The top priority of the airport industry for the past several months and even years has been to secure an increase in the federally mandated cap on the passenger facility charge.
The industry’s top priority going forward will be that same goal.
With inaction from Congress on a Federal Aviation Administration reauthorization bill, the battle for a higher PFC cap will wage well into the autumn and likely into next year.
“We’ve got to keep going. We need this,” says Christina Cassotis, CEO of the Allegheny County Airport Authority, echoing the sentiments of many in the industry. “To me, this is a delay. The path forward is to readjust and keep pushing.”
The U.S. airport industry is facing an estimated $75.5 billion in infrastructure investment needs between 2015 and 2019, according to Airports Council International-North America. The current funding stream will address only a portion of those needs, prompting the airport industry to redouble its efforts to win a PFC cap increase.
PFCs are capped at $4.50 per flight segment with a maximum of two PFCs charged on a one-way trip or four PFCs on a round trip. The airport industry is pushing for a cap of $8.50, with inflation indexing going forward. The Obama administration has proposed increasing the PFC to $8 as part of its fiscal 2016 budget.
On the flip side, airline groups have presented a counter-argument that is resonating with some members of Congress. They claim the PFC is essentially a tax and say there is no justification for increasing it because of the strong financial condition of U.S. airports.
A Fortuitous Delay?
Although it is all but certain there will be no passage of a long-term funding bill for the FAA before the Sept. 30 deadline, one positive spin is that it gives the industry more time to make its case, airport executives say.
“We’re gaining some ground,” notes Jeff Mulder, airports director for the Tulsa Airport Improvement Trust and chairman of the American Association of Airport Executives. “I think [the lack of a bill over the summer] benefits us because I don’t think we had gained enough ground that we were going to see language in the bill to raise the PFC.”
There is “still hope,” agrees Rhonda Hamm-Niebruegge, director of airports at Lambert-St. Louis International (STL), although she acknowledges that an increase currently doesn’t have enough support in Congress to pass.
“We just have to keep pushing the message that this isn’t about spending frivolous dollars building stuff that’s not needed,” she says.
Steven Grossman, CEO of the Jacksonville Aviation Authority, says it’s crucial that the airport industry take the time to get it right.
The full article appears in the September print issue of Airport Revenue News. Click Here to subscribe.
