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"Airlines, airports take fight over PFC's to Hill"

Wednesday, May 30, 2007

Airlines, airports take fight over airport construction fees to Hill  
By Ian Swanson  

Airports and airlines are battling over whether Congress should raise a
ceiling for funding airport construction projects that airport authorities
insist could shorten lines and minimize delays in the nation's crowded

Airports argue that an increase in the passenger facility charges (PFCs),
which have been capped at $4.50 since 2000, is necessary to keep up with
inflation and rising prices for construction materials. The fee comes out of
the total cost of an airplane ticket, and the $4.50 cap applies to each
airport used in the trip. 

"Increasing the $4.50 cap is important now because airports need to plan to
increase capacity to accommodate the 1 billion passengers that are expected
to travel in the next 10 years," said Deborah McElroy of the Airports
Council International-North America (ACI-NA).

"It does need to be lifted. Not eliminated, but lifted," said Sen. Kent
Conrad (D-N.D.), who thinks there is a growing recognition of this need in

Airlines, however, argue the airports are only seeking an easy funding
source from passengers that is not heavily scrutinized by the public. "We
believe the motivation behind increasing the PFC is the desire for airports
to spend money without a lot of oversight," said John Meenan, executive vice
president of the Air Transport Association (ATA), which represents
commercial airlines. 

Meenan highlighted a recent ACI-NA capital needs survey that found $87.4
billion in airport projects were needed through 2011 - an indication that
airports have failed to identify "must-fund" projects.  

But airport officials argue the root of the airlines' opposition is the fear
of competition, which could result if airports had more money to build new
gates and runways. 

"Airlines have always argued they'd like to have more control over which
projects get built at which airports with PFC dollars," said Kirk Shaffer,
associate administrator for airports at the Federal Aviation Administration.

Meenan acknowledged airlines want a say in which projects are funded, but he
rejected the argument that airlines oppose an increase in the PFC ceiling
because of a fear of competition. 

The FAA sided with airports earlier this year by proposing an FAA
reauthorization provision that increased the PFC limit to $6. That is less
than the $7.50 ceiling proposed by ACI-NA.  

But Sens. Jay Rockefeller (D-W.Va.) and Trent Lott (R-Miss.) rejected the
FAA's proposal when they drafted their FAA reauthorization bill, which the
Senate Commerce, Science and Transportation Committee approved earlier this
Instead, they created a pilot program that allows only six airports to
charge unlimited passenger facility charges.

Several aviation sources said this was unsurprising. Both Rockefeller and
Lott, like the Senate in general, are seen as sympathetic to commercial
airlines. But the House could still authorize a higher PFC ceiling and push
it through conference, according to these sources. 

The House Transportation Committee is expected to produce its own FAA
reauthorization bill after the recess, but Chairman Jim Oberstar (D-Minn.)
has not made a commitment on the issue, according to a spokesman. 

"He understands why local authorities are asking for an increase in PFCs,
but is reluctant to blow the lid off PFCs and allow it to rise too high,"
the spokesman said. 

Airports are dwarfed by ATA and commercial airlines in terms of their
political contributions. So far this year, ACI-NA's political action
committee has offered two contributions of $1,000 each to Rockefeller and
Oberstar, while the American Association of Airport Executives PAC has
offered another $14,000 in contributions. Commercial-airline PACs, 
meanwhile, have already contributed more than $154,000 to members of the
House and Senate. 

McElroy said she is hopeful that an increase in the PFC can still be
included in a House bill and gain support of enough Senate conferees. "While
we're disappointed that the Senate bill didn't include an increase in the
PFC ceiling, we've been very pleased with subsequent discussions with
committee members and staff about potential consideration in conference,"
she said. 

The fight over the PFCs is one of several debates that must be resolved if
Congress is to approve a new FAA reauthorization bill this year. The current
FAA authority expires on Sept. 30, and FAA observers are worrying that the
tight timeframe may force Congress simply to extend the current FAA

The most prominent reauthorization debate concerns whether business jets
will be hit by a $25 per flight user fee, which commercial airlines support
as a way of balancing the burden of paying for a modernized air traffic
control system. The Senate bill included the fee, but it is considered a
much tougher sell in the House, where many members represent districts more
dependent on general aviation.

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