Airports Make Case to Congress for Higher Passenger Fees
Airport officials tell lawmakers they need permission to levy higher fees on passengers in order to fund much-needed upgrades.
Airport officials urged federal lawmakers to raise a cap on the fees they're allowed to levy on passengers at the first major Congressional hearing focused on the next aviation bill.
In testimony before the U.S. House's aviation subcommittee, airport officials said they want Congress to raise the cap on Passenger Facility Charges to $8.50, up from the current cap of $4.50. PFCs are a valuable source of revenue for airports, since the money is raised locally and isn't tied to the whims of Congress. But Washington has retained the power to set the cap on the fee.
Airports are urging to Congress to raise that cap -- which hasn't been increased since 2000 --- so that they'll have the power to generate more funds locally for infrastructure upgrades at a time when federal money is drying up.
"(I)t's time for Congress to revisit this issue and provide airports with the self-help they need to finance critical infrastructure projects," said Mark Brewer, director of the Manchester-Boston Regional Airport and chair of the American Association of Airport Executives, in his testimony.
Brewer's remarks came at one of the first hearings examining the issues and controversies that will likely be debated as the next aviation bill is developed. Congress enacted the current aviation bill enacted last year following 23 extensions and five years of delay. It expires at the end of FY 2015, and lawmakers have emphasized they don't want a repeat of the uncertainty that previously mired the legislation.
For airport officials, the fight for a PFC hike comes on the heels of what they see as a threat to existing federal revenue sources.The current Federal Aviation Administration bill authorizes $3.35 billion annually for the Airport Improvement Program, the major source of funds for airport infrastructure. That's down from $3.515 billion Congress appropriated in FY 2011.
As a result of the federal shutdown, Congress reduced that total even further, diverting $253 million of AIP money to FAA operations to prevent a mess of canceled and delayed flights. But that move furthered reduced the total amount of federal funding for airport infrastructure.
Brewer said the "precedent of diverting limited capital dollars to FAA operations" is concerning and argued that if Congress won't give airports more federal funding, it should at least empower airports to generate more funding on their own.
Still, commercial airports -- typically divisions of state and local governments -- will face a major hurdle in raising the PFC caps. The airline industry vehemently opposes the move because the fees increase the total cost of a ticket, which airlines fear will be bad for business.
"Airlines and the passengers are already taxed too much," testified Nicholas Calio, president and CEO of the Airlines for America trade group, in response to questions from lawmakers about higher PFCs.
"We don't think there is a demonstrated need for the increase, and I think if you're going to consider an increase, you have to look at the impact on airlines and on airline passengers," he continued.
Brewer said passenger levels at U.S. airports are expected to jump more than 50 percent in the next 20 years. A separate airport trade group, the Airports Council International - North America, estimates airports have $71.3 billion in capital needs over the next five years.