Airlines and retailers pay airports. There are facilities charges remitted by passengers as part of airline tickets (a ‘head tax’) but those are regulated by the government. As a result passengers aren’t an airport’s customers, they’re the product.
However airports in the U.S. are mostly owned by governments, and managed by politically-appointed boards. So customer outrage matters, too, and that’s why many have rules that require vendors to charge only a little more than ‘street pricing’. It’s common for prices to be capped at 10% more than you’d pay outside the airport, but that’s not always enforced – especially, it seems, by the incompetent Port Authority of New York New Jersey which manages several New York-area airports.
Take, for instance, the $27.85++ Sam Adams Summer Ale at New York LaGuardia that also incurs a 10% Covid charge that’s “not a gratuity for employees.”
lol at all of this, including the additional 10% “COVID Recovery Fee” that doesn’t go to workers pic.twitter.com/Bq9rHJqek7
— Cooper Lund (@cooperlund) July 7, 2021
When called on it the airport concessions company argued that this pricing was a ‘mistake’ but also a better value than they’re being given credit for.
Yikes. GOOD CATCH! That Sam Summer **price is incorrect** and has been updated. + note all other listed prices are for 23oz pours.@cooperlund – we very much appreciate you spotting. DM us next time you're passing through -🍻🍻🍻 on us.
— OTG (@OTGexp) July 7, 2021
An OTG spokesperson told THE CITY the prices on the beer at LaGuardia and fries at Newark were “incorrectly posted” and “quickly corrected” — to $18.15 and $8.45. One of OTG’s senior executives is Larry Schwartz, a longtime lieutenant to Governor Andrew Cuomo.
“Because of these posted-pricing hiccups, our in-house menu teams have been diligently working to ensure pricing across all restaurants are, in fact, rendering correctly,” said the spokesperson, Michael Marchese.
Customers who have been ‘overcharged’ will not be refunded, of course. Embarrassed by the call-out, the Port Authority has instructed companies to audit their prices to ensure compliance with street pricing rules.
However, in addition to being bad it’s not at all surprising that airport food vendors are expensive,
- Rent is often far more expensive at the airport than anywhere else nearby. Labor costs are too, whether because of the need to find people who can pass background checks or because local laws often mandate higher minimum wages (New York airports are going to $19 in 2023). Bringing supplies and ingredients into the airport is also costly, because it involves using separate vendors and bringing goods through security. That’s the cost side.
- Meanwhile passengers are a largely captive audience. The government forbids them from bringing liquids through the security checkpoint, “no outside beverages” isn’t just a movie theater rule it’s the law. And in many airports there’s limited competition across vendors, since so many of the businesses that have familiar names – be it Wendy’s or TGI Friday’s – are really the same management company like OTG or Delaware North licensing the brand. Customers, facing long lines and little time during connections, often don’t have much time to comparison shop in any case.
Price aside, has there ever been anything more depressing than ordering off an OTG iPad at Newark Airport CBGB’s?
[…] week I wrote about airport concessions operator OTG charging $28 plus tax and tip for beer at Newark airport. This clearly violates their lease to abide by ‘street pricing’ […]