The American Association of Airport Executives questioned airlines on their ongoing opposition to increasing the passenger facility charge cap in light of the U.S. Department of Transportation reporting that carriers made more than $1.6 billion in baggage fees and ancillary revenues during the first quarter of 2015.
Department of Transportation statistics indicate that airlines collected more than $864 million in baggage fees and more than $764 million in reservation change or cancelation fees in the first quarter. The airlines collected more than $6.5 billion in revenue combined from those categories in 2014 and have collected more than $39.6 billion in those categories since 2008, according to AAAE.
Comparatively, PFC revenues for airports was less than $2.8 billion in 2014. The cap is $4.50 and has not been adjusted since 2000.
“It’s hard to reconcile the aggressive resistance of the airline industry to calls from airports for self-help to modernize their facilities while the carriers continue to rake in billions annually in fees from passengers,” says Todd Hauptli, president and CEO of AAAE. “With Congress poised to consider transformational changes to the nation’s aviation system, we need lawmakers to act in the long-term best interest of local communities and the nation by modernizing the passenger facility charge program.”
Hauptli testified at a Senate Commerce subcommittee hearing earlier this year that the collection of baggage fees hurts airports because those revenues are not taxed at the 7.5 percent excise tax rate applied to base airline tickets. According to AAAE, that’s a loophole that cost the Airport and Airway Trust Fund $265 million in lost revenue in 2014. The organization is lobbying lawmakers to close that loophole.
In other AAAE news, Hauptli was one of 40 people honored last week by Bisnow Ventures as one of Washington’s “Trending Association Leaders.”
“AAAE is firing on all cylinders due to an incredible team dedicated to pushing the envelope every day to drive service, innovation and results for our members,” says AAAE Chairman Jeff Mulder, who also is director of airports at Tulsa International (TUL). “Whether it is our new award-winning Interactive Employee Training Learning Suite, our Airport Innovation Accelerator or our efforts to deliver a new tracking and payment system for our app-based ground transportation at airports across the country, we are moving in new and exciting directions thanks in large measure to the vision, creativity and hard work of our CEO Todd Hauptli and his leadership team.”
