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Tuesday, June 29, 1999 Published at 18:16 GMT 19:16 UK

Business: Your Money

Shopping at 35,000 feet

Ray and Pauline Tunbridge set off on their last duty-free shop

With duty-free sales ending on 1 July, BBC Business Correspondent Russel Hayes accompanied a British couple to Spain, to find out why they've become so important to holidaymakers.

Scouring the duty-free shop for bargains has become a British holiday institution over the years. After all, there's not much else to do at an airport.

Ray and Pauline Tunbridge from Gillingham in Kent are typical of travellers who think a duty-free shop is an important compensation. They might be held captive in the departure lounge, but at least they can save money while they are there.

Russel Hayes reports on the end of duty-free
I joined them as they set off for Malaga, the last time they would arrive on holiday with a clanking carrier bag of duty-free goodies.

Ray and Pauline took their time as they toured the aisles of the shop at Gatwick airport, south of London.

[ image: Russel Hayes: We'll still keep spending when duty-free has gone]
Russel Hayes: We'll still keep spending when duty-free has gone
There's plenty of choice here, but then sales do make up 15% of the profits at an airport like Gatwick. At some regional airports, that figure could rise to 40%.

They came out with a bulging bag and Ray took me through his purchases. He'd bought a bottle of spirits, a bottle of Martini, some cigarettes for relatives and some cosmetics for Pauline.

The bill came to just over £50, but the Tunbridges thought it was money well spent, as they'd made a decent saving.

BAA, the world's biggest airport operator, which runs Gatwick and six other UK airports, would agree. It has considerable expertise in persuading passengers to spend. That's why it's prepared to pay the excise duty and VAT itself in future to keep people and their money coming through its doors.

[ image: An in-flight toast to their successful purchases]
An in-flight toast to their successful purchases
Once the Tunbridges were strapped into their seats, they were offered another chance to snap up some duty-free goods. The airlines too make a reasonable chunk of their profits from in-flight sales - as much as £1 for every passenger. They're gambling that now there are no set allowances, people will buy more.

On this occasion Ray and Pauline weren't tempted, but they will be sorry to see the service go. Ray is particularly concerned that air fares could rise as a result.

Most airlines plan to give up sales of alcohol and tobacco on European Union routes because regulations governing prices could be too complex. The company Ray and Pauline travelled with will instead be offering toys, books and branded goods.

On arrival in Spain, the Tunbridges set off for a quiet spot in the sun to enjoy their duty-free spoils for the last time.

When they next visit Spain, they'd be well advised to do their shopping when they arrive. Duty there is so low, prices for alcohol and tobacco are among the cheapest in Europe.

Ray and Pauline might even find they're spending less than they did in the duty-free shops.

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