the fact that travelers can no longer purchase giant Toblerone bars or bottles of Johnnie Walker Blue without tax on international flights will be a great inconvenience to its customers. After all, as Richards noted, “There’s duty-free shopping available at most, if not all, of the international gateways that we fly to and from.”

[Photo: American Airlines]