Airlines choose whether they want to pay taxes on adult beverages served on the ground

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Policies for serving alcoholic beverages on U.S. domestic flights are rarely any sort of mystery to frequent fliers. But there was one instance recently where neither a passenger nor a flight attendant could figure out why one protocol was in place. Generally speaking, major U.S. airlines such as American  (AAL), United  (UAL), and Delta  (DAL) have similar policies.

More specifically, the airlines’ various iterations of first-class offer alcoholic beverages at no charge to passengers who pay the higher fares for their seats. Economy class passengers are served adult beverages as well but for a price. On Southwest Airlines  (LUV), Business Select passengers receive one complimentary premium drink, while the rest of the passengers pay for all of theirs.

Beer, wine, and cocktails are most often free of charge on international flights. Recently, however, Ben Schlappig of One Mile at a Time witnessed an incident that compelled him to share. On his Chicago-to-Warsaw international flight on LOT Polish Airlines, Schlappig relayed a rough version of a conversation he heard between a passenger and a flight attendant before takeoff.

Flight attendant: “Would you like water or orange juice?”

Passenger: “Do you have champagne?”

Flight attendant: “I’m sorry sir, they don’t allow us to offer alcohol on the ground.”

Passenger: “Oh, why is that?”

Flight attendant: “I don’t know, but it is the regulation. We can serve it for you once we take off, and we can serve it when departing Warsaw, but the United States doesn’t allow this.”

Passenger: “Then why is Lufthansa allowed to serve champagne on the ground? Discrimination!”

Flight attendant: “I don’t know, but these are the regulations that we have. I have wondered this too.”

Schlappig said the conversation went on politely for a bit. The two simply seemed a bit curious about the policy but came up with no explanation.

It’s because of taxes

International flights leaving the U.S. are not responsible for paying taxes on alcoholic beverages served in the air. But on the ground before takeoff, paying those taxes is required, according to Schlappig. Airlines follow the same rules as passengers who choose to buy adult beverages duty-free.

“Now, most decent airlines realize that many passengers enjoy a pre-departure glass of champagne, so they’re willing to pay the fairly small amount of taxes to offer passengers that,” Schlappig wrote. “In these situations, you’ll notice that the galley carts are configured so that one cart is for drinks that can be served on the ground, and the other cart is ‘locked’ until after takeoff since taxes haven’t been paid on the contents.”

Schlappig also explains how this service can affect the quality of beverages being served in these instances. “For example, Emirates is known for serving Dom Perignon in first class,” he wrote. “However, if you ask for a glass of champagne on the ground, you’ll be served the business class selection, which is typically Veuve Clicquot or Moet.”

In other words, Emirates is perfectly fine with paying taxes on less expensive products, but not necessarily the premium brands. So this all comes down to a financial choice the airline makes. It’s not a legal requirement the government enforces.