The implications of sustainable development for airport duty-free business models

Abstract

This paper considers how the challenges underpinning sustainable development are likely to impact on duty- and tax-free retailing in airports and, by implication, in the entire aviation industry. The paper defines the role of retail as a vital source of airport revenues, before considering the carbon consequences of the sector’s incumbent business models. It finds that products taken onto aircraft increase aircraft weight and fuel burn and are a primary source of carbon emissions for duty-free retailers. The implications for the sector are discussed, and the potential for implementing more sustainable business models is presented. Here it is identified that the specific logistical, economic, and political constraints of operating in the airport make alternative business models difficult, if not impossible to implement. The specialisations that have helped this sector to flourish are constraining their ability to adapt to the climate challenge.