The U.S. Travel Association is offering a potential compromise in a fight over the amount of money that airline passengers can be charged to help pay for airport improvements.
Airport groups in Washington have been pushing Congress to nearly double the cap on the fee that is added to every plane ticket, which is known as the Passenger Facility Charge (PFC), from $4.50 to $8.50. They want to use it to help pay for a backlog of improvement projects, arguing that it has not been adjusted since 2000.
Airlines have countered that passengers are already charged enough fees by the federal government when they purchase flight tickets and that airport projects are adequately funded in other ways, such as the Federal Aviation Administration’s (FAA) Airport Improvement Program.
{mosads}The U.S. Travel Association is offering a proposal that calls for reducing taxes on airline tickets to offset the impact of an airport fee increase on passengers.
The group’s president, Roger Dow, said the compromise would allow lawmakers to turn their attention to a broader funding measure for the FAA, which is currently set to expire on Sept. 30.
“FAA reauthorization presents an amazing opportunity to address a host of issues in our air travel system, and we should not squander it by only addressing a couple of the needs of our air travel system,” Dow said in a statement.
“The FAA bill should represent a comprehensive approach, and the policies it advances should be pro-competition, pro-growth and pro-traveler,” he continued. “I don’t think there’s a single individual or group out there who would say they disagree with that.”
The travel group’s proposal calls for eliminating a set of five taxes that are charged on each airline ticket purchase to offset the potential airport fee hike. The group said taxes that would be removed under the proposal are: the Domestic Passenger Ticket Tax, the tax on international arrivals and departures; the Domestic Commercial Fuel Tax, the tax on mileage rewards; and the tax on flights between the continental U.S. and Alaska or Hawaii.
In exchange for the reduction in airline ticket taxes, airports would receive the one-time passenger fee increase they are asking for and the PFC would be indexed to inflation to avoid future fights over airport funding.
The Travel Association’s Dow said his group’s proposal was a compromise that could appease both sides in the fight over airport funding, which he said has been “particularly contentious.”
“We continue to believe that the PFC, as a pure user fee, is the ideal means to address our severe infrastructure challenges,” he said. “But finding the math to be able to include an airfare tax cut is a critical new piece, and has been expressly designed to address the concerns of some who have attacked the PFC approach.”
The Passenger Facility Charge was first established by Congress in 1990. The FAA says “airports use these fees to fund FAA-approved projects that enhance safety, security, or capacity; reduce noise; or increase air carrier competition.”