DALLAS – The current level of federal funding for airport infrastructure projects will provide only half of the $32 billion needed over the next five years to reduce runway congestion and improve safety, the American Road & Transportation Builders Association said, citing an analysis of data from the Federal Aviation Administration.

Airports have identified $32.4 billion of infrastructure projects over the next five years but available federal funding sources will cover only half of the cost.
Airports have identified $32.4 billion of infrastructure projects over the next five years but available federal funding sources will cover only half of the cost. San Francisco International Airport

Airports eligible for the FAA grants have identified $6.5 billion per year of infrastructure needs from the program that provided $3.29 billion to almost 1,400 airports in 2016, according to the analysis by Dr. Alison Premo Black, ARTBA’s chief economist.

Airports used 68% of the FAA grants for infrastructure improvements last year, she said, including the construction and maintenance of taxiways, runways, and airport access roads.

Part of the solution would be to raise the federally authorized passenger facility charge (PFC), which has been capped at $4.50 per flight segment and a maximum of $18 per connecting round trip since 2000, Black said. Each of the 338 eligible U.S. airports sets a fee of up to $4.50, which is collected by the airlines and distributed by them to the airports.

“These types of projects and other airport infrastructure needs can be addressed by increasing Airport Improvement Program investment—which has be held flat for the past six years—and increasing or lifting the cap on the passenger facility charge,” Black says. “We think both are needed and needed now.”

A report by the Airports Council International-North America in March said it would take about $100 billion over the next five years to make all the necessary infrastructure improvements at U.S. airports, including projects that qualify for FAA grants.

Two bills to reauthorize the FAA being considered this week by congressional committees would provide increases to the FAA’s Airport Improvement Program, which was funded at $3.35 billion in the fiscal 2017 omnibus budget measure. Neither bill would raise the current cap, but the Senate committee’s proposal would require a study by the FAA of the PFC with recommendations on upgrading and restoring airport infrastructure.

The bill (S. 1405) introduced by members of the Senate Committee on Commerce, Science, and Transportation would raise the airport grant funding by 9% a year for four years, while the six-year proposal (HR 2997) from Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, calls for an 8% per year boost for six years.

It’s a good thing that the FAA reauthorization bills do not raise the PFC, said Nicholas E. Calio, president of the airline trade association Airlines for America.

A higher PFC would put an intolerable burden on the backs of airline passengers, Calio said, noting that airports are “flush with cash and have plenty of money to fund capital improvement projects without taxing passengers.”

Airlines invested more than $17.5 billion in 2016 for airport improvements that include new terminals and runways, he said.

Airports want a higher PFC because the fees help support revenue bonds that fund terminals, runways, and other improvements, said Todd Hauptli, president of the American Association of Airport Executives.

Airlines that want to keep the current PFC cap collected more than $1 billion in baggage fees in the first quarter of 2017, Hauptli said, citing data from the FAA.

Airlines have generated more than $30 billion in baggage fees and $23.7 billion in ticket change and cancellation fees since 2008, Hauptli said, while the PFC brings in about $3 billion per year.

“PFC revenues build facilities that enhance the passenger experience at airports,” he said. “Where are these ‘billions and billions’ of bag fee dollars going?”

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