The Company That Wants to Bring New York Airports Back to Their Former Glory

New York-area airports became a national mockery earlier this year when Vice President Joe Biden likened LaGuardia Airport to that of a third-world country.

These empty, confusing spaces that bookend trips to New York City have long been a blight on visitors’ and locals’ travel experience.

Biden’s comments lit a spark under state officials — at least their defensive side. New York City Mayor Bill De Blasio defended the airport, praising airport employees’ hard work, and Governor Andrew Cuomo introduced a $500,000 design contest for John F. Kennedy International and LaGuardia airports.

The Port Authority of New York and New Jersey, which runs the airports, had recently announced it would spend $8 billion on improvements and construction at the two facilities and Newark-Liberty International over the next 10 years.

Outside of these plans and promises; however, there’s been real transformation slowly spreading from terminal to terminal from LaGuardia to Newark.

Passengers are ordering croissants from iPads in LaGuardia’s Terminal D, snacking at New York hotspots like Dylan’s Candy Bar and Baked by Melissa at JFK’s Terminal 5, and will soon be plugging into one of 10,000 outlets coming to Newark’s Terminal C.

These changes are largely being executed by OTG Management, a restauranteur that made the jump from nightclubs to terminals in 1996 and today manages restaurants and retails outlets in ten airports across the United States.

Terminal Transformation

JetBlue Airways was the first airline to revamp its New York City terminal with the help of OTG, although the carrier had been working with the vendor since 2003. OTG was hired to oversee the food and beverage concessions space in what has become a role model for other area terminals.

Brian Holtman, JetBlue’s manager of concessions, joined the airline in 2010 and credits the success of OTG’s concept to their unique technological approach.

“They have been very innovative with the technology piece of the concept and they’re pushing the industry to be more innovative all around,” says Holtman who is charge of leasing and business development for T5.

He says the airport measures the impact of such food and beverage changes through social media feedback, sales, and flyers’ demeanor around there terminal.

Delta Air Lines, looking to update its antiquated terminal at LaGuardia, was the next airline to take the plunge in 2012.

“We recognized the fact that if we were really wanted to become the airline of choice in New York then we really needed to focus on the airport experience,” says Gail Grimmett, senior vice president at Delta Air Lines.

“We knew that the experience we had an LaGuardia wasn’t what we wanted to give our customers.”

The most noticeable changes — bar-style tables with power outlets and iPads — were paid for by OTG. The new experience caused a double-digit increase in food and beverage sales, according to a Wall Street Journal article published at the time.

In addition to laying out the initial investment, OTG chooses, staffs, and manages the restaurants.

United Airlines was the latest airline to announce a terminal overhaul. The airline’s $120 million makeover of Terminal C at Newark Liberty International will include food options from 24 chefs as well as a whiskey bar and beer garden. OTG will oversee the transformation, which includes almost 6,000 iPads that travelers can use to order food and drink.

United executives considered several potential vendors before settling on OTG for its “innovative track record, design capabilities and the ability to deliver comfort and high-tech amenities for our passengers,” according to a United spokesperson.

Partiers to Business Travelers

OTG CEO Rick Blatstein started his career creating nightclub experiences and made his first foray into airports in Philadelphia International Airport in 1996. During a storm that winter, Blatstein realized the weather that hurt his nightclub business actually fueled sales at airports where a much more reliable customer base was looking for better food and drink options.

Today OTG works with ten airports, including the three largest in New York, and has plans to expand to major markets throughout the U.S. and abroad. OTG has found a model –creative culinary concepts and iPad technology– that works and deploys similar solutions throughout its several terminals.

Images of OTG’s restaurants can sometimes look like a dystopian future with iPads in front of every setting, even those in which two passengers could theoretically face one another. Flyers’ adoption of the technology; however, has been swift and informed OTG’s restaurant strategies.

“The customers came in, sat down, plugged in and ordered like they’ve been doing this for the past 100 years,” Blatstein told Skift in describing the first time they installed the concept at JFK Terminal 3.

“If you look at our technology on our iPads, we’re learning so much about our customers. It’s unbelievable. If you’re flying to Orlando at 5 pm on Wednesday, we know what most people will order and we know how to adjust the menu at those times.”

In addition to the technology, the choice of restaurants is increasing sales. Travelers today are more interested in BRKLYN Beer Garden and Vuelo Taqueria than Dunkin Donuts and McDonald’s.

Other Players

OTG; however successful at curating a mix of tech and taste, is just one of several players in the market.

The Port Authority chose MarketPlace, a real estate development firm specializing in airport retail, in 1993 for redevelopment of Terminal B at LaGuardia Airport and Westfield Corporation, an Australian shopping center company,for Newark’s Terminals A and B in September 2007. Westfield also created the shopping and dining experience at American Airlines’ JFK Terminal 8.

JFKIAT, a partly-owned subsidiary of Schiphol USA, is in a unique position as the organization in charge of JFK Terminal 4, the airport’s only non-airline, privately-owned terminal, and one of the region’s best.

Port Authority’s Role

It’s not a coincidence that the Port Authority of New York and New Jersey does not operate any of the terminals that OTG has worked on.

Each of the airlines discussed above operate the terminals that they’ve help to transform; however, the Port Authority still plays in an integral in all changes.

“Depending on the airport and concessionaires, there are different organizations, including the Port Authority, who manage it,” explains a Port Authority spokesperson.

The Port Authority has lease agreements with each airline and terminal operator who in turn have the option to manage their concessions programs or hire a separate operator like OTG, MarketPlace, and Westfield. And it’s important to note that the terminals most praised by travelers and critics are the ones that the Port Authority has the least involvement in.

“We work in tandem with the Port Authority,” says Delta’s Grimmet. “We could not be prouder of the terminal, but that was up to us, in our work with the Port Authority, to find a solution that fits all of our needs. They still have some control over what we want to do.”

The Port Authority approves the entire process starting at vendor selection.