Pelosi’s Infrastructure Plan Raises Airline Ticket Prices

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Posted by Michael Palicz on Wednesday, January 29th, 2020, 6:03 PM PERMALINK

House Democrats led by Speaker Nancy Pelosi unveiled their $760 billion infrastructure package during a press conference this morning.

Although Democrats were largely silent on how they plan to pay for their $760 billion spending spree, they did make it clear that Americans traveling by air would be forced to pay more money.

That’s right, despite taxes and fees already accounting for more that 20% of the price of a typical domestic flight, Democrats think you should be sending more of your money to government-run airports.

In the “Transformative Airport Investments” section of their proposal, Democrats revealed their intention to raise the Passenger Facility Charge – a government-imposed fee collected from enplaned passengers at commercial airports controlled by local and state governments. Federal law currently protects consumers by placing a $4.50 per enplanement cap on the fee government-run airports are allowed to charge airline passengers.

However, Democrats are now intent to weaken this consumer protection and raise the cost of airline tickets. According to the text of their framework, the Democrats’ plan “increases the PFC cap and indexes it to inflation going forward” citing a need to fund “landside development projects” as well as “ready airport infrastructure for the future impacts of climate change.”

Although Democrats omit the exact level they plan on raising the PFC to, House Transportation Committee Chairman Peter DeFazio has previously gone as far as to support a 90% fee hike. A PFC hike of this level would mean that a traveling family of four could be forced to pay up to $136 on a roundtrip in PFC costs alone.

A new study commissioned by Congress and released this month found that “an increase in the PFC cap would likely result in higher ticket prices for passengers traveling through airports that raised their PFC collections.”

The same study also threw cold water on the idea that airports are in need of increased PFC revenue that would justify a PFC hike. In examining the impact of inflation on PFC revenue since 2001, the last time Congress raised the PFC cap, the study found that increased passenger volume has “resulted in the inflation-adjusted value of total PFC collections increasing over time despite declines in the value of a single passenger’s PFC.” If airports have more PFC revenue at their disposal since the last time Congress raised the PFC cap, then there is no justification in asking airline passengers to pay more now.

Americans for Tax Reform, along with a coalition of free-market organizations, opposes efforts to raise the Passenger Facility Charge and urges lawmakers to focus on lowering the fees and taxes that burden passengers rather than adding to them.

Photo Credit: Gage Skidmore

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