It's a Catch-22: there is little disagreement that U.S. airports have needed long-awaited infrastructure improvements, but the dilemma has always been whose responsibility it is to pay for it.
Now a controversial new proposal in the Obama Administration's Fiscal Year 2016 Budget is calling on air travelers to foot part of the bill, creating a rift between the airlines and their backers, and supporters of the airports themselves.
The federal budget calls for an increase in the Passenger Facilities Charge from its current rate of $4.50 per flight to $8 and, in fact, airports are pushing for the charge to be extended to $8.50 when the final budget is approved.
U.S. Travel Association President and CEO Roger Dow backed the proposal, saying today the group strongly supports the efforts to modernize what it says is "our failing air travel infrastructure."
"Travel demand-and therefore the $2.1 trillion boost that travel gives the U.S. economy annually-cannot grow at the projected pace unless we aggressively tackle the crisis with our air travel infrastructure," Dow said. "We have studied the issue in great depth, and our research shows conclusively that addressing travelers' desire for a better and more efficient flying experience trumps any other proposal for growing the U.S. travel economy."
Dow called the PFC an ideal fiscal instrument.
"It is rigorously designed in such a way that 100 percent of the funds it raises pay for projects that materially benefit travelers. Congress cannot raid it for unrelated programs, and airports are prevented from spending it on anything but the most relevant infrastructure priorities," he said.
But the airlines say an increase in the PFC would slow demand for travel.
Victoria Day, a spokeswoman for the airline lobby group Airlines for America, told USA Today: "The GAO (Government Accounting Office) reaffirmed what economists have long said - when costs are increased, as a PFC hike would do, demand is suppressed, which negatively impacts the economy, airline customers, employees and the communities we serve."
Last month, the American Association of Airport Executives (AAAE) slammed that thinking, saying the airlines are being disingenuous about the increase in the PFC when they make billions off of ancillary fees.
AAAE President and CEO Todd Hauptli said there is a "significant disconnect that exists with our airline partners, who continue to oppose a long overdue adjustment in the arbitrary federal cap on local airport user fees while they grow increasingly reliant on baggage fees and other ancillary charges."
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