Higher Food Prices Coming To Phoenix Sky Harbor Airport
Grabbing a sandwich or drink could soon cost more at Phoenix Sky Harbor Airport. On Wednesday, the City Council unanimously approved changing the way prices are set.
Currently, airport restaurants are not allowed to charge more than 10 percent above what’s referred to as street pricing. The formula became popular decades ago as a way for airports across the country to keep captive customers from being price gouged.
But, Mayor Thelda Williams and her council colleagues said the two companies that operate all food and beverage concessions, not the city should set prices.
“I think that it is time to let them dictate the prices, knowing full well that if it got totally unreasonable this item would probably come back to council at some point,” she said. “I think they are both good companies. They understand competition, they understand the market, and I think they will be fair on this.”
The two companies, SSP America (SSP) and HMSHost (Host), said low unemployment and projected higher labor costs require they increase prices. The companies initially requested a modification to their current contracts from street pricing plus 10 percent to street pricing plus 15 percent.
According to a city report, a consultant hired by the Aviation Department found a 5 percent increase in prices would generate $19.4 million more revenue than Host and SSP’s projected increases in labor costs.
The Phoenix Aviation Advisory Board voted 5-2 against the request, but the Aviation and Transportation subcommittee recommended discontinuing the airport street pricing policy and allow market competition, which is what the full council approved.
Higher prices could appear on menus by Feb. 15, 2019.