This bill centers on reforming the passenger facility charge (PFC), a congressionally authorized local airport user fee. The PFC serves as the primary alternative to the Airport Improvement Program (AIP), a federal grant program supported by aviation taxes.
In August, CEI published a study detailing the benefits of modernizing the PFC and the costs of continuing a status quo that is overly reliant on AIP funding. The problem is the statutory cap on the PFC, a national price control currently set at $4.50 per enplanement and which was last raised in 2000.
Due to being constrained in financing their own improvements thanks to this PFC cap, airports must often turn to their airline customers to fund needed improvements. Those airline funding agreements come with strings attached and allow dominant airlines to exercise their market power and deny airport entry to lower-cost competitors. This suboptimal airport investment and resulting reduced airline competition has been estimated to cost consumers more than $5 billion each year in higher airfares.
H.R. 3791 would eliminate the PFC cap while also proportionately reducing federal AIP spending. This approach would simultaneously increase airport investment, reduce federal spending, and promote lower consumer airfares through enhanced airline competition.
CEI was joined by several individuals and organizations. Individual signatories are leading free-market transportation policy experts Bob Poole of the Reason Foundation, Cornell University Professor Rick Geddes, former top White House infrastructure advisor DJ Gribbin, and Shirley Ybarra, who previously led the U.S. Department of Transportation transition team and served as Virginia’s Secretary of Transportation.
Leading free-market organization signers are the 60 Plus Association, Center for Freedom and Prosperity, Council for Citizens Against Government Waste, FreedomWorks, National Black Chamber of Commerce, and the Taxpayers Protection Alliance.
Read the full coalition letter here.