Larry Summers, former Clinton Treasury Secretary, Obama chief economic advisor, and Harvard President, observed last year that “the newer the [airport] terminal, the less convenient it is to use” thanks to all of the long walks and wondered why that’s the case.
The reason is actually simple economics, but to see that you have to be aware of the details of how terminals are financed, and how airport revenue agreements work.
I have just travelled thru the new LaGuardia airport. It confirms a theory of mine. The newer the terminal, the less convenient it is to use because all the walks are longer. I wonder why?
— Lawrence H. Summers (@LHSummers) April 26, 2023
When an airport authority brings in private companies to finance construction of a new terminal, there’s rarely much discussion of how those companies will make their money. One of the primary ways is from concessions. They’re going to rent out space in the terminal to retail shops.
- The more revenue those shops makes, the more they can charge in rent
- And deals are generally structured so that the terminal owner takes a percentage of revenue as well
- Where there’s a dominant airline especially, the airline will often share in concessions revenue as well.
New York LaGuardia Central Terminal
Passengers are not an airport’s customer, they’re the product an airport (and airline) sells to merchants who rent space inside the terminal.
Long walks frequently designed to accommodate more shopping, with more retail space in the terminal. And airports don’t want passengers skipping the shops!
This seems obvious if you’re familiar with airports, but a lot of very smart people aren’t aware of it, so it also seemed worth explaining.
Why? The whole point of redoing LaGuardia was that everyone was sick of it being absurdly crowded…no place to sit, nothing to eat except deep fried pretzels. So this seems like asking, "why, in seeking to make it bigger and less crowded, did they make the airport bigger?"
— Stuart Buck (@stuartbuck1) April 26, 2023
Designed to improve “on time” arrival and departure which are measured gate-to-gate. This also why airports like Denver are so far from town. Ironically, these things make your door-to-door timing worse.
— Bill Gurley (@bgurley) April 26, 2023
This principle isn’t limited to large new construction terminals, either. Both Dallas-Forth Worth and Chicago O’Hare removed moving walkways that used to assist passengers in their journey and speed up travel in the terminal (which reduced the risk of passengers missing flights!). Dallas spent one million dollars to remove theirs. The reason is that passengers on a moving walkway skip all of the shops along the way!
You’ll frequently see international airports that route you through duty free on the way to your gate, forcing you to take a circuitous route. Sydney’s airport is famous for this, and so is London Heathrow. In fact, British Airways reportedly pays Heathrow £1 million per year to have a door immediately past security on the right that allows first class passengers direct access into the Concorde Room lounge rather than having to be routed the long way through the shops.
Now retail isn’t the only reason that terminals are often larger. They may need to accommodate more planes, and larger planes, that the ones an earlier facility was built for. You may need a midfield concourse to accomplish that, given what other structures are already in place. But the thing that’s common across airports is that incentives are aligned to push travelers to do more walking past shops because that’s a tremendous source of revenue.
Ultimately though the purpose of an airport is to get somewhere quickly. You want an airport that you can get to quickly, get through security quickly, and get to your gate quickly. New larger terminals may be more beautiful, and more revenue-generating, but that doesn’t make them “better.”
MIA concourse D wins the prize for distance! 1 mile from D1 to D60. Piss poor design to say the least.
I so dislike the “airport as shopping mall” dynamic that I have long tried to minimize any and all spending at airside retailers. And as airports increasingly make it take longer to get from check-in desk to boarding gate, the more people are inclined to arrive earlier and shop more at the airport and crowd it up more that way.
More gates need bigger buildings.
Gary – maybe as a thought leader, you can dive deeper into the business model of some of these stores. What kind of volumes do they do – how many dress shirts or Omega watches are sold? I can see some perks for Duty Free for international travelers – but does anyone really buy major stuff (like new Tumi?) at the Cleveland airport (a random example from my home town)
People do buy gifts for themselves or others at airports. Some even buy expensive luggage and luxury handbags airside.
Nothing wrong with getting more steps in before you have to be crammed into a seat for hours.
My favorite old airport was Kansas City International. It was literally 20 or 25 yards from curb to gate, tops. Now, 9/11 changed all that and what was a major convenience became a huge problem as there were absolutely NO places to put food and vendors inside security. I love the new terminal, but it IS a long walk….
Considering Larry Summers background and supposed expertise, I hope that his question is meant to be rhetorical.
@Michael, my theory is that very few people ever enter an airport with the plan to purchase expensive items such as a new Tumi. However, when faced with a 3 or 5 or 9 hour delay, the willpower starts to dissipate. This is where the real money is made.
