WASHINGTON - An increase to the passenger facilities charge that would fill airport coffers with more than $1 billion dollars in additional revenue each year could be included in a long-delayed aviation bill, but a House-proposed 55% increase may be unlikely because of political obstacles in the Senate, congressional staffers said Friday.
Airports use the passenger facilities charges, or PFCs, to back airport bonds. A bill to reauthorize the Federal Aviation Administration's funding that includes an increase of PFCs to $7 from $4.50 was approved by the House Transportation and Infrastructure Committee earlier this month but faces significant hurdles in the Senate, where Republican opposition prevented passage of a reauthorization bill last year. The FAA has been funded for two years by short-term extensions as a result of fighting over issues including the PFC provision.
"In the final bill, there's a chance" for an increase of the PFC cap, said James Reid, an aviation subcommittee Democratic staffer for the Senate Commerce Committee. But there are Republican members in the Senate who oppose an additional tax on air travel, he said, speaking Friday along with other congressional staffers at a conference here hosted by the American Association of Airport Executives and Airports Council International-North America.
The amount of the increase could be smaller than what is included in the House legislation if the Senate version has no PFC increase, because of compromises between Senate and House versions, an airport lobbyist said.
Reid said the Obama administration will probably have input. The forthcoming White House budget is expected to have at least some principles laid out for the aviation reauthorization, he said.
Arguments that could persuade Republicans, at least in the House, to support a PFC increase are that the charge would create jobs, and that airlines at the local level are "very supportive" of the fee increase, said Holly Woodruff Lyons, a Republican aide for the House Transportation and Infrastructure Committee that approved the bill with a PFC increase.
Since the early 1990s, airports have been able to add PFCs to passenger ticket prices and use those revenues to help pay for capital development projects. In the late 1990s, when PFCs were capped at $3, the Government Accountability Office said airports were pulling in about $1.4 billion annually from the charges. The cap was raised to $4.50 about a decade ago, but airport lobbyists and other groups including the U.S. Conference of Mayors have been pushing for the cap to be raised again to as much as $7.50 and indexed to inflation.
The GAO estimated that increasing the cap to $6 under a previous, failed version of the FAA reauthorization would have allowed larger airports to increase revenues by about $1.1 billion in 2007.
But airline lobbyists are pushing from the other side, arguing that the extra $2.50 or $3 increase could bring fees to a total of one-third of a ticket price if the PFCs were levied for each segment of a trip.
"With airport revenue eclipsing record levels - over $12.7 billion in 2007 - and with $27 billion in unrestricted financial assets, the imposition of an increased PFC tax is not only unwarranted, but will also further reduce demand for travel," the Air Transport Association said in a letter to House Transportation and Infrastructure Committee leaders earlier this month.
House Transportation and Infrastructure Committee aide Giles Giovinazzi, a Democrat, said at Friday's meeting that he expects "an intense floor fight" on the PFC increase and believes that airlines will come out strong in the battle.