What's Happening?
Airports Council International-North America (ACI-NA) is lobbying the U.S. government to raise the passenger facility charge (PFC) cap, which has been unchanged for 25 years. The PFC is a fee collected
by airlines and passed on to airports to fund FAA-approved construction projects. ACI-NA argues that the current $4.50 cap is insufficient to meet rising infrastructure costs. The organization is engaging with the Trump administration and the Department of Transportation to gain support for an increase. Airlines, represented by Airlines for America (A4A), oppose the increase, labeling it a 'hidden tax' on passengers. ACI-NA contends that the PFC does not cost the federal government and could reduce airports' reliance on debt financing.
Why It's Important?
The debate over the PFC cap is significant for U.S. airport infrastructure funding. Airports face a $173.9 billion infrastructure development need over the next five years, with current funding mechanisms falling short. Raising the PFC cap could provide airports with more resources for necessary improvements without increasing federal expenditure. However, airlines argue that airports are already financially robust, citing recent infrastructure projects completed without a cap increase. The outcome of this debate could impact airport development, passenger costs, and the financial strategies of both airports and airlines.
What's Next?
ACI-NA plans to continue discussions with the Trump administration and the Department of Transportation, aiming to secure support for a PFC cap increase. The organization is not advocating for a specific cap amount but suggests it should be adjusted for inflation and rising construction costs. The ongoing dialogue with Secretary Sean Duffy's staff will be crucial in determining whether the administration will back the proposal. If successful, ACI-NA hopes to persuade Congress to act, despite historical resistance to PFC cap increases.
