WASHINGTON — Passenger facility charges have become a key source for securing debt used to build and maintain airport infrastructure, and that role is likely to continue to grow, according to a new report from Fitch Ratings.

PFCs are a per-passenger fees collected from passengers by the airlines on behalf of the airports. PFCs have been federally capped at $4.50 since 2000, despite airport lobbying to raise or eliminate the cap in order to offset inflation.

Although Congress did not change the cap during the February reauthorization of the Federal Aviation Administration, the Fitch report shows that PFCs have resulted in some $36 billion dollars flowing to 356 U.S. airports since they became authorized by the Aviation Safety Capacity and Expansion Act of 1990.

“Due to their flexibility and broad scope, PFCs are an integral part of the funding landscape for airport capital development,” the Fitch report states. “PFCs, together with general airport revenue/special facility bonds, and [airport improvement program] grants, comprise the three major funding sources for airport capital projects.”

PFCs account for just under 25% of airport capital projects projected through 2015, but actually play a much larger role by backing bonds. While smaller airports often use the fees in a “pay as you go” structure for less expensive projects, larger airports generally leverage PFC dollars to secure bond financing.

Together, PFCs and bonds account for more than 60% of airport projects, according to data from an Airports Council International-North America survey for 2011-2015.

“Compared with the ACI-NA 2009-2013 survey, the more recent results indicate a trend of increasing use of PFCs and revenue bonds as a share of total funding,” the Fitch report said.

“Comparatively, airport improvement program and state-local funding have fallen by 6% and 9%, respectively, over the same period. In Fitch’s view, the comparison of these two surveys demonstrates a greater likelihood of overall airport leverage going forward.”

Most airports that Fitch rates use PFCs in combination with general airport revenues to back bonds, but there are notable exceptions. Chicago O’Hare International Airport has about $778 million in outstanding debt secured solely by PFC revenues. Broward County, Fla., has $321 million outstanding.

O’Hare is one of six airports busy enough to collect upwards of $100 million in PFC fees annually, the report states. The others are the Port Authority of New York-New Jersey, Atlanta International Airport, Los Angeles International Airport, Dallas-Forth Worth International Airport and Denver International Airport.

Although the passenger facility charges play such a big role in airport finance, Fitch views PFC-backed bonds as having some significant risks and most such Fitch-rated securities are in the A or BBB range.

“PFC collections are directly linked to passenger traffic and may be more volatile than general airport revenues as a result,” the report said. “PFC collection is viewed as more predictable over time at airports that have a proven and resilient base of passenger activity, depend largely on their origination-destination segment of traffic, and have a diverse carrier mix. PFC receipts are seen as riskier at hub airports, those with elevated single-carrier dependency, or markets with volatile traffic trends or optimistic forecasts.”

Jane Calderwood, ACI-NA vice president for government and political affairs, said PFCs are hugely important but present problems for airports, since bonding against uncertain future revenue could lead to a need for charging higher fees to carriers. “They don’t want to do that, especially these days,” she said.

The PFC cap is unlikely to go away before 2015, when a new FAA law will be required, Calderwood said, but airports will continue to push for it.

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