Why Is Airport Food So Expensive?
If you’ve ever snapped a photo of a $9 bottle of water or a $17 “sandwich combo” at your gate, you’re not alone. Airport food prices are notoriously steep, and with good reason (well, at least several intertwined reasons). In this post, we’ll dig into the history, economics, and policies that help explain why grabbing a snack before your flight often feels like highway robbery.
A Quick Historical Glimpse…To understand today, it helps to look back!
The early days: modest offerings and limited scale
In the mid‑20th century, most commercial airports were small, with limited passenger volume and modest terminal amenities. Dining options were minimal, often run by small local vendors or contracted cafés, and competition with off‑airport restaurants wasn’t a major factor. Over time, as air travel became more common and terminals expanded, more space for concessions was built into airports.
Growth, regulation, and the rise of concessions
As airports grew, so did their non-aeronautical revenue models—revenues from retail, duty‑free shops, and food/beverage concessions became critical to covering costs that aeronautical revenues alone (landing fees, airline leases) often couldn’t. Airports saw food and retail inside terminals as captive opportunities: once you’re past security (or inside terminals), your options are limited, and demand is relatively inelastic.
Over time, airport operators formalized concession programs: issuing Requests for Proposals (RFPs), negotiating long-term leases or contracts with vendors, and often using percentage rents (i.e. vendors pay a share of sales) or “minimum guarantees” (vendors promise to pay at least a certain amount whether they hit it or not).
Courts and regulation have weighed in occasionally. In 1989 (510 U.S. 355), the Supreme Court discussed how airports use concession rents and fees to subsidize other airport costs—concessions often pay "market rates" that exceed their proportionate share of overhead, generating a surplus that helps subsidize airlines or general aviation activities.
Thus, over decades the concession model was baked into airport finance: food vendors are not just convenience—they’re revenue centers.
Why the Markups Are So High Today: Key Cost & Market Pressures
1. Sky‑high rent, commissions & minimum guarantees
One of the biggest cost burdens for airport vendors is rent. But unlike a typical street location where you might pay a fixed rent per square foot, airport concessions often incorporate percentage rents or minimum guarantees (whichever is higher). That is, the vendor might pay a base rent plus some percentage of gross sales.
Because airports know they have captive clientele, they can extract more from vendors. Some airports demand steep guarantees, pushing vendors to charge higher prices to ensure they hit that floor.
Additionally, the leasing of terminal space tends to be highly competitive, with limited slots, which pushes up the "cost" to gain that space (i.e. in the bidding process, vendors may accept tighter margins or higher rents).
2. Security, logistics & supply chain constraints
Operating behind security gates (or in secure zones) imposes additional logistic overhead:
Delivery and storage: goods must pass security screening, sometimes multiple times, which slows down deliveries and increases cost.
Limited storage space inside terminals: vendors often can’t store large inventories, so they rely on frequent, smaller deliveries (which are more expensive per unit) or off-site warehouses.
Personnel complications: staff working in airport concessions must go through security, background checks, incur parking or transit costs, and often work odd hours.
Utilities, infrastructure, and terminal maintenance: heating, cooling, lighting, plumbing—all of these come with premium costs inside an airport terminal.
These incremental costs are passed to the consumer in the form of higher menu prices.
3. Limited competition & captive audience
Once you pass through airport security or are inside the terminals, your choices are relatively constrained. You can’t easily leave and come back. That makes the demand less price-sensitive (within reason). Vendors know that, so they often price closer to the maximum customers will bear.
Also, many airports limit how many vendors of a particular type (food, beverage, quick-serve versus full service) can operate in a given terminal, further reducing competition.
4. Brand/franchise costs, construction, and equipment
Many airport food outlets are franchises or licensed branded restaurants. Operating under brand standards can limit flexibility and force higher sourcing or equipment costs. Also, when a vendor builds out a terminal space, construction costs are usually far higher (due to structural restrictions, security compliance, specialized HVAC, finish standards). Some sources estimate build-out costs in airports can reach $1,000+ per square foot—much higher than a typical street or mall location.
5. “Street pricing” rules & negotiated price caps
Some airports adopt policies limiting how far above “street” (local off-airport) prices a concession can go. The idea is to prevent extreme “gouging.” But airports typically allow markups (e.g. 10–15%) to account for their higher costs.
As an example: the Port Authority of New York & New Jersey now requires concession prices at JFK, LaGuardia, and Newark to be no more than street price + 10%, and auditors enforce compliance (including quarterly checks).
