Says U.S. carriers are investing billions of dollars to support needs-based airport infrastructure development projects, rejects calls for unnecessary, wasteful PFC hike
WASHINGTON, June 18, 2014 – Airlines for America (A4A) Senior Vice President, Legislative and Regulatory Policy Sharon Pinkerton testified today before the House Transportation and Infrastructure Committee’s Subcommittee on Aviation regarding the airline industry’s support for demand-driven infrastructure development projects at U.S. airports. Pinkerton highlighted that airlines and airports have a winning formula for investing in infrastructure and urged members of the Committee not to increase the Passenger Facility Charge (PFC).
In her testimony before the panel, Pinkerton noted that U.S. airlines enthusiastically support necessary airport improvement projects and that collaboration between airlines and airports has worked remarkably well. Since 2008, the 29 largest U.S. airports alone have started or completed over $52 billion in capital projects, including new runways, new international passenger facilities and new or substantially renovated terminals at both large and small airports.
“The current system is working and airport funding projects that are based on need are being met with existing resources across the country,” said Pinkerton. “A financially healthy airline industry also translates to an especially healthy Airport and Airway Trust Fund, which enjoyed record-high revenues from commercial carriers last year, totaling $12.7 billion and the highest uncommitted balance in 13 years.”
Airlines remain opposed to a PFC hike because U.S. airports have ample resources to fund their capital needs. Unlike virtually all U.S. airlines, U.S. airports enjoy investment-grade credit, remain financially sound and have ample access to the bond market to fund capital project needs. U.S. airports collected nearly $24 billion in revenues in 2012 – a 59 percent increase from 2000 – while airline operations declined 12 percent over the same timeframe. In addition, there are ample cash resources to support future airport improvements. U.S. airports have more than $10 billion in unrestricted cash and investments on hand or roughly 282 days of liquidity.
“Raising the PFC cap will dampen demand, hurt travel and tourism, and could imperil air service to small communities,” said Pinkerton. “There is no current or foreseeable crisis in airport funding – we urge members of Congress to stick to the winning formula in place and reject further tax hikes on airlines and their customers.”
Pinkerton added that U.S. airlines and their customers already pay over $19 billion in special taxes and fees annually; that total will rise to $20 billion when the TSA fee increase takes effect in July. Air travel is taxed at a federal rate higher than alcohol and tobacco, products taxed to discourage their use. Every $1 increase in the PFC would cost passengers an additional $700 million annually and increasing the PFC to $8.00 or higher would cost in excess of $2.5 billion.