If you’ve seen your airfares decrease lately, as many Americans have, don’t thank the federal government. In fact, Congress imposes so many taxes and fees on air travel that more than 20 percent of the average ticket price is diverted to government coffers. Yet some politicians are pushing to make flying more expensive by increasing the passenger facility charge (PFC) – a tax that travelers pay at U.S. airports.

The PFC is intended to help fund capital improvement projects at airports. The current PFC rate is $4.50 per flight segment. In 2018, airports collected a record-setting $3.5 billion in PFCs – a $228 million increase from 2017.


Now, some members of Congress want to double the PFC, which could result in a family of four paying well over $100 in PFCs alone on one trip. Some are even pushing to go further and eliminate the cap altogether. This would result in airports having the ability to increase taxes on passengers with no end in sight.

The costs of a higher PFC wouldn’t go unnoticed by price-conscious consumers. In a new analysis from the American Consumer Institute, my coauthor and I estimate that a PFC hike would cause the number of air passengers in the U.S. to drop by 7.5 million in 2019 and reduce consumer welfare by $3.1 billion per year. When both direct and indirect impacts are considered, a study by the International Air Transport Association found that a higher PFC would reduce U.S. GDP by $5.1 billion and eliminate 52,000 jobs.

Are airports “desperately” in need of additional money? Not even close. In reality, with air traffic up and federal funding growing rapidly, U.S. airports are thriving. In 2017, airport revenues broke records, reaching nearly $30 billion.

Passenger growth has sent airport revenues soaring, a key reason why increasing the PFC is simply not necessary. The $3.5 billion airports collected last year was more than double the amount collected in 2001. Today, PFC collections are more than $1 billion higher than if they had just kept pace with inflation.

In the last decade alone, more than $165 billion has been dedicated to capital projects that have been completed, are underway, or have been approved at America’s 30 largest airports. Development is also robust at smaller airports, like runway projects at Columbus, Des Moines and El Paso, and terminal projects at Bangor, Eugene and Grand Rapids.

Despite such massive investment, airports are sitting on $14.7 billion in unrestricted cash and investments on hand (a 49 percent increase since 2010) – enough to finance their infrastructure needs for more than a year without collecting a penny in taxes.

On top of that, the federal Airport and Airway Trust Fund (AATF) will have an uncommitted balance of $47.7 billion by the end of the decade, up from the nearly $7 billion available right now. Congress should use that surplus before contemplating raising fees on travelers.

America’s airports are in a strong financial position to support current and future infrastructure projects. A higher PFC is unjustified and would unnecessarily increase taxes on air travel and would hit consumers directly in the pocket. There is no need for Congress to allow airports to tack on more to the PFC.

Steve Pociask is president of the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org.