However, “street price” has ambiguity: Which store outside the airport qualifies? Are we comparing to a suburban convenience store, or a downtown café? That ambiguity gives vendors wiggle room.
6. Risk, seasonality & contract rigidity
Vendor contracts are often multiyear and inflexible. Vendors absorb risk from seasonality (some days or seasons have low passenger volumes) or shocks (fuel costs, pandemics) but can’t easily adjust prices upward due to contractual limits.
In times of inflation or supply chain stress, vendors may push for pricing flexibility. The Airport Restaurant & Retail Association (ARRA) has lobbied for relaxing pricing restrictions to let concessionaires respond to cost pressures.
Policy, Oversight, and Consumer Protections
Although airports and vendors hold much negotiating leverage, there are policy levers and oversight mechanisms in some jurisdictions.
FAA / DOT Concessions Regulation: Under U.S. law (49 CFR Part 23), airport concession agreements are subject to certain regulatory requirements around how they are counted, how they're structured, and how disadvantaged business enterprises (DBE) are treated.
Federal aid programs: In the American Rescue Plan Act (2021), Congress allocated $$ for airport sponsors to provide rent relief or minimum guarantee reductions to airport concessions in need.
Local/airport-level pricing policies: Some airport authorities, like NY/NJ Port Authority, enforce “street pricing plus” caps.
Audits & enforcement: The Port Authority has adopted audit, compliance checks, and reporting from concessionaires to enforce fair pricing.
That said, there is no uniform federal rule saying that airport food has to be within a certain percentage of off-airport prices nationwide. Enforcement and oversight depend heavily on the specific airport or local authority.
Tips for Travelers (and What Could Change)
What you can do
Bring your own snacks (within security rules) to avoid terminal markups.
Refill water after security using water fountains rather than buying bottles.
Watch for lower-cost options, such as grab‑and‑go kiosks, food courts, or local chains over “airport premium” brands.
Check prices early (before your last boarding window) rather than feeling rushed at the gate.
Push for transparency — airports can do more to display pricing and enforce caps.
What policy or business changes could help
More airports adopting strict street‑price caps with strong audits.
Flexible concession contracts that allow vendors to adjust in inflationary times.
Incentives for local independent vendors or small businesses to participate (not just big national brands).
Expanding public‑private partnerships that align consumer interest (lower prices) with airport revenue.
Encouraging technology solutions: micro‑kitchens, centralized commissaries, or automated vending that reduce labor margin overhead.
Airport food is expensive not because vendors are always greedy (though margin incentives matter) — but because they face a uniquely costly operating environment, captive customer bases, and contractual burdens. The system is baked into airport finance itself, which makes dramatic change slow. But with pressure, transparency, and smarter contracting, travelers can hope for modest relief.
Know Your Rights. Claim What’s Yours. Fly Fair.
Fly Smarter. Pre-buy those Snacks. Enjoy.
Sources
National Academies of Sciences, Engineering, and Medicine – Resource Manual for Airport In-Terminal Concessions
https://nap.nationalacademies.org/read/13326/chapter/3Port Authority of NY & NJ – Pricing Compliance Policy
https://www.aviationpros.com/airport-business/airport-infrastructure-operations/airport-revenue/concessionaire-retail/press-release/21267650/the-port-authority-of-new-york-new-jersey-port-authority-announces-comprehensive-new-measures-to-bolster-compliance-with-street-pricing-policy-at-airport-concessionsU.S. Department of Transportation – Airport Concession Disadvantaged Business Enterprise Program
https://www.transportation.gov/osdbu/disadvantaged-business-enterprise/supplemental-notice-proposed-rulemakingCN Traveler – NYC Airports Can't Overcharge for Food Anymore
https://www.cntraveler.com/story/airports-in-new-york-city-can-no-longer-overcharge-travelers-for-food-and-drinksPolicyGenius – Why airport food is so expensive
https://www.policygenius.com/travel-insurance/news/airport-food/NYP Post – Port Authority Explains Airport Water Bottle Pricing
https://nypost.com/2025/04/09/lifestyle/port-authority-explains-why-water-bottles-are-more-expensive-at-airports/ARRA (Airport Restaurant & Retail Association) – Advocacy for Flexible Pricing Rules
https://www.arra-airports.com/advocacy/arra-urges-airports-to-waive-pricing-rulesLaw Resource – Supreme Court Ruling (1994): Concession Revenue Use
https://law.resource.org/pub/us/case/reporter/US/510/510.US.355.92-97.htmlCornell Law – U.S. Code: Rent Relief for Concessions (15 U.S. Code § 9121)
https://www.law.cornell.edu/uscode/text/15/9121