Airport executives are accusing airlines of being hypocritical, claiming they are arguing against airports increasing passenger facility charges while collecting increased revenue from fees for baggage and other amenities.
The dispute led representatives of both groups, in interviews yesterday, to accuse each other of being greedy for fee revenues.
Airports currently are authorized to collect passenger facility charges of up to $4.50 and can use the PFCs to repay their bonds.
Groups representing airports have campaigned for raising the PFC cap to as much as $7.50, which the Federal Aviation Administration says would generate an estimated $1.3 billion per year.
The groups say that rising construction costs and slumping levels of passenger traffic is putting financial stress on their members, and a PFC cap increase is necessary to pay for capital projects.
A PFC hike has been legislatively proposed before, but has never been approved by Congress.
The current aviation and airport law is in a holding pattern. Lawmakers have only been able to agree on stopgap measures to keep existing programs in place, but not to make major changes like a PFC increase.
So when the U.S. Department of Transportation’s Bureau of Transportation Statistics released data earlier this week showing that airline fee collections grew last year, the American Association of Airport Executives responded with incredulity.
“With nearly $8 billion collected by the airlines in fees in 2009, it’s difficult to understand why the industry opposes the collection of a mere fraction of that amount by local authorities to fund critical airport safety, security, and capacity improvements,” said AAAE president Chip Barclay.
The data showed the airline industry collected $7.8 billion from ancillary fees in 2009, up from $5.5 billion in 2008, for services such as checked baggage, reservation changes, and pet transportation.
The industry collected at least $1.9 billion from ancillary fees in the fourth quarter of 2009, an increase of about 18% over the fourth quarter of 2008, the bureau said.
The amount collected from baggage fees last year — $2.7 billion — was “more than double the amount that airports would collect from [increased] PFCs,” said Brad Van Dam, spokesman for the AAAE. “It seems a little hypocritical from our perspective.”
The fees made up about 6.5% of the total revenue of 32 air carriers that reported collecting them, according to the bureau. Delta Air Lines collected the largest dollar amount, while Spirit Airlines collected the largest proportion — about one-fifth of its operating revenue from fees during the quarter.
The data also showed that network airlines took a loss in the fourth quarter, following a profitable third quarter, while discount and regional airlines managed to come away from the quarter with operating profits.
Lost revenue from ticket sales and other factors such as higher fuel costs are the reason for the fees, and that makes the fees necessary to sustain airlines, countered Dave Castelveter, spokesperson for Air Transport Association, an airline industry group.
Airlines will record a “multibillion-dollar loss in the first quarter of 2010,” he said. “I don’t see the airports having those kinds of financial crises.”