If you want to talk about long airport walks can we talk about MUN and FRA? I feel like Mao Tse-tung on the long march going through those.
If the airports are designed as retail space why do we ignorant citizens allow our government to fund airports with TAX money? Charge the full occupancy cost to the business and they will all leave and that makes room for more and closer gates after the remodeling demolishes all this crap. Airport remodeling is NOT infrastructure improvement it’s graft.
Everyone’s situation and preferences are different and can change of course, but I personally absolutely love larger walkable terminals. Could not care less about the shops I hardly pay attention to them — for me it’s inspiring just walking past the gates and seeing where all the planes are going and just be fascinated on how air travel has connected the world. Plus walking before flights and getting some circulation going before sitting down the long periods of time is always nice.
Unpopular opinion I’m sure but DFW is my favorite domestic airport largely because it’s huge and everything (except E) connects via airside walking paths. If I’m in a rush or I’m tired I can hop on the Skylink. Did not realize they got rid of the moving walkways, I’m guessing those were within the terminals themselves — there’s still some in between concourses but of course those areas are much less frequented. My primary reason for taking moving walkways is more so avoiding gate crowding (like in DEN) rather than speed.
Passengers can avoid the hikes between gates by using wheelchairs or the golf cart type vehicles in some airports. Those of us nearly 90 routinely request a wheelchair because otherwise we may not make our connection: we may be able to walk the distance but not in the time available.
The shopping mall airport/no moving walkways has forced me, a 72 yr old mildly disabled woman to use wheelchair service to my gate and then again on arrival to baggage. I miss the art that the moving walkways displayed…I miss feeling capable.
@Barbara Ganschow. I’ll push your WC anytime. Frick does bustards.
Yeah David P, they make $ from the stupid. When faced with a delay, I plan my next download from my streaming service.
That’s also why airlines want you there 3 hours before your flight. More shopping time and the likelyhood you’ll eat and drink.
Woofie says:
I will second your belief. Last week we flew home from Vienna to Malta, via Frankfurt. We flew from Vienna to Frankfurt on Austrian. It was actually a 787 being used by Austrian to train the flight attendants. Full course hot lunch and wonderful Austrian pastry, along with worlds best coffee. It was supposed to land at A-15. Our connecting flight was from A 52 ( a very long walk through two concourses and a shopping hell in between.
But, as all who fly through Frankfurt know, the gates are changed by the minute. Ours landed instead at an apron. So, a bus to the A terminal. Only this time, instead of placing us at the terminal around A-50, they dropped us off at another location in A terminal. When climbed the stairs into the terminal, it was A-1. Also, to complete the day, our Malta flight was moved to A-59.
We were scheduled to have 50 minutes, to now walk a mile, at least. But, the plane landed late. We had 40 minutes. Ever see an 81-year-old run with two carry-ons for a mile. Suffice it to say, it took us 50 minutes. As I about passed out at the gate, the agent told me the flight would be delayed 20 minutes. ( I did receive a message on my LH app saying we realize that you may not make your flight. Change plans if you want. (Thanks LH. It was the last flight of the day to Malta.) Yeah, we passed a ton of stores. Wish we had enough time to stop. Not to mention that the halfway point in my marathon was the LH Senator Lounge, which we had to pass on by.
Actually, everything like this can be explained in three words:
Follow the money.
On the flip side, at least some airports have reconfigured themselves with more airside terminal connections so you are not limited to whatever is in your terminal . And I much prefer to walk than take a train.
Incidentally, the real advantage to the LHR BA F check in is avoiding the awful and crowded T5 security screeners.
This is easy in the case of LGA. The headhouse and the concourses had to be built around the existing airport while it functioned. There was no other way than having them far apart on such a small parcel of land
Not being genetically of American stock, I have thankfully avoided the accursed ‘shopping gene’ (and the even more insidious tipping gene BTW).
Also as a male of a certain age who loathes shopping I am of the opinion that if whatever you need cannot be bought on-line and delivered to ones door then you don’t need it.
The perfumed siren call of airport shopping mazes are 100% lost on me.
Pittsburgh International – all the restaurants close before 8 pm as well as most of the shops. BA flight to LHR takes off two hours later so passengers are left with no food options. Best airport in the world for quick gate access is Bahrain International. “Awarded Best Airport Staff in the Middle East 2024” from SKYTRAX for the second year in a row.
HS:
Bingo!! Follow the money it is!!
