Consumer input on passenger facility charges was ignored
A RAND Corporation study recently commissioned by Congress concluded that the Passenger Facility Charge should be increased to fund airport infrastructure.
Travelers United provided the only consumer voice as part of that study and the underlying discussions, and we were happy to be part of the decision-making we contributed to discussions. We urged the report researchers to look at alternative funding. Our focus was on getting localities to pay a fair share of airport operating costs. Unfortunately, the final report mentioned none of our passenger concerns.
According to RAND, the purpose of the report was to examine the overall state of federal funding of airport infrastructure.
“The purposes of the report are to explain how airports in the United States currently fund and finance their infrastructure needs, assess the adequacy of those mechanisms for maintaining a well-functioning aviation system, and present findings and recommendations to policymakers. In support of these purposes, we describe airports’ planning and business processes; examine airports’ interactions with the airline industry, local and state governments, and other stakeholders; and describe the federal government’s role in funding, regulating, and otherwise affecting the decision-making behind airport infrastructure investment.”
Amazingly, the report does not touch on the role of airport users such as localities that benefit from airports 24 hours a day.
Passengers pay virtually the entire bill for airports
Passengers use only a portion of the airports. Airlines pass their costs on to passengers as any business would. Plus, the surrounding airport-related businesses use their proximity to generate profits. These nearby airport-related entities pay no taxes to the airports but benefit greatly.
The initial research prior to meetings with stakeholders was excellent — the final report disregarded passenger input
The first analysis in the study provided an accurate assessment of airport funding. It included airline and consumer concerns as well as airport and locality issues. From that starting point, Travelers United enthusiastically represented passengers. The organization wanted a report that would accurately assess the contributions and taxation of all airport users.
The final report provides a complete turnaround from the conclusions initially presented to the participants in the first draft of the study. The final RAND study includes no significant passenger input.
Airports and the House Transportation Committee Chairman are focused on fleecing the flying public
Airports distort what passengers and the airline industry say about airport taxes. No passenger ever asked to pay more taxes. Many passengers are not even aware of the Passenger Facility Charge. No airline asked to pay greater landing fees and gate rents.
Airports want to raise airport taxes as a basic user fee. It is charged to all passengers who pass through the terminals, take off from the runways, park, arrive and depart in taxis, and rent cars. However, passengers use airports uniquely. They do not all incur the same costs.
The term “user” is never applied to nearby airport businesses though they use airports far more than even the most frequent traveler.
Airport executives want other peoples’ money
Airports fear their own taxpayers who often engage in political battles with airports. Local taxpayers have no intention of funding unnecessary expansion. Airport neighbors battle for airport-generated issues that affect the quality of life in their neighborhoods. This includes traffic and noise. And businesses want lower costs, not new taxes. Thus, federal money stops taxing local taxpayers. No wonder airports love it.
Federal money comes with no local constituent complaints
When dollars come from Congress, the only person the airport needs to thank is their congressman and senator. Asking for tax dollars from constituents who live in their districts and who politicians see on the street every day creates problems. It is even more difficult to raise taxes for businesses that make political campaign donations.
Who is the bigger user of the airport?
Travelers United agrees completely. Passengers are airport users. However, who is the bigger user of an airport? The passenger who takes off and lands once a week? Or, the local hotel, parking lot, or office building that makes money from their proximity to the airport 24 hours every day?
Without an airport, no businesses generate taxes or need infrastructure. No parking lots or multimillion-dollar office buildings. No hotels or taxi revenue. At Dulles Airport, cows could graze in rolling fields where they do today only 20 minutes from the bustle of the airport.
Hotels and parking companies pay something like $2 for every bus that shuttles passengers to parking spots, office buildings and accommodations. However, in other cases, these businesses pay no additional taxes toward the operation of the airport.
The current funding levels are sufficient to support airport construction for decades
A mantra of airports repeated regularly, “Congress has not increased airports’ primary funding mechanism in almost two decades.” That may be true, however, today’s system of airport taxes increases income with demand.
The continued rise in passenger traffic increases airport income. Every day airports have more funding for airport infrastructure. Every new passenger generates more airport income.
Federal airport funds claim billion-dollar surpluses, not shortfalls.
Federal money results in inefficient local projects
Federal money comes with federal bureaucratic strings attached. Arcane restrictions choke rules. Funds cannot go to off-airport structures or airport accessibility. PFC money cannot be used for train or metro access to airports. Hence, airports construct illogical transport systems in order to qualify for federal funding. They don’t provide those they tax with the lowest cost and best systems. San Francisco and Dulles Airport public transit solutions star as poster children for twisted federal funding.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past ten years with Congress, the Department of Transportation and industry stakeholders on travel issues. He was the consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.