Increased Passenger Facility Charge cap totally unnecessary, say consumer advocates

Passenger facility charges (PFCs) — collected via airline tickets — should not be increased to help airports finance their capital improvement projects at the expense of American travelers who already are weary of government-mandated taxes, say advocates on behalf of the traveling public.

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“Currently, consumers pay more taxes for the pleasure of flying than for almost any other activity in the country,” Charles Leocha, chairman of Travelers United, told Transportation Today in emailed remarks. “Taxes on passengers are extraordinary.”

Commercial airports controlled by public agencies began imposing PFCs in 1992. By law PFCs can fund only federally approved capital-improvement projects “that enhance safety, security, or capacity; reduce noise; or increase air carrier competition.” The Federal Aviation Administration’s (FAA) PFC cap of $4.50 was set in 2001 and hasn’t been changed since that time.

But the number of taxes passengers must pay certainly has changed.

“Every passenger on a one-stop, round-trip flight has to fork over $11.20 for the TSA Security Fee. Passengers then pay a $4.50 PFC for each takeoff or landing. This adds up to $18 for a connecting round-trip flight. In addition, a U.S. Federal Segment Fee adds $4 to every take-off on a domestic flight — $16 for a connecting round-trip flight,” Leocha explained. “Today, passengers are paying $45.20 even before they have to pay the 7.5 percent transportation excise tax that is included in the airfare.”

The current PFC cap is $4.50 per boarding, but airports want the federal cap removed so they can charge passengers whatever they deem necessary for facility upgrades and FAA-approved infrastructure improvement projects.

In June, two airport groups, the American Association of Airport Executives and Airports Council International-North America, sent a joint letter to the White House asking U.S. President Donald Trump to raise the PFC to $8.50 per ticket. They say such a move would make them less dependent on the U.S. government and spur private-sector investment, suggestions the airports also said are “directly consistent” with Trump’s $1 trillion national infrastructure plan contained in his 2018 budget blueprint. While Trump did not include such a PFC cap increase in his proposal, he does support spinning off the nation’s air traffic control system from the FAA to make modernization happen more swiftly.

Leocha said that if the airports got their way, passengers would pay $32 in PFCs for every one-stop round-trip.

“Travelers United has heard advocates for the tax increase say, ‘It’s only a small increase in tax.’ However, that assumes flights are all one way. Since most travelers like to come home, this means the fee is doubled,” he pointed out.

And since most flights on network carriers aren’t non-stop, the PFC increase could total a $14 increase when one-stop and a round-trip are involved, Leocha added. “If legislators think about a family of four, the increase is $56, a serious chunk of change for the average American family.”

Travelers United, which rejects any need for any increase in government taxes and fees that fall on air travelers, supports other stakeholders—including localities, real estate investments and businesses—paying their share because “passengers are already paying more than their fair share,” said Leocha.

The airline industry agrees and has repeatedly stipulated that increasing passenger fees to finance airport projects would fuel travelers’ tax fury and push them over the edge.

Nevertheless, some bipartisan support exists in Congress to increase the PFC cap.

U.S. Sen. Susan Collins, R-Maine, chairwoman of the Senate Appropriations Committee’s Transportation, Housing and Urban Development (THUD) Subcommittee, last month told reporters that she thinks the PFC increase will get approved as part of S. 1655, which is the Senate’s fiscal year 2018 spending bill for the U.S. Department of Transportation, the Department of Housing and Urban Development, and other agencies.

Collins said she would consider reexamining the PFC cap increase as part of the appropriations bill and that there had been “no objection in [full] committee,” which passed the bill, as did THUD.

Leocha said that the PFCs have been part of the FAA reauthorization bill for years and handled by the Senate Commerce Committee and the House Transportation and Infrastructure Committee.

“We have worked carefully with both groups over the past two FAA bills and have stopped any increase in PFCs,” said Leocha. “This year, Sen. Susan Collins of Maine decided to take up the PFCs in the Appropriations Committee, [which] … has no history of dealing with the PFCs and the deliberations were virtually in secret. This was a coup engineered by insiders to circumvent the Senate Commerce and House T&I committees.”

In fact, he added, the House Appropriations Committee hasn’t yet had a chance to really look at the PFC question.

Airlines have come out against the PFC proposal in S. 1655 that would allow for a new cap of $8.50, though Collins told reporters that she was “certainly willing to take a look” at it if it’s too high.

“I just hope that when she does examine this item, that she’ll keep the state of Maine, its families, businesses, residents and travelers in mind,” said Cara McCormick, spokeswoman for Maine Citizens for On Time Flights.

“We don’t need higher airline ticket prices in Maine,” McCormick told Transportation Today. “We need air travel at reasonable rates.”

Maine, which is trying to grow its economy by increasing tourism, is an expensive place to live, do business in and fly in and out of, McCormick said.

“Doubling the ticket tax makes absolutely no sense for our state,” she said.

Leocha said Travelers United understands why chambers of commerce and local tourism officials might support the PFC increase; “it is free money for them to pour into local jobs. But, for passengers taking off and landing at those airports it is an unfair subsidy and an unnecessary one,” he said.

Additionally, McCormick said that “raising the PFCs would be completely unnecessary” in Maine because “we have a beautiful, brand-spanking-new airport in Portland. So clearly why would we need to make the PFC higher to pay for new airport infrastructure?”

And besides, said Leocha, “for all of the weeping and wailing about the need for more taxes, Travelers United found an airport financial ecosystem flush with cash.”

Unlike the nation’s highway systems, which are in need of vast repairs, he called the U.S. airport system state-of-the-art.

“Airports are fancy architectural masterpieces with massive road and rail access, surrounded by millions of dollars of commercial buildings, warehouses and freight handler offices that pay plenty of taxes, just not directly to airports,” said Leocha.