As I get older, I can see the day coming in some airports when I will have to use wheelchair service due to the long walks. The walks on arrival, through immigration and baggage claim, don’t seem to be anywhere near as long. Wheelchair service does not stop for retail. Maybe the airports could be sued for elder abuse unless they provide a bypass.
One of the best perks at Portland International is paying the same prices at the concessions compared to their outlets outside PDX.
Many years ago the port authority ruled that no concessions in the airport may charge more than regular retail stores. NO PRICE GOUGING!
You want an airport that you can get to quickly, get through security quickly, and get to your gate quickly. New larger terminals may be more beautiful, and more revenue-generating, but that doesn’t make them “better.”
Gary,
Have you forgotten Gate 35x at DCA? – you have moaned about it often here.
Except for that, the new DCA is a nightmare from car to gate, but nicer to look at and less crowded
I remember being appalled when the American Airlines terminal at JKF was redone. Down a very steep escalator, walk a lot, back up a very steep escalator, then walk a lot again to find your gate (as I recall, there were moving sidewalks for part of the way). I couldn’t even imagine how long it would take someone in a wheelchair to go from streetside to their gate and how many elevators they’d have to take.
I used to love SLC. It was an easy airport to navigate. Not any more! I had a bit over one hour to make a connection from Calgary to Atlanta via Salt Lake. I walked from one end of “east Jesus” to the other end of “west Jesus”. I had to navigate a LONG underground tunnel and managed to snag a ride on a golf cart. When I popped up in the other terminal, there was NO SIGN of a moving walkway or anything. I made “last call” on my flight to Atlanta. ARGH!
Never buy anything in an airport , priced way above the cost outside the Airport. Who pays $18 to $25 for a crappy burger. Everything overpriced and not worth it. And all those stores selling clothes, jewelry, electronics etc., who would be that desperate? Some Airports have put so much crappy restaurants in the center walkways that many times you have to walk in a close knit group to move between gates.
Can’t recall the last time I bought ANYTHING in a US airport other than a soda or coffee.
Now give me Singapore or Dubai and we can talk but it’s mainly things we can’t get here.
And in my 70s, those long terminal walks are a nightmare for my aching hip. Interestingly, in Jakarta, they offered me a golf cart ride and refused a tip. Kept saying, its free, it’s free.
Let’s not forget that a lot of the expanding facilities are to accommodate the ever-growing list of Airline and Credit Card Clubs that are another big moneymaker.
when DFW opened in ’74 the promise was as little as 100 yards from parking to Gate. That actually happened, it wasn’t much further from the Infield parking. Love Field no longer allows taxi or Uber to pick up passengers in front, it requires taking an elevator up to a hallway .. claim is only a 10-minute walk to an area at the far end of Garage B, where you tell the Attendant whether you want a cab, Uber … they then call down and give permission for it to drive up a couple floors. In Summer, 100+ degrees, lugging a bag or two, it’s at least 20 minutes, the ‘moving sidewalks’ are usually busted. BUT, Love has given an exclusive contract to a high-dollar driving service with fancy new cars and non-immigrant drivers … THEY can pick up passengers in-front! Welcome to Texas!
Denver is way out in the country because the airport required runways over two miles long because of the high altitude and high temperatures during the summer. Plus, parallel runways had to be far apart to allow simultaneous approaches in bad weather – and there had to be crosswind runways too. All this meant a huge piece of land for the then-new airport and that land was only available far out of town. At least there are electric trains to city from the airport.
I’ve connected at Denver a few times. The real fun is coming into gate B69 and connecting to gate B20. It is a cross country hike for sure.
At ORD, did UA or the City of Chicago, Department of Aviation rip out the moving walkways at Terminal 1 between Concourses B and C?
They fully operational during my last visit in May.
SO_CAL_RETAIL_SLUT
DFW shops amaze me sometimes. Such weird stuff to buy when all you have is your carry on. At least it is quick to get in and out as long as you’re not connecting. And I’m usually headed straight for a lounge anyway.
Also, for a medium airport, the NEW North Terminal at New Orleans Armstrong MSY is fantastic for speed to the gate. I can walk in, get through PreCheck and at my gate in less than 10 minutes. And if I’m early, plenty of food and drink options. Though, lounges for me are lacking.
Only lazy, fat Americans have a problem with this.
the worst i’ve seen lately is in Amsterdam …I now won’t book thru there if I can help it!!
One of the great things about connecting in CLT is the moving walkways.
The worst is Edinburgh a shopping mall with an airport attached.
DemonRat graft! The Rat Summers knows that well.
