Liquids Ban on Flights Hurts Duty-free Sales

The sales of the duty-free stores at Ben-Gurion Airport have gone down as a result of the new security rules limiting the carrying of liquids on flights from Israel to connecting destinations in Europe, TheMarker has learned.

Avi Ben-Hur, the CEO of duty-free franchisee James Richardson at Ben-Gurion, appealed in a letter to the heads of the 30 airlines operating at the airport, asking them to inform passengers of the specifics of the new rules in order to limit the financial damage as a result of the ban.

As of November 2006, the new rules ban carrying more than 100 milliliters of liquids onto flights. The new regulations have hurt mostly the sales of alcohol, perfume and cosmetics.

The drop in sales for James Richardson's duty-free stores at Ben-Gurion airport is estimated at 3-6 percent.

Ben-Hur said that the restrictions actually affect only 8-9 percent of the passengers travelling through the airport, since the rules apply only to connecting flights through Europe.

However, many travelers leaving Ben-Gurion are not aware of the specifics of the ban, and simply avoid the duty-free stores completely - even when they are leaving Israel on direct flights which allow liquids.

James Richardson has posted signs in the stores explaining the new rules to passengers, but according to Ben-Hur, the airlines must inform their passengers of the new regulations.

The company is now preparing for a record number of passengers at the airport around the Passover holiday season, with about half a million travelers expected during the period.

James Richardson's sales grew 10 percent in 2006 to $270 million, and are expected to reach $300 million this year.