Airport Experience® News - Retail & Services Issue 2025

“Often times, when you look at specific lighting or tile or things like that, we’re just going to be limited to fewer options, many of which are less quality or don’t have the same design impact,” Allen says. Peterson says the company at times has to eliminate Canadian or Mexican imports due to significant tariffs. “I used to source it from Mexico and now we can’t because at 15% to 18% tariff has suddenly pushed that number over. You’re not seeing the impact but it’s surely to come,” Peterson says. Projects are still taking place, Nair adds, but there is more education of clients. Some can’t be put off, such as terminal alterations at smaller airports where the size of jets flying in and out have changed, he adds. When projects are moving forward, the airports are putting in greater contingencies than in the past. Or, Peterson says, they may plan for a full terminal but defer a handful of gates until later. “You start adding those things up and regardless of whether prices may be going up, airports in many instances are just having to decide they’re going to prioritize to do it,” he says. And airports have taken note: Joseph Nardone, president and CEO of the Columbus Regional Airport Authority, announced in April at a civic event that tariffs would not defer work on a new $1.89 billion terminal at John Glenn Columbus International Airport (CMH) but could make the project more expensive. “We have some uncertainty right now, which is not going to threaten our project because we have a team that is extraordinarily committed to delivering this terminal,” said Nardone, who has since announced he’ll retire. “But it could affect the budget.” San Francisco International Airport (SFO) has more than 50% of its capital plan projects, including those for its Terminal 3 East expansion, under contract, “which reduces our exposure to such market volatility,” says spokesman Doug Yakel. But tariffs and increasing costs are something airport staff are monitoring. “Other mitigation includes early procurement of scope and long lead items, investigating the use of alternative products and setting aside reserves as a contingency to cover potential cost increases,” he says. The city of Austin, Texas has some significant projects underway, including

the multi-billion expansion of Austin Bergstrom International Airport (AUS). As of March, the airport hadn’t scaled back plans that were underway and scheduled to continue for years, according to the Austin Business Journal. The airport was, however, “closely monitoring the new executive orders and their potential impact on the costs and delivery timelines for our “Journey With AUS Expansion Program,” according to a spokesperson who indicated AUS was working on alternative materials and sourcing options. Market Report The Q3 Construction Economy Report published by MOCA Systems, a consulting and management partner for construction projects, indicates: • Steel and aluminum prices are up 8.8% year over year; overall construction ma terials rose 4.3% • As inventories thin, up to 1.5% of infla tion is tied directly to tariffs • Financing is tight, with long-term yields constraining new starts • And labor shortages, driven by retire ments outpacing new entrants into the workforce, persist Those factors aren’t specific to airports, but airport industry construction is heavily reliant on many of the materials where costs are rising, says Brandon Michalski, principal and construction economist for MOCA Systems Inc. Additionally, under the Trump administration, many federally funded

Above: More than half of SFO’s current capital projects, including its Terminal 3 East expansion, are under contract, which reduces exposure to volatility. But the airport is investigating alternative products and creating a reserve fund for potential cost increases.

projects funded through infrastructure investment passed during the Biden administration were paused. For projects underway, that causes cost increases for projects that were in progress where “keeping everyone around costs money,” he says. Others were canceled, as the Trump administration shifted focus away from terminal enhancements and expansions and toward airport modernization and air traffic controlling. How tariffs affect those, Michalski says, is up in the air, but they typically involve steel, aluminum, glass, terrazzo flooring and concrete. “It depends on what the project involves, but ultimately tariff impacts are going to be baked into projects that are going to be 2026 and beyond,” he says. Decreasing Choices, Creative Reuse? Though the worst may be to come, designers and contractors have taken notice. Michele Larimer, director of projects with design and architecture firm Silhouette Design Architecture , says she doesn’t see any end to the continuing increase in airport design and construction costs.

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AX NEWS SEPTEMBER 2025