Why are airports so expensive?

A large airport gets around 40% of its revenue from non-aeronautical activities (retail, food and beverage, parking, car rental and advertising), according to economic reports from ACI, the global airports association. Airline fees are regulated and often capped by the state, so shops and bars are the more flexible way to fund terminals, runways and debt. That money comes through concessions: the café operator doesn't pay a fixed rent but a guaranteed minimum plus a percentage of revenue that can exceed 20% in the best locations.

Once past security, the passenger is a captive audience: they can't compare prices with the street, can't go back out, have idle time, and have a real need to eat or drink. Retailers know this and set prices higher than downtown. Some regulators and operators have responded by imposing street-pricing-plus-small-surcharge policies, or requiring concessionaires to match their city prices, with mixed results depending on the airport.

Operating inside a terminal is also genuinely more expensive. Every employee needs a security badge and goes through checks; goods arrive through guarded access points, with inspections and restricted hours; shops open from the first flight to the last, seven days a week; warehouses are far away and waste leaves by the same route. Rents in the departure area, measured per square meter, are among the highest in retail. All of that is spread over fewer sales per hour than a street shop, and the result is airport-priced coffee. The partial exception is duty-free shops, where the tax savings partly offset the operator's margin.