Finnair Launches 40% Discount Before Ending Duty-Free Sales
Finnish airline Finnair will drop both in-flight and pre-order retail sales of perfumes, cosmetics, gifts and other retail products in two stages in the spring to focus solely on selling food and beverages onboard. The carrier described its retail offer as “less important” to customers.
Carts coming up the aisles with duty-free and travel retail products like accessories from Marimekko or Kiehl’s skincare will disappear on all flights on February 28, while pre-ordered items will continue to be delivered to flights until April 18.
To move the last remaining stock, a discount campaign with 40% off everything was launched on February 1, for customers traveling with the airline. It applied to items bought onboard, or pre-ordered for flights with a duration of more than two hours.
In-flight shopping is currently available on all long-haul flights, and flights to the Canary Islands, Dubai, Egypt, Iceland, Israel, Switzerland, Turkey and the U.K. Loyalty members of the Finnair Plus scheme are also able to opt for home delivery.
Passengers, which numbered just over nine million in 2022, can continue pre-ordering meals and buying snacks and beverages on board as usual, said the Oneworld member, whose alliance partners includes American Airlines, British Airways and Qatar Airways.
“A less important service”
Finnair’s head of product Valtteri Helve said in a statement: “Onboard and pre-order shopping has become a less important service among our customers. We had already discontinued in-flight sales on our flights within the European Union as part of our goal to reduce the overall weight of the aircraft. Now it is time to take the next step.”
A duty-free industry observer told me: “Several other airlines have discontinued in-flight sales—KLM did it before Covid—while others have found ways to partner with digital offers and airports. At the end of the day it is a commercial decision.” Some U.S. airlines ended their retail services onboard even earlier, including American Airlines and Delta.
Finnair’s decision comes just as traffic from China is set to rise again after the PRC government reopened its borders ahead of Chinese New Year, allowing high-spending Chinese to travel again. The airline has bumped up flights between its Helsinki hub and some Asian destinations for summer 2023. They include Osaka and Tokyo’s Narita Airport in Japan, plus Hong Kong and Delhi, India.
Russian detours hit profits
Finnair used to boast the fastest flight time into Europe from Asia, but the war in Ukraine led to long detours around closed Russian airspace which have put the airline at a distinct disadvantage. Last year, Finnair’s CEO Topi Manner said: “The closed Russian airspace will significantly affect Finnair’s ability to make a profit in the long term.”
The Helsinki-listed company has seen its share price fall from a pre-pandemic peak of €2.34 in December 2017 to €0.54 on Thursday. Profitability is a key concern for airline and trimming the fat and cutting non-essential services is one way forward. In mid-January the company approved a staff incentive plan running until 2025 to reduce the carrier’s unit costs through long-term savings agreements. There will be a cash payout in the first quarter of 2026 if Finnair achieves the EBIT margin target set out in the plan.
Elsewhere the company is seeking to develop a geographically more balanced network including new flights to India, an optimized fleet, and stronger partnerships such as its cooperation with Qatar Airways to commence flights from three Nordic capitals to Doha.