The competitive viability of American airports also depends on another fiscal component that has not been addressed in recent years. The Passenger Facility Charge (PFC) user fee, like the AIP, pays for the many necessary, and often federally mandated, airport renovations that improve safety, security, environmental regulatory compliance and airport capacity. But the PFC’s purchasing power in 2013 is roughly half of what it was in 2000, when its current ceiling was set by Congress at $4.50 per passenger segment.
When Congress authorized the PFC in 1990, it recognized the need for the users of the national air transportation system to pay for projects that preserved or enhanced its safety, security and capacity. There was also an understanding that these user fees were critical in helping to attract new airline service at lower fares with more competition. These objectives are still the same in 2013; the only thing that has not changed is the PFC. A small increase in this local airport user fee helps guarantee that airports can continue to provide safe, secure and efficient facilities benefiting passengers and their communities, as well as generating economic activity and creating jobs.
The future of American airports—and the dynamic commercial aviation industry that our airports support—is now at a crossroads. As demonstrated this spring, AIP could be vulnerable to being diverted to fund future budgetary stop-gaps, and many small- and medium-sized airports, which depend on this funding, could find themselves in jeopardy. For larger airports, where the PFC user fee is critically important for funding the projects necessary to accommodate airline consolidation and new aircraft, the situation is even worse. The purchasing power of the PFC continues to erode, leading to delayed construction projects and higher borrowing costs.
Congress and the administration need to come together this fall and provide airports the ability to fund the critical safety and security investments that will benefit passengers, foster competition, strengthen their local economies and create jobs. Not addressing the future integrity of both funding sources—AIP and the PFC user fee—will cast a long shadow over American airports and the U.S. commercial aviation industry for years to come.
Kelemen is senior vice president of Government and Political Affairs for Airports Council International – North America.