Industry Strongly Opposes A Proposal To Increase Airport Taxes Nearly 90 Percent

Airlines for America (A4A), the industry trade organization for the U.S. airlines, has released a letter from leading passenger airline CEOs urging House and Senate leadership to oppose an increase in the current Passenger Facility Charge (PFC), or the airport tax.

“Unfortunately, many of our airport partners are advocating for a historic tax hike on the traveling public through a nearly 90 percent increase in the PFC airport tax,” states the letter from the A4A Board of Directors members who are CEOs of the major U.S. passenger airlines. “This is simply not necessary as significant airline investments combined with airports’ resources and funding streams provide airports with the funds for improvement projects needed today and in the future. Airlines and airports have a history of partnering on significant improvements. Since 2008, over $70 billion of capital projects have been completed, are underway or approved at the nation’s 30 largest airports alone, and development is robust at smaller airports across the country as well.”

Because of this partnership, their mutual support for airport capital improvements, and the existence of airports’ resources and funding streams, the Board of Directors’ letter highlighted that the increase in the PFC being advocated for by many airports is not necessary.

Today, federal taxes constitute 21 percent, or $63, of a typical domestic one-stop, round-trip ticket. If the airports get their tax increase, a family of four taking one round trip could pay up to $136 just in airport taxes. That’s $64 more taken directly out of the pockets of American families.

“The proposed increase in the PFC is just another tax increase that the government is trying to force on consumers who already pay too much in taxes when they fly. Airports and airlines work together to provide demand-driven airport development that avoids burdening travelers with additional taxes. Let’s stick with what works and keep the PFC precisely where it is,” said United Airlines Chairman, President and CEO Jeff Smisek, who is the Chairman of the A4A Board of Directors.

In 2013, U.S. airports collected $24.5 billion in revenue and have more than $11.4 billion of unrestricted cash and investments on hand. They also have access to the Airport and Airway Trust Fund, which is at its highest level since 2001 ($6 billion). The CEOs pointed out that airport funding is secure and that it is not necessary to increase yet another tax on passengers.

The letter comes on the heels of a national survey indicating voters are overwhelmingly opposed to an increase in the PFC. The survey of 1,000 registered voters conducted by The Tarrance Group, found 82 percent of voters oppose almost doubling the PFC and tying future automatic increases to inflation.

“A strong majority of voters not only oppose an increase in the PFC but they also view it as a tax. Now is not the time to be raising taxes on air travelers who already pay too much in taxes when current and future airport funding is secure and available,” said A4A President and CEO Nicholas E. Calio. “Airports do not have a funding crisis.”

The airline CEOs asked Congress for an active role in discussions surrounding funding for capital improvements at U.S. airports.

FMI:  A4A