Air travel has become more accessible over the last few decades due to a confluence of business and government policy that has seen average ticket prices plummet. This has been a huge success for taxpayers and consumers. While more and more people are traveling, necessitating upgrades to airport infrastructure, the way to achieve these upgrades is not by gouging travelers, but by wisely investing the money that is already available.
The answer from politicians, who too often see consumers and taxpayers as little more than their wallets, is to raise what’s called the Passenger Facility Charge. This was implemented in 1991, but public officials and airport industry leaders have consistently called for it to be raised in spite of the fact that the declining cost of air travel has been a boon for all. A doubling of the charge, which many members of Congress have called for, would result in an increased cost of $136 for a family of four’s round-trip tickets. That would represent a heavy hit to middle-class families.
The success of fare-lowering policies and more Americans flying has meant that Passenger Facility Charge revenues continue to climb under the status quo. An increase would contribute to reversing these successful trends.
What’s more, airports are currently flush with money. According to FAA Form 127 filings, airports have more than $14 billion in unrestricted cash on hand, and the Aviation Trust Fund is at more than $7 billion, which represents the highest level since 2001. Infrastructure funding is important, but airports have plenty of it with the current Passenger Facility Charge level. The lackadaisical way out, and the one favored by airport managers and politicians, is to force people to pay more every time they fly rather than smartly managing and investing the money that they do have.
While user fee mechanisms for funding infrastructure are typically sound government policy, the Passenger Facility Charge does not function as other, better user fee programs do. Unlike Vehicle Miles Traveled programs or National Park Admission fees, the Passenger Facility Charge is federally overseen and functions more like an excise tax than a user fee. While traditional user-fee structures can be taxpayer-friendly, the Passenger Facility Charge is anything but. The airlines collect the charge while the federal government administers the funds, leaving airports the beneficiaries of the largesse while avoiding any responsibility for contributing to the government burden on air travel.
It’s time to pursue a new path. Instead of a Passenger Facility Charge hike, airports should be made accountable for raising their own user fees. Congress can help that process along by repealing the Anti-Head Tax Act. This will also give airports an incentive to be more prudent with their funding decisions.
American air travel has become accessible to all over the decades since the landmark Airline Deregulation Act, and the reason is that both business and government policy have been aimed at making travel cheaper for more people. This has resulted in more passengers than ever before.
But before rushing to increase the cost of flying, politicians and airports should evaluate how the current level of infrastructure funding is being spent and examine smarter ways to finance needed improvements. Taxes and fees have increased with the number of passengers, and the total amount of money available is near record-high levels. The typical government burden on an airline ticket now exceeds 20%. Travelers shouldn’t have to bear an even heavier load for infrastructure upgrades, especially when the opportunity for more effective reform is at hand.
Pete Sepp is president of the National Taxpayers Union.
