By Phil Gusman

Travel industry groups are at odds over a proposed increase in the Passenger Facility Charge (PFC) by an extra $4 over the maximum $4.50 currently charged to every boarded passenger.

According to the Federal Aviation Administration, airports use the PFC fees “to fund FAA-approved projects that enhance safety, security, or capacity; reduce noise; or increase air carrier competition.”

The U.S. Travel Association, representing all components of the travel industry, is a main proponent of the increase, saying survey results it released this week “conclusively show” travelers are willing to pay the increased fee if they know it’s going toward a “more efficient air-travel system.”

USTA says, “Although travelers remain frustrated by ticket add-ons from which they derive little benefit, such as bag and change fees, 6 out of 10 travelers would welcome user fees dedicated to improving efficiency and choice.”

“Because travel consumers are very astute, we’re not at all surprised to learn that they are willing to pay for something that provides them with a tangible benefit.”

–USTA President Roger Dow

Other groups, led by U.S. airlines trade group Airlines for America (A4A), oppose what they call an “airport tax,” arguing that airports are actually flush with cash to the point where billions remain uncommitted and unspent, and so there is no need for the increased fee.

Charlie Leocha, chairman and founder of Travelers United, which represents all types of travelers, says, “Unlike our highway systems where potholes are not filled and bridges crumble, the airport system is state-of-the-art.

“For passengers taking off and landing at airports, this proposed hike is an unfair subsidy and an unnecessary one when the infrastructure banks are brimming with billions of dollars of uncommitted cash.”

“Airports have plenty of resources and passengers are already taxed enough.”

 

–A4A Senior Vice President, Legislative and Regulatory Policy Sharon Pinkerton

The USTA disputes the idea that airports are flush with cash, with President and CEO Roger Dow stating the infrastructure is “outdated and overburdened.”

He adds, “Fortuitously, there is an existing funding mechanism for fixing our beleaguered airports that speaks perfectly to flyers’ preferences—the [PFC]—a local user fee paid only by users of specific airports. The trouble is, it hasn’t been indexed for inflation in a decade and a half, while our air travel infrastructure falls further behind the rest of the world.”

Exchanges by the travel groups through competing statements trade some barbs, with Travel United’s Leocha saying proponents of the PFC fee increase are “weeping and wailing about the need for more taxes,” while the USTA argues airlines’ opposition is part of a pattern of big U.S. airlines being “deathly allergic to competition” in the marketplace, one area the PFC addresses.

Dow says four U.S. airlines now carry 85% of U.S. passenger traffic—“the result of the industry’s radical consolidation of the last several years,” and he says expanding terminal space or allowing airports to purchase back unused slots and gates, which could be funded through the PFC, would increase competition.

A4A disputes the idea that the airlines are averse to competition, stating, “U.S. airlines continue to be very competitive at numerous key cities across the United States and every U.S. airline is increasing capacity with year-over-year growth in available seat miles that average 5.6 percent from second quarter 2014, compared to the same period in 2015.”

The group adds that customers are currently benefitting from “affordable airfares having not kept pace with inflation.”

So, what’s your call? Would you pay an extra $4 per ticket (which Leocha notes could add up in a given trip when you factor in round trips and connections) for infrastructure improvements at airports, or do you agree with the airlines that this would just be an unnecessary fee?

USTA survey results

The USTA’s survey, conducted by Research Now, is based on 1,015 interviews completed from March 17-18. The interviewees had taken at least one air trip in the past 12 months and were 18 years old or older.

According to the USTA:

• 62 percent said they are “somewhat frustrated” or “very frustrated” with air travel generally.
• 58 percent are willing to pay up to $4 more per ticket to fund airport improvements projects that would enable airports to accommodate more airlines, modernize facilities or reduce delays in and around the airport.
• The most frustrating costs associated with flying, according to respondents:
  $200 airline fee for flight changes or cancellations
  $50 airline fee for seat assignments
  $25 airline fee for checked bags
  $50 airline fee for priority boarding
• The most frustrating overall aspects of flying:
  Delays and cancellations
  Inability to accurately compare airfares because of some hidden fees (e.g., bags, seat assignments)
  The security screening process
  Limited airline selection