Why do airlines sell duty free?

Seeing how successful duty-free shops in airports were, airlines saw the concept of offering duty-free shopping to make extra revenue. In between meals, the cabin crew would announce that they were coming through the cabin with a selection of duty-free items for sale while touting one item or another.

Do airlines make money from cargo?

Airlines don’t make money just from flying passengers: air cargo is a big business. The value of goods carried by airlines is expected to exceed $6.2 trillion in 2018, representing more than 35\% of global trade by value, according to the International Air Transport Association (IATA).

How can I increase my inflight sales?

How to maximise in-flight sales and revenue

1. Types of airline ancillary revenue.
2. Crew product awareness.
3. Passenger awareness (before and during flight)
4. Product Visibility.
5. Magasine images.
6. Tailor products by route, passenger profile or time of day.
7. Compare price points with competitors.
8. Offer meal deals.

What is more profitable to the airlines transporting passengers or cargo?

Though that may not seem a lot, once a flight covers its costs with passenger capacity, any income from cargo goes to profits. Unlike more fare-sensitive passengers, cargo customers will pay a premium for the expedited and flexible point-to-point service afforded by an airline’s network.

Why are airline profit margins low?

Airlines provide a vital service, but factors including the continuing existence of loss-making carriers, bloated cost structure, vulnerability to exogenous events and a reputation for poor service combine to present a huge impediment to profitability.

How profitable are inflight duty-free sales?

The short answer is that for some airlines at least, inflight duty-free sales are big money spinners. In 2015, GuestLogix, which at the time was processing on-board duty-free sales, put the annual figure for on-board duty-free sales in excess of US$3 billion.

How much do Airlines make from alcohol sales on domestic flights?

According to a Metro write-up on airline surveys, alcohol sales on US domestic flights alone can generate upwards of US$40 million (roughly £30 million) in just four months. Those numbers were found in 2014, and again apply only to US flights, but they provide a fairly clear picture of just how lucrative on-board alcohol sales can be.

How popular are on-board duty-free sales?

In 2015, GuestLogix, which at the time was processing on-board duty-free sales, put the annual figure for on-board duty-free sales in excess of US$3 billion. According to GuestLogix, skincare products, makeup and perfumes were the most popular items, followed by jewellery, watches, alcohol and cigarettes.

What is the future of inflight shopping on airlines?

Many of the airlines still dedicated to the cause of inflight shopping are moving to make it a more streamlined, personalised experience. Some are transitioning from the old style seat back shopping catalogues in favour of shopping over the inflight entertainment system.