5 Reasons to Oppose Hiking the Passenger Facility Charge

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Posted by Ed Tarnowski on Tuesday, July 9th, 2019, 3:23 PM PERMALINK

Every time you fly, you are charged a Passenger Facility Charge (PFC) of $4.50 per flight segment, capped at $18.50 for round trip flights. The PFC was created in 1990 as a supplementary funding source to grants issued to airports from the Airport Improvement Program. Congress placed a cap on the PFC to protect air passengers from runaway fees imposed by government-run airports who already receive taxpayer funding in the form of AIP grants. 

However, there has been a sustained effort led by Rep. Peter DeFazio (D-OR), Chairman of the House Committee on Transportation and Infrastructure, to skirt the guardrails Congress put in place and raise the PFC to $8.50 per enplanement, a 90% PFC hike. 

Here are five reasons why this is a bad idea. 

  1. Government taxes and fees already account for more than 20% of the price of a typical domestic flight, as stated by Airlines for America. Congress should be working to reduce the tax burden placed upon the flying public, not adding to it. 

  2. A measly 9.1% of funds collected from the PFC are used towards airside improvements such as runways, navigation aids, lighting, and other airside safety projects.  While a whopping 30.9% of the funds go towards paying off interest on bond financing. According to a report from the Congressional Research Service, “Increasing the PFC would do little to improve airport and flight safety, as only a fraction of the revenue goes towards such projects.”   

  3. According to the International Air Transport Association, a hiked PFC could reduce US GDP by $5.1 billion and kill over 52,000 jobs. 

“The decrease in passenger traffic due to the increased cost of flying would force the elimination of these jobs and inevitably take a major toll on America’s GDP.” 

  1. Airports already have plenty of revenue made available. Without raising the PFC cap, revenue generated from the PFC has steadily risen, even doubling since 2001. Since 2000, airport revenues have outpaced inflation and grown by 47%. US airports ended 2017 with a record $14.5 billion in unrestricted cash and investments. The idea that the flying public needs to cough up more money is unjustified. 

  2. Raising the PFC would slow passenger growth. A 2015 report from the Government Accountability Office found that a PFC cap increase could actually “reduce total AATF (Airport and Airway Trust Fund) revenues” due to reduced passenger demand.  

Photo Credit: Willy Vermaelen

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