Despite objections from carriers, U.S. airport executives again pushed Congress this week to adjust the cap on Passenger Facility Charges as a way to fund much-needed infrastructure projects.
The airport industry was out in full force this week as it ramped up its efforts to convince Congress to raise or eliminate the $4.50 cap on PFCs. Airports say they have a massive backload of infrastructure projects that need to be completed to meet the needs of the expanding pool of travelers.
At a key hearing before the U.S. House Transportation and Infrastructure Committee, Larry Krauter, CEO of Spokane International (GEG) and current secretary/treasurer for the American Association of Airport Executives (AAAE), told lawmakers his airport is preparing to embark on a $190 million terminal renovation and expansion, and that boosting the PFC cap from its current level of $4.50 to $8.50 would allow GEG to reduce its interest payments from $151 million to as low as $18.7 million.
“Unfortunately, the status quo is not working when it comes to funding the infrastructure investments that our airports desperately need,” Krauter testified. “Doing nothing is simply not an option for Spokane.”
Cincinnati/Northern Kentucky International (CVG) CEO Candace McGraw also spoke, telling lawmakers that, “Airports are running out of time for Congress to remove the outdated cap on the PFC.”
McGraw, the chair of Airports Council International (ACI-NA), said current funding levels are proving woefully inadequate to deal with the growth in passenger demand. “Airports have investments to make now; we have jobs to support and create today,” she added.
Tampa International (TPA) CEO Joe Lopano told the committee that a PFC increase would also help his airport fund a long list of security needs.
The airports have an ally in committee chairman Peter DeFazio (D-OR), who in prepared remarks stressed that his priority this year will be to increase the PFC cap.
“We need more terminals, more runways and taxiways,” DeFazio said. “And without an increase in the PFC, who bears the brunt? Passengers. They end up paying basically double for a project and wait years longer than necessary for project completion.”
The committee also heard from carriers, who prefer the PFC to stay at its current level. Ted Christie, president and CEO of Spirit Airlines, told the hearing that a PFC hike is not needed because airlines are already investing billions in airport infrastructure. Christie also suggested that U.S. airports are using current PFC money for “dual-use” projects that benefit cargo and general aviation operators and not solely the commercial air traveler.
Some lawmakers are skeptical of an increase. “Ranking infrastructure committee member Sam Graves said that “we have to make sure that we’re talking about infrastructure needs, not infrastructure wants.”
