At a hearing last week before the House Aviation Subcommittee on the future of airport infrastructure development, American Association of Airport Executives (AAAE) President and CEO Todd Hauptli (Shown at right), called on Congress to give airports additional local authority to address pressing infrastructure needs by increasing the arbitrary federal cap on local passenger facility charges (PFCs) that has been locked at the same $4.50 level since 2000.
“As is abundantly evident to travelers and to anyone who has taken a hard look at the forecasts for future growth, the nation’s airports require significant investment to meet growing passenger levels and the increased demands being placed on already crowded airport facilities,” Hauptli said. “A number of airports are bursting at the seams in terminals and on tarmacs, while others are struggling to update facilities that were developed and constructed at the dawn of the jet age. These problems are only going to get worse as time passes and traffic levels rise.”
AAAE and other airport groups are advocating for an increase in the federal cap on local PFCs to $8.50 with periodic adjustments for inflation. The current federal PFC cap of $4.50 was last adjusted by Congress in 2000. The purchasing power of the PFC has dwindled significantly to less than $2.50 over the intervening years. In order to keep up with construction cost inflation, it is necessary to raise the PFC cap to $8.50.
“In the absence of increased federal support — which we all recognize is unlikely given budget constraints — the only realistic opportunity that exists to address the airport infrastructure development gap aside from the assumption of significantly more debt is to give airports the self-help they need by adjusting the federal cap on local PFCs,” Hauptli said. “PFCs are not taxes; they are local fees that are determined locally, justified locally, and spent locally to help airports build for the future. It’s time for the federal government to free airports from an artificial constraint last addressed by Congress when Bill Clinton was in the White House.”
Hauptli acknowledged airline industry opposition to a PFC increase, but called on lawmakers to look at the long-term interests of the country rather than the 90-day window to the next quarterly report that drives airline policy formulation.
“We recognize that a proposed increase in local PFCs is strongly opposed by the airlines, who inexplicably contend that infrastructure needs are being met and that an extra $4 in fees would significantly decrease demand for air travel – an interesting claim to make given the $3.35 billion in baggage fees that the carriers collect on an annual basis,” Hauptli said.
He added, “Airports have an obligation to the communities they serve to look out over the horizon a decade or longer to ensure that all facilities are up to standards and adequate to serve the traffic and demand that is expected to occur. We need decision-makers in Washington to take the same long-term approach and reject short-sighted arguments that good enough for now is good enough.”