Giant Ash Cloud Is Costing Duty-Free Shops Millions
Here's one fallout of the Icelandic ash cloud that you might not have thought of: the duty-free market. According to a Bloomberg article the shutdown of travel across the European airspace is costing duty-free retailers an estimated 25 million euros ($34 million) a day in lost revenue. The industry has had a quiet decline over the last couple of years as travel for both business and pleasure has decreased. Generation Research estimates that sales of duty-free items sold at airport shops and on planes fell 8 percent to $22.7 billion last year and European sales accounted for almost half of that. The lack of passenger traffic from delayed flights means lost revenue for the airport shops. Even those travelers that are stranded in the airport itself aren't in a buying mood. Travelers from Asia who often spend a lot on European luxury goods have not been able to fly in.
Airspace is gradually reopening across Europe but a new ash cloud headed for the U.K. means London's airports may not be able to open as quickly. The ash could clog plane engines and so most of Europe has been under a prolonged shutdown waiting for the air to clear. It's not all bad news for some luxury retailers, the volcano may have crippled duty-free sales but travelers stranded in European cities may decide to spend a little spare time shopping in other stores in the towns.