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  • Fee v. PFC
    Posted by Andrew Compart 9:58 PM on Jun 14, 2011

    U.S. airlines are hypocritical for opposing an increase in passenger facility charges, given the airlines' increased reliance on bag fees and other rising fees to boost their revenue, the leader of the American Association of Airport Executives says.

    The AAAE and its president, Chip Barclay, are using new bag fee and change fee figures released by the Transportation Department this week to press their argument. In a press release and--more notably--in a letter to the chairman of the Senate's Commerce, Science and Transportation Committee, Barclay makes his case. Although the odds seem long, airports still are hoping they can get an increase in the PFC--now capped at $4.50 per passenger--into the FAA Reauthorization bill that the House and Senate still are trying to work out in conference.

    "The amount of money that airports receive from local PFCs is far less than the amount of revenue that airlines have been generating from baggage fees and other ancillary charges," Barclay wrote in his letter to Sen. Jay Rockefeller. "Airports collected approximately $2.7 billion in PFC revenue in 2010 to fund critical airport safety, security, and capacity improvements. By contrast, the airlines collected almost three times that amount from ancillary fees in the past year."

    "One carrier alone collected approximately $1.7 billion in baggage fees and reservation change fess in 2010 -- more than the entire airport community would have collected in additional revenue in the past year if Congress would have raised the PFC cap to just $7," he continued. "Unlike revenue from ancillary fees, airports use local PFC revenue to build critical infrastructure
    projects and create jobs."

    In the press release, Barclay argued that "the carriers' continued opposition to an increase in the local passenger facility fee is both shortsighted and inconsistent given the airlines' increasing reliance on ancillary fees to support their own operations. With ancillary fee collections growing rapidly and producing billions in airline revenue, it's difficult to understand why the industry opposes the collection of a mere fraction of that amount by local authorities to fund critical airport safety, security, and capacity improvements."

    When Aviation Week asked the Air Transport Association about Barclay's comments, it responded sharply:

    "The ATA and our members hardly believe as the AAAE suggests that an additional $2 billion PFC increase can be considered 'a mere fraction' of fees collected," the ATA responded. "Nor do we think it’s appropriate that our passengers who already pay some $60 in taxes and fees on every $300 ticket be hit with another tax hike."

    "What’s more, it is not a direct comparison to ancillary fees; the fees collected as reported by the BTS reflect airline charges for optional services—changing a ticket or checking a bag," it continued. "Last we checked flying into an airport was not an optional purchase."

    Obviously, there is no love lost here.

    Tags: tw99, AAAE, airports, PFC, fees, ATA

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