Today, the Competitive Enterprise Institute released my report, “Modernizing the Passenger Facility Charge to Increase Airport Investment, Reduce Federal Spending, and Save Travelers Money.” The passenger facility charge (PFC) is a local airport user fee that serves as an important revenue tool with less federal meddling than its primary alternative, Airport Improvement Program (AIP) grants.
The report includes:
- A brief history of local airport user fees and federal policy.
- An explanation of why the PFC offers improved flexibility (and efficiency) relative to traditional federal AIP grants.
- A description of the heightened risks facing non-aeronautical airport revenue some PFC opponents tout as viable alternatives to the PFC.
- A discussion of how a modernized PFC could be used to improve airline competition and lower airfares for consumers.
The report endorses the bipartisan H.R. 3791, the Investing in America: Rebuilding America’s Airport Infrastructure Act, recently introduced in the U.S. House of Representatives by Reps. Thomas Massie (R-KY) and Earl Blumenauer (D-OR). H.R. 3791 would eliminate the $4.50 PFC cap, require that airports charging more than $4.50 to return 100 percent of their AIP entitlement grants, and proportionately reduce the annual AIP authorization by $400 million. CEI recently organized a free-market coalition letter to the House Transportation and Infrastructure Committee in support of H.R. 3791.
Read the full report here.