U.S. passenger airlines saw their fifth straight quarter of increasing revenue from baggage fees, collecting $1.2 billion in the second quarter of 2017, according to new data from the Department of Transportation. Now airports are asking: What about us?
The American Association of Airport Executives (AAAE) called on airports to support an increase in the passenger facility charge (PFC), which airports use to fund projects that enhance security, increase capacity, and reduce noise, among other improvements.
Airlines are required under federal law to charge passengers a fee with every ticket; those fees are passed through to airports for projects approved by DOT. The PFC rate has been set at $4.50 per flight segment with a maximum of two PFCs charged on a one-way trip since 2000.
“Why do airlines think a bag fee is good and an airport facility fee is bad? Because one goes in their pocket and the other builds facilities that can increase competition, resulting in lower fares,” AAAE President and CEO Todd Hauptli said in a press release.
Airports received just shy of $3.2 billion in PFC funds in 2016, which AAAE notes is less than what airports have already collected in baggage fees in the first half of2017.
Airlines spoke against a proposal by Sen. Susan Collins (R-Maine) in the Transportation, Housing and Urban Development Appropriations bill to allow for a new cap of $8.50 on PFC charges.
Congress should instead dip into tax revenue in the aviation trust fund instead, said Airlines for America, an industry group representing the nation’s biggest commercial airlines. A PFC increase is a “completely unnecessary poke in the eye and wallet of air travelers,” A4A President and CEO Nicholas Calio said about Collins’ proposal.
The PFC increase passed both the subcommittee and full committee in the Senate.
Collins is optimistic an increase will be passed with the THUD appropriations bill, she told reporters.
“There has been very strong support from airports citing their infrastructure needs and there was no objection in committee,” Collins said.
“It may be that it’s too high and I’m certainly willing to take a look at that,” she said about the increase to $8.50.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)