Writes Letter To Pelosi, Boehner

ATA's James May seems to think that increased PFCs are not in the air travel industry's best interests. While ATA has been all for levying a number of additional charges on the rest of the industry, at various times, ATA seems to think that additional Passenger Facility Charges are not a good thing. One wonders, though, how much support ATA might have had from the rest of the aviation community, if it hadn't alienated other members of the aviation world when it (previously) tried to force other charges on them. So, instead of the rest of aviation helping out as their natural allies in the aviation universe... many are still stinging from ATA's past attacks...

Hmmmm...

Herewith, ATA Letter To Speaker Pelosi and Minority Leader Boehner:

On behalf of the Air Transport Association and the major U.S. commercial air carriers and their passengers, I write in strong opposition to the proposed increase in the passenger facility charge (PFC) contained in H.R. 915, the FAA Reauthorization Act of 2009. I urge you to make the Minnick amendment in order, so that a full debate can occur about whether to increase passenger taxes during a time of severely weakened travel demand.

H.R. 915 will significantly raise the cost of air travel, with passengers paying as much as $2 billion more each year in PFC taxes to supplement already amply-funded airport coffers. The legislation would authorize a $7 passenger facility charge on passengers passing through their airports – a 56 percent tax increase over today’s maximum $4.50 head tax. On a round-trip ticket with one stop – the most commonly purchased ticket from passengers traveling from small and mid-sized communities – each passenger could be charged $28 in PFCs. A family of four could pay upward of $112 in PFCs alone.

Such an unprecedented PFC tax increase ignores the current economic realities and the effect of the downturn on the airline industry. In fact, an April 2009 Government Accountability Office (GAO) report to Congress underscores the precarious state of the U.S. passenger airline industry, citing the significant losses of over $4.3 billion in the first three quarters of 2008. The GAO assessment for the year continues, stating that “the demand for air travel now appears to be weaker than expected – especially among business and international travelers – and revenues appear to be declining.”

By contrast, airports are well-funded already, with $27 billion in unrestricted financial assets, including cash, at their disposal. Airports enjoy an enviable financial status. Of the 77 airports rated by S&P, 77 are investment grade. They received $13 billion each year from 2001-2005 for capital improvements according to the GAO, in addition to billions in annual AIP funding and billions more from airport concessions and other nonaeronautical sources.

While PFCs can be used to fund projects that enhance safety, security or capacity; reduce noise or increase air carrier competition, many projects are controversial and of questionable value, such as the “rails to nowhere” project proposed in Phoenix. H.R. 915 even permits airports to use the additional PFC funds to construct bicycle storage lockers. Modernization of the nation’s outdated, inefficient air traffic control system is what will reduce delays, not more money for airports to spend on “nice to have” but nonessential projects.

Without question, the airport community has sufficient revenue and financial integrity to fund necessary airport improvement projects. The unjustified 55 percent tax increase would severely impact passengers, particularly in small and mid-sized communities. The U.S. commercial aviation industry drives over $1.1 trillion in economic activity and 10.2 million domestic jobs. Yet airline employment has dropped over 28 percent since 2001, marking a loss of one out of every four industry jobs. There were over 28,000 layoffs last year alone, and thousands more are estimated for 2009. The U.S. economy and the commercial airline industry cannot afford regressive policies that inhibit economic growth or that add additional fees and costs.

We urge you to reject this tax increase and other provisions in H.R. 915 that preserve the status quo and do nothing to ensure the badly needed modernization of the nation’s air traffic control system.

James C. May, President and CEO, Air Transport Association

FMI: www.house.gov, www.airlines.org