PFC increase is bad for consumers and the economy


Story image for todays news on economy from The Hill



With the official start of summer growing closer, many Americans are preparing to pack their bags in search of leisure. This summer a historic 222 million Americansare expected to take to the air.

Where some see sun-worshipers and tourists, big government sees “Taxpayers” and dollar signs.

Fully 21 percent of the average ticket price goes to federal taxes and fees. Even with billions in expected revenue, some in Washington D.C. are proposing to increase certain federal fees on air travel by 90 percent, because the FAA and airports want more money. Taxpayers/Travellers should say “no.”
Currently the primary fee on air travel is the Passenger Facility Charge (PFC), commonly referred to as the “airport tax.” The PFC is a direct fee on air travel and revenue is handed out to airports to fund infrastructure projects.

Sadly, airports and the Federal Aviation Administration (FAA) are not only pushing to almost double the PFC but to also make annual PFC increases automatic. No more pesky requirement to vote for future PFC hikes.

Why are they demanding higher rates? They have plenty of money. The PFC is projected to generate $2.87 billion for 2015 on top of almost $3 billion from 2014. Additionally, the Airport and Airway Trust Fund (AATF), which provides funding for U.S. aviation systems, is also enjoying an uncommitted balance of $6 billion.

In addition to billions in PFC handouts, airports are themselves making a great deal of money. According to FAA reports, U.S. airports brought in over $24 billion in 2013 alone, a 52 percent per-passenger increase from 2000. This included record highs of $10 billion from airline rents and fees and $8.2 billion from non-airline revenues such as retail and food and beverage. Additionally, FAA reports show U.S. airports have over $11.4 billion of unrestricted cash and investments on hand.

There is also no shortage of collaboration between airports and airlines to improve infrastructure. In the last eight years airlines and airports have partnered to initiate and complete over $70 billion worth of infrastructure projects at the country’s 30 major airports. Improvements include new runways, new terminals and general facility updates.

When taxes and fees go up consumers lose. If the PFC is hiked as they want, the percentage of a domestic round trip ticket that goes to taxes and fees would rise from today’s 21 percent to 26 percent or almost $80 in taxes and fees on the average $300 domestic round-trip flight.

Estimates show that even a $1 increase in the PFC would amount to $700 million annually in additional costs to consumers. A $3 PFC increase was proposed in 2012. Common sense prevailed and Congress rejected the $3 increase that would have cost consumers an additional $2 billion each year. Now proponents are seeking to out do themselves and raise the PFC cap by $4.

The would be “airport tax” hikers are back asking the same question.

Supporters of PFC increases are hoping Congressional opposition to raising the PFC has waned and lawmakers won’t hold the line as they did in 2012. Congress should just say “no.” And stick to that. Once again we must stop this effort to hurt consumers, travelers and taxpayers. Can we? Yes we can.




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