Why Is Airport Food So Expensive?

One of the things I usually do before showing up to an airport is grab a bite to eat, usually fast food or a meal at home before I leave. Why? The food at the airport is so expensive. Even a simple coffee is over $5, which is insane! But why is food at the airport always so expensive and is there anything that airports are doing about it?

Economics

Probably one of my least liked courses in college, economics is why your food costs so much. Once you pass through security you're basically locked in, it's not easy to exit the airport to find food and realistically nobody is going to do that. Economists like to call this a "captive market." You have two choices when it comes to eating at airports, you can eat or you can not. There is no competition to drive prices down and due to high costs of getting food on the airport property restaurants and fast food places at the airport have no incentive to lower prices.

Airport retail space is expensive, retailers usually have to pay a lot more than outside the airport pricing making their rent expensive. Then there's deliveries, you can't just drive a semi-truck on to the airport property to get your stock. An airport is considered a secure location and thus getting anything on to airport property requires security checks, delivery drivers must be vetted by security, and the total time it takes to deliver can increase from the truck to the store. All of this adds time and cost that must be accounted for.

There's also labor, airports generally see a higher labor cost associated with competing wages between airport staffing and airline staffing. Why work at McDonald's for minimum wage while the airline gate agent is making $20+ an hour. This generally pushes wages higher for airport workers to around the $20 mark. Generally these wages are meant to compensate for additional time it takes for workers to commute to the airport, take the bus to the terminal, clear security, and depending on the size of the airport, make it to their work place.

Incentive

Most people have a purpose to be at the airport, more than likely you're traveling for work or going on a vacation. There's a different social stigma when you're on vacation or the company dime, it's seen as a singular expense and thus you're willing to spend a bit more. There is no incentive to shop around, or be competitive with your spending habits, instead it's all about making your experience at the airport a little more bearable.

Likewise retailers at the airport have no incentive to lower their prices, if they know that you're a trapped consumer in the airport and will eventually cave into purchasing something they can wait you out. The market dynamics are skewed at an airport this way because at some point you've just realized you're going on an 8 hour flight and sitting in economy you're going to get one meal and nothing to snack on. Or you're flying on an airline without inflight entertainment and to keep from pulling your hair out you need some reading material.

Who to blame?

The obvious choice is to blame the retailers for increasing prices at the airport in an apparent gouge of the system. I would only partly agree. We have to admit there is an increased cost in transportation and security checks to get items to the airport including airport labor. All of these factors arguably add cost to operating at an airport. I believe the added costs don't add up to paying 2x or 3x the price for items you can buy on the street. There is no reason a $1 bottle of water should cost $3, that's just insane!

Can we resist?

Absolutely, there are things that I do to reduce my reliance on having to buy anything at the airport. Firstly I usually eat a meal before I go to the airport, sometimes it's just fast food, other times I eat at home before leaving. Buy snacks at the grocery store, you are allowed to bring food through security at the airport, I like to pack granola or some sort of trail mix. Have a reusable water bottle with you, while you can't bring liquids through security, you can bring an empty water bottle and there are more than likely refill stations all throughout the airport to fill up. And lastly, if you happen to be in a place to afford it, utilize airline lounges. I know that not everyone has access to a lounge and depending on access restrictions there's a monetary cost involved, however if you can utilize one then it's worth while to grab a bite or drink in the lounge.

Can we change?

Airports have caught on to these pricing tactics and have started to regulate airport pricing by requiring them to match the "street price" of the food outside of the airport. Notable examples of this is the Seattle and LaGuardia airports require street pricing for food and drinks, with a 10% buffer for costs. That I believe is much more reasonable. Thankfully more airports are following the lead and implementing the same cost controls, however there are still some places where pricing is insane.

Final Thoughts

We must acknowledge that food and retail pricing at an airport is going to be more expensive, the costs associated with it are very real. However we must know when to put our foot down, especially if simple things are 2x or 3x as much compared to outside the airport. As consumers we must resist to being their captive market and do what we can, like bringing our own snacks, to send a message that there's a line between the cost of business and price gouging.