Nearly doubling the Passenger Facility Charge (PFC) cap to $8.50 in next year’s FAA reauthorization bill is a top priority for US airports.
FAA is authorized through Sept. 30, 2015; the agency’s reauthorization is expected to be the biggest aviation public policy debate in Washington DC next year. US airports are currently allowed to impose a maximum $4.50 PFC fee per flight segment on tickets after gaining approval from FAA for a targeted construction project. The $4.50 cap was set in 2000.
“The only way to get back our purchasing power that we had 14, 15 years ago is to raise it to $8.50,” Seattle-Tacoma International Airport MD and Airports Council International-North America (ACI-NA) chairman Mark Reis told reporters at the ACI-NA Conference and Exhibition in Atlanta this week.
Airlines have long argued that the PFC is a tax on passengers and have successfully lobbied Congress to keep the cap at $4.50. Speaking recently at the Boyd Group International Aviation Forecast Summit in Las Vegas, Airlines for America (A4A) president and CEO Nicholas Calio said airlines remain strongly opposed to any PFC increase “because we think the airports have ample money” to finance construction projects. He said adding $4 to the cap would “do nothing but depress demand” for airline tickets.
ACI-NA president and CEO Kevin Burke told ATW in Atlanta this week it is “ridiculous” to assert a $4 increase in the PFC cap would affect passenger demand.
Reis added, “Airlines have been up there [on Capitol Hill] calling it a tax for years, but there are a lot of new members of Congress who haven’t been influenced by airline rhetoric … We’re going to be much more aggressive in telling the story of what the PFC is and what it isn’t.”
FAA associate administrator-airports Eduardo Angeles told the ACI-NA conference the agency is “not necessarily advocating for one position or another. However, [President Barack Obama’s proposed] budget … takes the PFC [cap] up to $8.”
Republican members of Congress have generally been opposed to raising the PFC cap, often agreeing with airlines that it would amount to a tax increase. Burke, who became ACI-NA president and CEO in January after nearly 13 years as the CEO of the American Apparel and Footwear Association, is new to the Congressional debate over airport project financing and said airports need to recalibrate their message regarding the PFC, especially to Republicans.
“Our goal is $8.50,” Burke said. “I have to be optimistic. In terms of convincing Republicans, the way we message this … is [the PFC is] all money that stays in the airport. It does not go into any federal regulatory agency.”
Reis added that airports have to convince Republicans that the PFC issue is about “local control, local money that stays local” rather than being about taxes. “We’ve got members of Congress who seek to make [the PFC] an issue not about airports, not about facilities … but about their particular political agenda, which is less government and less taxes,” he said.