A passenger at New York JFK airport shared that they were charged $7.66 for a single bottle of water on Thursday at the ‘Downtown Market’ store near the airport’s gate two inside terminal 1, which houses mainly the international airline partners of Delta-led SkyTeam and United-led Star Alliance. The payment tablet at the store asks the customer to tip on top of this.
— Ross Feinstein (@RossFeinstein) July 13, 2023
After a passenger’s story of being charging $28 plus tax and tip for beer at Newark airport by concessionaire OTG went viral, the Port Authority of New York New Jersey launched a year-long investigation to determine that this violated the airport’s ‘street pricing’ rules.
OTG, famous for making you order everything via an iPad, quickly claimed the pricing was a mistake, corrected it, but still argued that it really wasn’t such a bad deal after all because it was a big pour. Several members of Congress sprung into action for the attention.
The Port Authority, which oversees New York JFK and LaGuardia airports as well, committed to “proactive enforcement” of street pricing rules to make sure that passengers aren’t charged $28 for beer in its airports. Apparently that proactive enforcement extended to beer, but not to $8 water?
Despite lip service to enforcement, it was clear they weren’t actually going to be proactive at all, since at the time they called on passengers to tag their airports on social media when concessionaires charge exorbitant prices in the terminal.
In fact here’s what proactive enforcement by the Port Authority of New York New Jersey looks like. It made then-Governor Chris Christie of New Jersey look petty and mean, and it led to the ouster of the Chairman of United Airlines amidst a corruption scandal. But it clearly doesn’t keep commitments to customers about the price of water.
Passengers aren’t an airport’s customers, they’re the product. The Terminal One Group is a consortium of Air France, Japan Airlines, Korean Air, and Lufthansa. Redevelopment is being financed by Carlyle Group and others. They take a slice of every transaction and benefit from prices that are as high as passengers are willing to pay.
While it’s common for prices to be capped at 10% more than you’d pay outside the airport, airport food is generally bad but also 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. 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.
You can bring your own bottle of water and fill it up inside the terminal. At least some terminals at New York JFK have hydration stations. I’m not confident of the cleaning and sanitization standards for most airport filling stations. I genuinely wouldn’t want to see photos of what they look like inside.