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Modernizing Passenger Facility Charge Can Promote Airport Investment, Reduce Federal Spending

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.