A bipartisan pair of lawmakers is pushing for an increase in the passenger facility charge, which backs bonds for projects such as airport terminals, and hasn’t been raised in over 20 years.
On Wednesday, Reps. Earl Blumenauer, D-Ore., and Mark Amodei, R-Nev., introduced the Rebuilding America’s Airport Infrastructure Act, which would increase the PFC by one dollar a year starting in 2023, for four years, then indexes the fee to inflation every year thereafter.
“This increase to $8.50 by 2026 would restore the value of the PFC to when it was last increased in 2000,” Blumenauer’s office said. “Modernizing the PFC would raise tens of billions of dollars for airport infrastructure improvements while requiring zero taxpayer dollars, not increasing the national debt, and adding billions of dollars to U.S. Gross Domestic Product.”
The PFC, a per-passenger charge collected as part of the price of an airline ticket, has been capped at $4.50 since 2000. There is not a Senate companion bill.
In the past, airlines have opposed increasing the PFC, saying it will decrease demand for air travel by increasing ticket prices. Airports, on the other hand, have consistently made uncapping or increasing the cap on the PFC one of their top lobbying priorities.
“We support the industry’s position on adjusting the PFC; it is long overdue,” said Candace McGraw, CEO of the Cincinnati/Northern Kentucky International Airport. “Aging airport infrastructure must be addressed. We’re pleased that investment in infrastructure continues to receive support in Washington.”
Airports Council International - North America said investments in aviation infrastructure were crucial to help airports recover from the pandemic.
Airport infrastructure has been underfunded for years, which has created a backlog of at least $115 billion in planned and needed projects over the next five years, said ACI CEO and President Kevin Burke.
“Giving airports the ability to adjust their user fees – which has not happened in more than 20 years – would allow them to be responsive to local circumstances and travel trends,” Burke said. “User fees also have a great multiplier effect by opening better access to vital capital in the bond market. Getting to work on these critical infrastructure projects could yield immediate benefits for local economies around the country, which would be a big win for passengers and the hundreds of American communities that depend on airports for economic growth.”
In a March report, ACI found that U.S. airports were expected to lose at least $40 billion through March 2022 because of the pandemic. Each dollar invested in airport infrastructure would produce up to $2.50 in economic growth, the group said.
Raising the PFC would be the best way to fund airports, Burke said in the report. Airports have four other major sources of financing for infrastructure projects, besides the PFC — the federal Airport Improvement Program, bonds and other forms of debt, state and local grants and airport operating revenue from tenant leases and other revenue-generating sources. The largest source of revenue is AIP, but that can’t be used to cover new terminals, gates or air filtration systems, ACI said.
Municipal bonds have been an important part of financing, but the bill would solve the funding problem, said Annie Russo, ACI’s senior vice president of government and political affairs. Raising the PFC would help pay back the bonds to leverage more of them, Russo added.
“We’re going to push for a companion bill in the Senate and work to get as many House cosponsors as possible to try to take advantage of the upcoming infrastructure debate,” Russo said. “Increasing the PFC remains a priority for the airport industry so we’ll take advantage of any possibility that we can.”
