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.
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