US airport directors say financing infrastructure is difficult

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A day after US President Donald Trump reiterated his desire to invest money in US airport infrastructure in an address to Congress, US airport directors told lawmakers that financing infrastructure projects remains difficult and pushed for reforms by the federal government.

Dallas/Fort Worth International Airport (DFW) CEO Sean Donohue said during a March 1 House of Representatives hearing that infrastructure financing is the biggest challenge US airports face. “Airports must cobble together enough funding” for necessary improvements through a variety of means, including passenger facility charges (PFCs), FAA’s Airport Improvement Program (AIP), municipal bonds and airport retail revenue, he explained. “But even the healthiest airports are stretched” to fully finance projects on a timely basis, Donohue said.

Donohue and four other airport directors testifying at a House Transportation and Infrastructure Committee hearing pushed for liberalizing PFCs. US airports are allowed to impose a maximum $4.50 PFC fee per flight segment on airline tickets after gaining approval from FAA for a targeted construction project. But the $4.50 cap was set in 2000, and airports have been unsuccessfully lobbying Congress for years to raise it.

Proposed legislation introduced March 1 by Reps. Peter DeFazio (D-Oregon) and Thomas Massie (R-Kentucky) would eliminate the $4.50 PFC cap altogether, though the bill would also reduce AIP funding by $400 million annually and make large hub airports imposing a PFC greater than $4.50 ineligible for AIP grant money.

“The PFC must be raised or uncapped,” Pittsburgh International Airport (PIT) CEO Christina Cassotis said. “It has not kept up with inflation.”

Calling the PFC “the foundation of airport capital investment” in the US, Airports Council International-North America (ACI-NA) welcomed the DeFazio-Massie bill. ACI-NA described PFCs as “a local user fee paid by air travelers.”

Past attempts to raise the PFC cap have been strongly opposed by airlines. Airlines for America (A4A) has characterized any PFC cap raise as a de-facto tax increase on airline passengers that will dampen demand for flight tickets.

DeFazio said he had reached out to A4A to discuss the proposed bill, but “they just don’t want to talk about it.” A4A, DeFazio said, believes “no one will ever get on an airplane again if we raise the PFC by $2 … What they’re really worried about it is [airports] might build more gates and we might have more competition.”

“Saddling passengers with more taxes is not the solution, particularly given the abundance of funding resources already available to airports for capital improvement projects,” an A4A spokesperson told ATW, adding, “Airports are collecting record levels of revenues … and are well positioned to fund projects without increasing PFC taxes on consumers. In fact, airports have not been able to identify a single project that has not moved forward due to the PFC not being increased.”

Cassotis said she believes airlines could go along with a reformed PFC if they were able to collaborate with airports on what projects PFCs are used to finance. “I don’t find that airlines are opposed to raising the PFC as much as they are opposed to not having control over what we use it for,” she explained.

Massie was quick to note that the proposed bill is “not increasing the PFC,” adding, “We’re giving [airports] the freedom to set it at whatever you want. You could lower it.”

Donohue, who said he supported uncapping the PFC, warned that a broad range of financing options must be available to airports and broader reforms of the way the federal government helps airports finance infrastructure projects are necessary. “The PFC is critical, but it’s not a silver bullet,” he said.

House Transportation and Infrastructure Committee chairman Bill Shuster (R-Pennsylvania) said he “couldn’t be more pleased with last night’s speech by the president” regarding investment in infrastructure. Trump called for a $1 trillion investment in US infrastructure, including airports, but did not provide any specifics other than that the investment would be “financed through both public and private capital.”

“There are billions of dollars in [airport] projects in the pipeline and we’ve got an agency here [FAA] that makes it hard to get these done,” Shuster said. But he also chided Congress for lack of action on aviation infrastructure, saying, “If I point a finger of blame at FAA, three will be pointed back at me. Congress is part of the problem.”

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