Airlines, airports take fight over airport construction fees to Hill

Airports and airlines are battling over whether Congress should raise a ceiling for funding airport construction projects that airport authorities insist could shorten lines and minimize delays in the nation’s crowded airports.

Airports argue that an increase in the passenger facility charges (PFCs), which have been capped at $4.50 since 2000, is necessary to keep up with inflation and rising prices for construction materials. The fee comes out of the total cost of an airplane ticket, and the $4.50 cap applies to each airport used in the trip.

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“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 Airports Council International-North America (ACI-NA).

“It does need to be lifted. Not eliminated, but lifted,” said Sen. Kent Conrad (D-N.D.), who thinks there is a growing recognition of this need in Congress.

Airlines, however, argue the airports are only seeking an easy funding source from passengers that is not heavily scrutinized by 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), which represents commercial airlines.

Meenan highlighted a recent ACI-NA capital needs survey that found $87.4 billion in airport projects were needed through 2011 — an indication that airports have failed to identify “must-fund” projects.  

But airport officials argue the root of the airlines’ opposition is the fear of competition, which could result if airports had more money to build new gates and runways.

“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, associate administrator for airports at the Federal Aviation Administration.

Meenan acknowledged airlines want a say in which projects are funded, but he rejected the argument that airlines oppose an increase in the PFC ceiling because of a fear of competition.

The FAA sided with airports earlier this year by proposing an FAA reauthorization provision that increased the PFC limit to $6. That is less than the $7.50 ceiling proposed by ACI-NA.  

But Sens. Jay Rockefeller (D-W.Va.) and Trent Lott (R-Miss.) rejected the FAA’s proposal when they drafted their FAA reauthorization bill, which the Senate Commerce, Science and Transportation Committee approved earlier this month.
Instead, they created a pilot program that allows only six airports to charge unlimited passenger facility charges.

Several aviation sources said this was unsurprising. Both Rockefeller and Lott, like the Senate in general, are seen as sympathetic to commercial airlines. But the House could still authorize a higher PFC ceiling and push it through conference, according to these sources.

The House Transportation Committee is expected to produce its own FAA reauthorization bill after the recess, but Chairman Jim Oberstar (D-Minn.) has not made a commitment on the issue, according to a spokesman.

“He understands why local authorities are asking for an increase in PFCs, but is reluctant to blow the lid off PFCs and allow it to rise too high,” the spokesman said.

Airports are dwarfed by ATA and commercial airlines in terms of their political contributions. So far this year, ACI-NA’s political action committee has offered two contributions of $1,000 each to Rockefeller and Oberstar, while the American Association of Airport Executives PAC has offered another $14,000 in contributions. Commercial-airline PACs,
meanwhile, have already contributed more than $154,000 to members of the House and Senate.

McElroy said she is hopeful that an increase in the PFC can still be included in a House bill and gain support of enough Senate conferees. “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,” she said.

The fight over the PFCs is one of several debates that must be resolved if Congress is to approve a new FAA reauthorization bill this year. The current FAA authority expires on Sept. 30, and FAA observers are worrying that the tight timeframe may force Congress simply to extend the current FAA authority.

The most prominent reauthorization debate concerns whether business jets will be hit by a $25 per flight user fee, which commercial airlines support as a way of balancing the burden of paying for a modernized air traffic control system. The Senate bill included the fee, but it is considered a much tougher sell in the House, where many members represent districts more dependent on general aviation.

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