At the Aero Club of Washington lunch on February 8, the newly installed Chairman of the House Committee on Transportation and Infrastructure, Rep. Peter DeFazio, renewed his prior call for a congressional increase in the airport passenger facility charge (PFC) cap currently pegged at $4.50 per trip leg, for a total round-trip cost of $18 (there is a two-segment per one-way ceiling). Congress should say "no thanks." The long-sought increase in the PFC deserves the fate of the infamous Boston Tea, which symbolized the excesses of taxation from a distant ruler, and was appropriately tossed aside.
The current PFC fees, which Congress has authorized and are approved by the FAA in response to airport applications, adds as much as $64 to the round-trip airfare of a family of four. That is already excessive. What happens if the cap is increased to $8.50 per segment, as airports have requested? Does that mean the PFCs alone will be $136 for a family of four with a connecting flight (round trip)? This cost burden is in addition to a U.S. Federal Segment Fee, which adds $4.20 to every take-off on a domestic flight ($16.80 for a connecting round trip), plus the 7.5% transportation excise tax that is included in the airfare. The right to travel is a fundamental right that cannot be properly exercised if saddled with excessive taxes. As Hippocrates said, “everything in excess is opposed to nature."
Passengers already pay for airport development through excise taxes that are remitted to airports in federal grants, and airfares paid to carriers, which must pay to use runways and terminals. Airports like the fact that PFC revenues have fewer strings attached than federal Airport Improvement Program funds, which allows them to avoid the need to reach agreement with airport users on projects to be funded. But the ability of airports to use PFC revenues without meaningful air carrier involvement (and appropriate checks and balances) is a substantial reason for not increasing the fee cap. Airlines and their passengers are the users of the airports, and should always have a genuine seat at the table when major decisions are made as to how to spend fees paid entirely by airline passengers.
Airlines, which collect PFCs at the time of purchase and remit the fees to airports, understandably oppose an increase because it could potentially reduce passenger demand. In its most recent report on the issue, the U.S. Government Accountability Office (GAO) concluded that increasing the PFC cap could slow passenger growth and thereby decrease the amount of revenues paid annually into the Airport and Airway Trust Fund (AATF). Airlines also have an ally in consumer advocate groups, such as Travelers United, which fully appreciate that consumers will bear the brunt of higher PFCs. Air service is a fundamental ingredient of a vibrant national economy. If taxes and fees could make air travel so expensive that families cannot afford it, Congress will be killing—or at least maiming—the goose that laid the golden egg.
49 U.S.C. § 40103, titled "Sovereignty and use of airspace," states that "a citizen of the United States has a public right of transit through the navigable airspace." How efficacious is that right if a family of four has to pay $136 in PFCs plus excise taxes and security fees?
The Supreme Court has opined that a user fee is reasonable under the Commerce Clause of the U.S. Constitution if it (1) is "based on some fair approximation of the use of the facilities, (2) is not excessive in relation to the benefits conferred, and (3) does not discriminate against interstate commerce." Northwest Airlines, Inc. v. Kent County, 510 U.S. 355, 369 (1994). Increased PFCs would fail all three tests. First, the PFCs are not based on some fair approximation of use of airports. Rather their formula is one-size-fits-all, and airports tend to increase the fee as soon as Congress raises the cap (as occurred when Congress increased it from $3 to $4.50). An increase in the PFCs to $34 per person for a single round-trip would not reflect a "fair approximation" of how much in airport facilities a single traveler uses. Rather, it is an arbitrary figure, set as high as can be achieved in a political context (the U.S. Congress).
Second, the PFC levels sought by airports are "excessive" in relation to the benefits conferred, especially given that the PFC, combined with other government taxes and fees, could represent more than 50 percent of the total ticket price! Finally, exorbitant PFC levels may discriminate against interstate commerce if they render air travel economically impractical for some families.
The vexing irony is that the Airline Deregulation Act and innovative airline business models have helped lower airfares, such that air travel is no longer solely the realm of the well-to-do. Congress should not inadvertently return us to those days of yesteryear by interjecting such a high tax burden on air travel that we once again consign large swaths of the traveling public to cars, buses and trains.