By 1995, global turnover of duty free had reached $21 billion. Europe accounts for half the total - over $13.4 billion a year.
Duty free is more important to the UK than to any other European state - in 1995 over 25% of European Union (EU) turnover was in the UK. The UK duty free industry accounts for annual sales of $2.5 billion and employs 23,000 people.
Intra-EU duty free income accounts for 40% of pre-tax profits at UK regional airports, against a European average of 15%. Regional airports would lose $59.5 million in revenue each year as well as 900 jobs if duty free gets the chop.
Some 20% of the 90 EU markets with potential for low-cost services will not have have these by 2003 if abolition occurs.
The combined impact on employment for both charter and low-cost airlines will be the loss of nearly 4,000 jobs, says the Duty Free Confederation.
UK charter airline Britannia says passengers spend between $8 and $10 each on duty free goods on a round trip. Total gross duty and tax free revenue on intra-EU charter flights was 300 million euros ($348 million) in 1995.
Consultants SH&E estimate that charter airline package tour costs would rise by between 14 and 20 euros per person. User charges at different airports could increase by up to 69%, costing EU charter airlines an extra 200 million euros a year. Cranfield University says that airport charges would have to be increased by between 20 and 40% if airports are to finance their expansion from internal resources.
Source: Airline Business
