The American Association of Airport Executives is again calling on U.S. airlines to relent in their opposition to a Passenger Facility Charge cap increase. This is in response to data released by the U.S. Department of Transportation’s Bureau of Transportation Statistics that shows airlines collected almost $4.6 billion in baggage fees in 2017. This is a $400 million jump from the previous year.
Airlines also collected $2.9 billion in reservation-change and cancellation fees, bringing the total for all ancillary fees collected to $7.5 billion. While airlines have collected these record fees, they continue to oppose raising the federal cap on local PFCs, which has not been adjusted since 2000, leading airports to bring in $3.3 billion from PFCs in 2017.
Bag fees are not taxed at the same 7.5 percent excise tax rate as base airline tickets. Without this, the Airport and Airway Trust Fund lost $343 million in foregone revenue in 2017 alone.
“With infrastructure investment high on the agenda in Washington, it’s time for Congress and the administration to see past the self-serving and contradictory rhetoric of the airlines and remove the federal strictures on local Passenger Facility Charges that continue to hamper airport development,” says Todd Hauptli, president and CEO of AAAE.
