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Thu, May 31, 2007

Airport Groups Want Cap On Passenger Facility Charge Lifted

Airlines Accuse Airports Of Seeking "Easy Funding Source"

In letters this month to the Co-Chairmen of the Senate Committee on Commerce, Science and Transportation and members of the House Transportation & Infrastructure Committee, 13 aviation associations urged Senate action to allow an increase in the capped Passenger Facility Charge (PFC) they contend will reduce passenger delays and inconvenience and provide airports with a "critical" funding source.

PFCs are local fees used by airports to build for safety, security and capacity projects, including new runways, taxiways and terminals to meet passenger needs, according to the Airports Council International-North America (ACI-NA).

Led by the ACI-NA, the 13 aviation associations include Airports Council International-North America, American Association of Airport Executives, National League of Cities, National Association of Counties,  National Association of State Aviation Officials, Airport Consultants Council, National Air Transportation Association, Associated General Contractors of America, American Association of State Highway and American Society of Transportation Officials, American Society of Civil Engineers, American Road & Transportation Builders Association, American Council of Engineering Companies and National Stone, Sand and Gravel Association.

The fee has been capped at $4.50 since 2000 and airports argue the requested increase is necessary to keep up with rising construction material costs and inflation in general.

"Increasing the $4.50 cap is important now because airports need to plan to increase capacity to accommodate the 1 billion passengers that are expected to travel in the next 10 years," said Deborah McElroy of the ACI-NA.

Airlines contend the airports just want an easy funding source that won't be too obvious to the public.

"We believe the motivation behind increasing the PFC is the desire for airports to spend money without a lot of oversight," said John Meenan, executive vice president of the Air Transport Association (ATA).

Sen. Kent Conrad (D-ND) believes this is a growing issue in Congress and sides with the airports. "It does need to be lifted. Not eliminated, but lifted."

Meenan cites a recent ACI-NA capital needs survey that projected $87.4 billion in airport projects would be needed through 2011 which, he says, indicates airports have failed to identify their "must-fund" projects, according to The Hill. 

The airport side fired back saying the airlines are only opposing the fee increase because they fear competition. If the airports had more money, they could build more gates and runways attracting more carriers.

"Airlines have always argued they'd like to have more control over which projects get built at which airports with PFC dollars," said Kirk Shaffer, the FAA's Associate Administrator for Airports.

The FAA sided with airports when it included a PFC cap increase to $6, as opposed the ACI-NA's request of $7.50, in a reauthorization provision. But Sens. Jay Rockefeller (D-WV) and Trent Lott (R-MS) rejected that proposal when drafting their reauthorization bill, which was approved earlier this month. Their version allows six airports to charge unlimited PFCs.

"While we're disappointed that the Senate bill didn't include an increase in the PFC ceiling, we've been very pleased with subsequent discussions with committee members and staff about potential consideration in conference," McElroy said.

This skirmish is just one of many that have to be resolved before a new FAA reauthorization bill can be approved.

Another aspect to be considered in this battle is political contributions. What bearing this has, if any, remains to be seen. The ACI-NA's political action committee has offered two contributions this year of $1,000 each to Rockefeller and Oberstar.

The American Association of Airport Executives PAC ponied up $14,000 in contributions; PACs of commercial airlines have spent more than $154,000 in the House and Senate.

FMI: www.aci-na.org, www.aaae.org

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