Interesting perspective. I don’t see it this way though. There isn’t empty space if you look from the outside in (airplane wingtip to wingtip from end of end to the new parallel terminals). Parallel terminals is the most efficient to get airplanes in and out. Underground trains or walkways or both are the only way to get to the other terminals. Denver, Atlanta, Salt Lake City, LaGuardia brings you up and over instead of underground. Same principle. It’s just more walking because it’s the most efficient way to allow planes to pass each other with inbound and outbound flights and a walkway not preventing that.
This is not new, huge terminals and long walks have been around for (at least) a quarter of a century.
Incheon in Korea, Suvarnabhumi in Thailand, and other airports that opened in the 2000’s all exhibit long walks. I fly a lot… I don’t see many buyers of luxury luggage or designers clothing at the airports.
These designs are motivated by greed. We pay taxes integrated into each ticket for these purposely long circuitous walks while carrying luggage. Airport authorities are abusing the public in a cynical fashion. Using an airport should not be a forced exercise session.
Designed to extract every dollar from the public’s pocket. These new public//private development projects allow politicians to select investors that cant loose. as the ticket tax assures incoming revenue
SLC wine the prize for absolutely the worst new airport! Heck they can’t even keep the power on the last time I was there, it was a total nightmare.
I would fly in twice a year, and the old airport was easy and convenient, and then BAMM, they changed it… And the entire arrivals and departures are backwards!
Someone, somewhere, made a ton of money of the bad design.
Got a good tip from the CK agent at LHR taking me from T5-T3 – when you clear the security at T3 and come down stairs to re-enter the terminal turn right and follow the very small quick connection signs instead of going under the enormous sign directing you to the gates – through all the shops. Saves you a bunch of time meandering through underwear, perfume, and booze.
Gary, you didn’t mention how airports withhold gate information (e.g. LHR) so you don’t skip the centralized shops and head straight to the vicinity of your gate.
Paul, tax money does not fund airport terminals. It’s a combination of airline gate rentals and concession revenue – the more concession revenue, the lower the rental rates and hopefully more flights.
Malenko, you may want to keep an eye out for PDX pricing – having street side prices at airports just leads to unsustainable concessions. Think of all the cost that you have at an airport that you don’t have on the street (employee badging, longer delivery times plus a charge for delivery, employee parking…)
Nathaniel Phillips, the only thing those ticket fees cover is airfield costs – some special charges can be assessed called PFCs, but there is a tight cap on the amount you can charge and it is nowhere near enough to cover terminal cost
I think in the case of LGA, the walks are also long and circuitous because the new terminals were constructed around the existing terminals while they were operational.
I like the challenge of finding the shortest path through the needless shopping. At LGA it’s not the gradual counterclockwise arc but a sharper left turn through the little aisles.
Before retiring I lived out of a suitcase. One year I was platinum with both UA and AA – nearly all of it was domestic hops. I have a 2nd house in Europe so I do fly there RT at least once yearly. Thus, I am too familiar with airport terminals around the planet. In my experience, the best airport is Reagan Washington National (DCA). Even brief walks have peoplemovers. In contrast, the worst terminal on the planet is the new international Terminal C at Orlando (MCO). My last several arrivals from Paris I had to walk up (not down) 7 flights of rampy stairs (no elevator or escalator options) then I had to walk close to 2 miles, thru the baggage claim to get to passport control with no people movers or shuttle trains – nothing – just walk. I did pass one toilet along the way. Like most new terminals, C is a shopping mall with hundred-foot-high ceilings (for no reason). The real killer is if you have a connecting flight at MCO. By my reconning, you face a 5-mile walk which takes you from your arrival gate, thru the terminal, out of the airport, and thru the parking garage to get to the shuttle train to the A & B domestic terminals. Expect to get lost enroute, the signage is useless.
“Malenko, you may want to keep an eye out for PDX pricing – having street side prices at airports just leads to unsustainable concessions. Think of all the cost that you have at an airport that you don’t have on the street (employee badging, longer delivery times plus a charge for delivery, employee parking…)”
I doubt that street side prices lead to unsustainability. The prices will not be the lowest prices available streetside, rather an average or even near the top. Without the specific wording of the contract, precisely what is meant by streetside pricing is hard to determine. The pricing could even be more than at any streetside vendor if enforcement is lax. Further, at many airports you have large crowds of people as a captive audience. That is not as common in many places that have actual competition. The long walks past all of the concessions is kind of like how Ikea (which advertises it’s affordability) sets up their stores. A downside to airport terminal sales and especially sales past the security check is that people have limited luggage space to take on items. So even if the price is reasonable, people still cannot stock up on a lot of snacks and carry on food. I think unsustainability for airport concessions is related to high pricing, trying to sell the same things as the next store (unnecessary competition) and not really studying what should be sold. I think the high pricing scares a lot of potential customers from even stepping inside of the stores. More reasonable pricing may lead to significantly higher sales volume.
