Organization Supports Even Higher PFCs In Bill

On Wednesday, Airports Council International-North America (ACI-NA) called the Federal Aviation Administration’s (FAA) draft reauthorization legislation a good start for the airport industry, but more work is necessary to enable airports to continue funding local improvements which will accommodate future growth and enhance the efficiency of passenger and cargo service.

"We’re happy that the FAA included elements that ACI-NA has been advocating for reauthorization, such as an increase in the cap on the Passenger Facility Charge (PFC), streamlined administration of PFCs and allowing market-based measures to govern congestion management," said ACI-NA President Greg Principato.

Using the authoritative Means Construction Cost Index (Means' CCI), which measures trends in the cost of constructing capital projects, ACI-NA research shows that the $3.00 PFC is worth only $1.73 in 2007 dollars, while the $4.50 PFC is worth $2.86. When fully indexed for construction-cost inflation using the Means' CCI, the existing $3.00 PFC should be $5.21 in 2007, while the $4.50 PFC should be $7.20.

"ACI-NA has made a clear case for an increase in the PFC from the FAA proposed cap of $6.00 to $7.50, and advocates indexing PFCs to ensure that their value is not eroded," Principato said.

Principato states the proposed FAA reauthorization bill falls short of what is needed for airport capital programs. It includes only $2.75 billion for the Airport Improvement Program (AIP) in Fiscal Year (FY) 2008, a decrease from the authorized $3.7 billion from FY 2007.

AIP is an important source of funding for airport capital projects and is especially important for smaller airports that have less access to private capital markets. Reauthorizing AIP at current or higher levels will make more funds available for the discretionary program and Letters of Intent program for runway and other large projects important to the national air transportation system.

"In addition, we want to strengthen points of order and budget protections that would make it difficult for appropriators to fund the AIP below the authorized amount and increase funding for programs that help small communities attract and retain commercial service," Principato added.

Furthermore, FAA's Grant Assurances should be streamlined and simplified to eliminate obsolete and redundant provisions, focus on unauthorized diversion of aviation revenues and empower airports to sustain themselves as non-profit public entities. Airport operators should also be permitted to charge federal agencies for the use of airport facilities.

"In order to plan for and support long-term capital investment in airport infrastructure and the Next Generation Air Traffic Control System (NextGen), FAA and aviation stakeholders need a stable and predictable funding stream that does not unfairly allocate cost to all users of the system and is bolstered by an equitable and guaranteed General Fund contribution," said Principato. "Everything should be on the table during this reauthorization period. It is appropriate to look at all options to meet this need."

FMI: www.aci-na.aero