Donald Trump wants to modernize America’s infrastructure, but someone will have to pay for it.
When it comes to improving America’s airports, it might be passengers who pay more.
A new bill introduced in Congress on Wednesday aims to lift a 17-year-old cap on a fee that’s passed on to passengers for capital projects. The CEO of Dallas/Fort Worth International Airport voiced support for the idea while testifying before Congress on the future of America’s airports.
The bill, introduced by Oregon Democratic Rep. Peter DeFazio, lifts the maximum passenger facility charge, a per-passenger fee that airports may levy to fund infrastructure projects. The fee is currently capped at $4.50 per flight. If the bill passes, airports would have the freedom to charge customers more to pay for upgrades to runways, terminals and gates.
DeFazio argued that his bill is a better solution to infrastructure problems at airports than raising taxes and that infrastructure charges passed on to passengers are much less than the litany of fees airlines already charge customers. The bill has bipartisan support. Kentucky Republican Rep. Thomas Massie is a co-sponsor.
“Those who don’t fly, they don’t have to pay. It’s not coming out of the general fund,” DeFazio said. “Those who do fly benefit from the improvements, and they pay a little bit for a better experience. The president has said he wants to rebuild our airports, they’re horrible, they are in many cases . . . but he also had reservations about fees. But what is better than a user fee for the users of the system to pay?”
He noted that customers still fly despite numerous fees levied by airlines, and the average customer spends $8.50 in bag fees every time they fly.
“But that doesn’t deter anybody from flying,” DeFazio said.
Dallas/Fort Worth airport CEO Sean Donohue said he supported the idea but that large airports like his would find a way to fund needed infrastructure projects and would raise the passenger facility charge only if absolutely necessary.
“The PFC is critical, but it’s not the silver bullet,” Donohue said. “I recognize at DFW, given our size, we are in a position where we will find a way, one way or the other, to fund our infrastructure projects.”
He said Dallas/Fort Worth airport got about $130 million a year from the passenger facility charge, just over 10 percent of the airport’s $900 million a year in revenue. Representatives of smaller airports like Asheville, North Carolina, who testified at the hearing said passenger facility charges occupied a much larger chunk of their budgets.
After the hearing, Donohue indicated that despite his airport’s support for the legislation, it’s unlikely that Dallas/Fort Worth’s passenger fees will be raised in the near future, because of intense competition with other large hubs around the country.
“We’d have to see the details of the legislation,” he said. “If that legislation passed, since two-thirds of our customers are connecting and we compete with other large hubs for connecting customers, we’d be very careful and very smart, if we had leeway, to make sure we don’t become uncompetitive. For example, if we were charging $7 and (Houston’s) Intercontinental was charging $3 or Denver was charging $3 . . . you don’t want to be in a situation where you’re uncompetitive.”
Dallas/Fort Worth’s large passenger base and status as the hub for American Airlines gives the airport more options to fund infrastructure projects, like the recently approved TEX Rail line between Fort Worth and the airport.
“In terms of how we’re funding the TEX Rail coming out, we’re funding that through our joint capital program, just like we did when (the light rail system) DART came out,” Donohue said. “We’re fortunate, we’ve got flexibility and we have many revenue sources to fund projects like this. We’re going to spend about $40 million building that station for TEX Rail.”
Airlines might oppose DeFazio’s effort, as a higher passenger facility charge would result in increased ticket prices. But none of the airport executives who testified Wednesday could provide a solution for increased infrastructure spending that doesn’t result in higher taxes or higher fees when pressed by South Carolina Republican Rep. Mark Sanford.
“What are the alternatives to raising that fee . . . maybe something that’s been done in another country?” Sanford asked.
“Well, from a global perspective, Congressman, certainly there are examples of other countries who from a government perspective support their aviation industry,” Donohue replied, alluding to government-run or subsidized airlines. “I don’t think you’re going down that path, but that clearly happens in other parts of the world.”
Sanford, a noted fiscal conservative, responded with a smile.