How Airports Turn Passengers Into Products Instead of Customers

In writing about New York’s $13 billion plan to renovate New York JFK airport I pointed out that the redesign wasn’t about serving the passenger, it’s about serving investors.

Things like first-class shopping, dining, and business amenities aren’t actually about the passenger experience.

Instead we’re going to get lots of high end retail because passengers are the product not the customers. In order to fund projects what airport authorities are doing is getting the private sector to front much of the bill, and in exchange those investors get the future revenue stream. Public-private partnerships aren’t free.

Airports aren’t being designed with passengers as the focus, they’re being designed with selling to passengers as the focus.

Wendover Productions does a nice job explaining how airports make money. They highlight the revenue generated off of retail sales, parking, and from lounges — and the strategies airports like London Heathrow use to encourage greater shopping. Did you ever wonder why some European airports don’t tell passengers what gate they’ll be departing from until close to departure? That keeps everyone in the central shopping areas.

Dallas Fort-Worth airport spent a million dollars to remove moving walkways from the D terminal. That’s so passengers wouldn’t find it as quick and convenient to get to their gates, and might shop along the way instead.

Airports want to encourage shopping and restaurant sales, and especially high-end sales — they’re usually taking revenue off the top. That’s why it’s worth a million dollars to take away the option of moving walkways from passengers.

United pushed to remove walkways from the C concourse at Chicago O’Hare. They want passengers shopping not traveling effortlessly to their gates. Moving walkways stay underground at O’Hare, where there’s no retail.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Why do people think watching an 11 minute video is better than reading an article with a few images and short videos? I have to imagine the percentage of people who click away after a minute is in the 90s.

  2. I wonder, is this such a bad thing? Of course there will always be examples on the margin that stand out as particularly egregious (removing moving walkways, creating increasingly elaborate duty-free mazes for pax to go through, etc), but as a general matter I have no problem being the “product” in an airport. Would I rather hyper-efficient, yet bleak, airport designs devoid of retail (that indeed might have been offering items I need), that I in turn pay for via higher airfares (as a passthrough from the higher landing / leasing fees airlines will need to pay)? Absolutely not.

    Further still, there are at least some natural forces / incentives that operate as a check on keeping the practices you describe at bay. Airlines should generally be motivated to push airport operators for efficient airport designs, since minimizing connection times maximizes potential flight combinations the carrier can sell; in some places passengers have a choice of airport (NYC being a prime example, but passenger choice is not enough to overcome the absurd political and regulatory issues we have here); etc.

  3. Haven’t we just spent 40 years dedicated to the notion that the only correct way for any organization, public or private, to operate is “like a business”? Why the heck should an airport not operate like a business and increase return to its investors instead of engaging in some namby-pamby attempt at promoting a public good like efficient movement of passengers?

    In fact, just the fact that the airports have investors is proof that we’ve finally shaken off the retrograde notion that airports, or any government agencies, should be providing services for the good of the public! Of course the investors should get a maximum return on their investment. That’s what investment means! If we didn’t want the airport to operate under those constraints we’d build them from a kickstarter or, if that didn’t work, confiscate the hard-earned money of the general public (or maybe just the air passengers) and build and operate the airport that way. True, we’d probably have to call them “commyports” or something similar.

    And, why don’t we just trust the market to solve this problem for us? If Gary doesn’t like the way DFW or ORD is operated, why doesn’t he just build his own Dallas or Chicago airport? No doubt his would be much more customer-focused and would quickly put the other airports out of business. He could call it Adam Smith International! Instead, he wants to crush the entrepreneurial spirit of the Producer class by taking funds from investors and artificially lowering the amount of return they’re allowed to receive to support the perceived interest of the Freeloading class of travelers.

  4. A good post, Gary, though I don’t think making airports more investor-friendly is by any means mutually exclusive with making them passenger-friendly. The one that most stands out in this regard is Singapore, which is such a pleasure to pass through that a long connection time is a bonus rather than a bother.

    Having said that, the worst thing about the JFK and LaGuarida airport redevelopment plans is not what the spending is going for, but instead what it’s not going for: good, direct public transportation options to get to and from those airports relatively quickly and easily. (I realize there are other important things missing as well.) For passenger convenience, energy conservation and environmental purposes – and perhaps even as a source of appeal for NYC-based corporations and other businesses – it’s really inexcusable to to not do this in any airport redevelopment effort.

  5. @LarryInNYC excellent!

    I’m actually a proponent of privatized airports (and other infrastructure like railroads and roads), but I have to commend you for a highly-enjoyable and quite persuasive argument on the other side.

  6. @SeanNY: Honestly, I don’t have a strong opinion on the issue of publicly funded versus for-profit approaches to building airports. I can see advantages and disadvantages to each position.

    What irks me (perhaps you could detect that I was irked?) is the pseudo-intellectual, pseudo-libertarian position of insisting that the best results for fliers will by definition be achieved by the for-profit, market based approach and then acting shocked — shocked! — when managers actually try to maximize returns on their investment. A for-profit airport is there to make money, the ability for passengers to rapidly and efficiently transit the airport (at least, without paying an extra fee) runs counter to that goal, so why the false outrage when the airport seeks to maximize profit by making the consumer’s experience less efficient?

  7. Some European airports these days seem to me more like a shopping mall with a few gates attached here and there. The maze of shops can be incredible, and obviously we’re moving in that direction in the U.S. The thing is I have no access to any checked bag at that point and no interest in adding to my carry on items. I’ve always been a bad customer for airport shopping.

  8. I’m okay with an airport turning itself into a shopping mall as long as it doesn’t compromise the core mission of getting people to their destinations.

    Removing moving walkways does exactly this. Needless to say, I don’t route any tight connections through DFW. And since I can’t always control when a connection will be tight, I avoid DFW entirely. All because of this decision.

  9. Gary says: “United pushed to remove walkways from the C concourse at Chicago O’Hare. They want passengers shopping not traveling effortlessly to their gates.” United is always penny wise and pound foolish. If you have a tight connection and miss it because there are no walkways, guess what, you will avoid ORD, for the next 500 flights. Ok, 500 flights is an exaggeration for dramatic effect, but you get the point. Fewer flyers, fewer potential customers. Sing that United song. “Dumb, Dee, Dumb, Dumb”.

  10. Eh, there isn’t that much shopping to be done at ORD Concourse C.

    With the now old BG 1-5 corrals, one of the problems with the moving walkways in C is that when people would line up early for their flights, they would block the walkway along side the moving walkway making it difficult to get to gates further down stream. Removal of the walkways gave more room for passengers to navigate around gates that are boarding.

    Also, unlike Denver, Detroit or Minneapolis, it’s not like the B or C concourse is so long that the moving walkway made an appreciable difference in speed. If you had to navigate around a slow-poke or stander, I could often walk faster than the walkways moved.

  11. @Johhny. LOL
    Duggie and I have been talking about that even before The Max made it to the drawing boards. If only we can figure out how to get to 26” and one less head it might work.

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