You have not experienced ridiculous amounts of walking until you have been to the new Istanbul Airport. You walk and walk and walk to Transit security and then walk and walk some more back to your gate. It is on another level. All the walking, lack of water fountains plus generally rude and unhelpful ground staff make IST one of my least favorite airports.
I have worked in airport management for the past 34 years at airports of all sizes even building several terminals and this is an interesting and timely topic. I assure you that the passenger experience is front of mind for airport executives as traveler expectations continue to evolve and mature. There are several reasons for this and as Gary stated in the story it has some to do with the need for space to generate revenue to cover the ever-growing operating costs of the terminals, but also to cover the shifting of capital costs.
Over the past few decades, the capital burden for new terminals has shifted from the feds and airlines more to the airport owner (authority, city…). In the early days the airlines often took on the task of terminal development, however that now only occurs at key hubs, albeit they do help to cover some debt service through rents at most airports. Federal participation such as the AIP grant program which come from ticket taxes covers some costs, but they are not keeping pace with construction inflation. Also, the PFC has been frozen at $4.50 for 20 years and only buys cents on the dollar these days, so this requires airports to get more creative. Build a few more square feet and add an espresso or wine bar to help pay off some of the bonds. Another option available to larger airports is a public private partnership which is how LGA and others were able build these great new terminal buildings. These 3Ps must also generate a return on investment, so optimizing concession space productivity is crucial.
Another reason the walk is getting longer is more people are flying which means more and larger hallways and airplanes, especially at hubs. The larger airplanes must also be spaced further apart and the departure lounges must also grow in capacity and number. Airport and architects put a great deal of effort and thought into planning and simulating passenger circulation in an effort to find ways to move passengers from gate to gate efficiently. Airports will also shift airlines around to group airlines, but the airlines, not airports, ultimately decide how connecting banks are structured and who will have how much time to walk between gates.
Most airports understand that the experience effects airport and airline decisions and there is more to be done to improve travel. P.S. the walk is shorter at the smaller airports.
Recently returned from FRA on AA landed in DFW had to make it to my connecting flt to OKC my “Walk-about” was at least 20+ minutes. Absolutely ridiculous!!
At O’Hare Terminal 5, there are three relatively short moving walkways going “outbound” (for departing passengers), even though there are very few stores or restaurants beyond the central part of the terminal. And there are no moving walkways “inbound” for arriving passengers, even though arriving passengers are much less likely to stop at the stores and restaurants on arrival — and, as I said, there aren’t many stores or restaurants outside the central part of the terminal.
Jns, I agree with some of what you are saying, and price gouging at concessions is plain wrong- but most airports adhere to a Street Plus 10% or Plus 15% cap, which I think is right in line. Volume may work things out in some concession units, but if you want a variety and units that are open for passenger service requirements not just high turnover, you have to make some other accomodations for the cost difference.
I don’t recall having to walk through duty free at LHR T5 after clearing security, even while transiting (of course, it is a huge shop on the lower level). I do recall some shop after transit security in T3, plus another large duty free shop in T3 itself.
I remember transferring flight in GUM. I deboarded and after having to go thru customs, another security check and immigration I had a slight headache so to ahead it off at the pass I saw a concessionaire in the moddle of the walkway. Decided to get some tylenol. Sticker shock….a pack containing 2 tylenol was $17.00. My headache cured itself.
I don’t think BA are getting a very good deal out of that £1 million at LHR. It’s not like Concorde Room or First lounge pax have direct access to jets. First pax departing from gate A15 (which is directly beneath the Concorde Room balcony) still have to walk past Smythson, Bottega Veneta, Louis Vuitton, Rolex, Burberry, Gucci, Paul Smith, WH Smith and Itsu to get to that gate. They just get better security and to see the horse.
Let’s not forget the B concourse at JFK T4 (not especially new terminal) – that’s a haul if you have to leave from B55, granted there are some shuttle buses if you wanted to wait for one. Heathrow T2 has a very long walk from some of the gates to arrivals via a lot of underground passageways. As pointed out AMS can be a pretty long walk due to it being all 1 terminal