Congress Should Not Add to the Cost of Flying
It’s a new year, and many Americans are paging through fresh calendars to plan where they will travel in 2020 and beyond. Congress, too, is planning for the year, determining which legislative priorities will get attention in the session ahead, as well as how those priorities will ultimately be paid for. Americans may not be aware, though, that the trips they take by air could become more expensive if Congress moves forward with a plan to ask airline passengers to pay more for their flights.
Some airports are trying to convince Congress to increase the Passenger Facility Charge, or PFC. It is one of many taxes and fees imposed on the traveling public. They are attempting to justify the need for a tax increase by claiming the current PFC, which is capped at $4.50, prevents competition and threatens airport security. Unless Congress gives them more taxpayer money, they argue, infrastructure upgrades will be woefully underfunded.
But airports are sitting on billions in cash while simultaneously claiming poverty and arguing for more money. The truth is, maintaining the PFC at its current level is neither anti-competitive nor a security issue, as some have claimed. It would actually prevent American travelers from being hit with another regressive tax increase.
Increasing the PFC is not necessary to enhance competition in the airline industry. The industry is already highly competitive, with fast growing new low- and ultra-low-cost carriers. This competition and strong growth of smaller carriers has led to historically low ticket fares, adjusted for inflation. As a result, budget-conscious travelers and families who need less expensive tickets have access to air travel like never before. Any increase to the PFC would disproportionately burden them.
Few people disagree that airport security measures overseen by the fine men and women at the Transportation Security Administration are vital to the traveling public’s safety. They not only keep us safe, they put our minds at ease. But any suggestion that raising the PFC will address additional security challenges airports face is a distortion, because the Transportation Security Administration budget is completely separate from the PFC.
Moreover, a PFC increase is completely unnecessary. Airlines and airports have already been working together to modernize and improve infrastructure at airports across the country. Airports are flush with cash that could go toward further infrastructure improvements. In fact, U.S. airports had $16 billion in cash on hand in 2018, an increase of 63 percent since 2010.
There’s no doubt that investing in airport infrastructure is necessary to improve the travel experience. But massive infrastructure projects are already underway across the country, from large airports in Washington, D.C., New York, Chicago, and Los Angeles to smaller airports in Nashville, Buffalo, and Oklahoma City. All of those are supported by the PFC at its current level. More projects are planned, all to be financed with existing funding sources. Airports should use the funds they already have before asking Congress to burden American families and budget-conscious travelers with another tax.
What’s troubling about this proposed PFC increase is that it’s unclear what the additional funds would be used for. Airports already have ample sources of funding to improve infrastructure. Higher PFCs could end up funding projects that improve the aesthetics or amenities of certain airports—but don’t improve the overall transportation system.
Simply put, giving airports more funds is likely to lead to wasteful spending instead of actual improvements that benefit travelers. As my old boss, Ronald Reagan once said, “Government does not tax to get the money it needs; government always finds a need for the money it gets.”
Families and air travelers are already paying enough to fly. If it were true that a higher PFC would make the airline industry more competitive; decrease prices to make air travel more accessible for budget-conscious travelers; and enhance our safety in this post-9/11 world, I’d be the first one to support it—but a PFC increase accomplishes none of those things.
Airports are not in a funding crisis. They have billions in cash reserves, and they are already making massive capital improvements across the country. Congress should not add to the cost of flying. Leave the money in constituents’ pockets.
James H. Burnley served as Secretary of Transportation under President Reagan. He is a partner at Venable LLP and an advisor to American Airlines.