Skift Take

Perhaps it's fitting that United is dropping its duty free program in the same year it is retiring its Boeing 747s. Both harken back to a different time in aviation.

In a bid to spur more duty free sales last year, United Airlines created a program that allowed non-traveling customers to surprise family or friends on international flights by sending them gifts delivered by a flight attendant. United recommended consumers use the service to say, “congratulations,” “happy birthday,” or “I love you,” and promised to deliver gifts in a special bag with a personalized card.

It was an intriguing idea —United even got some media buzz from it — but it was not enough to save the airline’s duty free program.

United, which has been working with a company called Duty Free World, said this week it will stop boarding duty free items on March 31. It will be the last of the three major U.S. airline to close its shop, following Delta Air Lines, which folded its operation in 2014, and American Airlines, which shut its down in 2015. Other North American airlines, including Hawaiian Air and Air Canada, continue to sell duty free items. 

Duty free still serves a purpose, mainly for airlines that invest heavily in promoting and marketing the service. Korean Air has a duty free shop in the rear of its Airbus A380 economy class section that’s so big it kept the airline from installing as many seats on the aircraft as normal.

Still, many airlines report sales have slowed as airports have invested billions of dollars into improving the retail experience. It’s a trend that started outside of the United States — Singapore Changi Airport has Prada, Gucci, Hermes and Salvatore Ferragamo — but is catching on at U.S. airports. The new international terminal in Los Angeles includes Gucci, Burberry and Hermes, along with stores like DFS Galleria that sell many different brands of duty free luxury goods.

Ultimately, United decided it could not match the other retailers.

“We made this decision based on declining sales revenue for both United and Duty Free World,” United said in a message to employees. “We are unable to compete with airport duty-free vendors that stock much more merchandise.”

United will stock duty free catalogues in seatbacks through June, so travelers will be able to buy items for home delivery for a few more months. But the duty free carts will disappear in a couple of weeks.

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Tags: duty-free, united airlines

Photo credit: The new Tom Bradley International Terminal in Los Angeles features many high-end retailers. As more stores in airports have opened, some airlines are struggling with duty free sales. jshyun / Flickr

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