Association News

A4A Calls Proposed PFC Hike wasteful and unnecessary.

Press Release Summary:

Mar 20, 2014 - Responding to rationale for Passenger Facility Charge (PFC) hike derived from FAA long-term forecast, Airlines for America's (A4A) Sharon Pinkerton called the move "a revenue grab." U.S. airports have ample resources to fund capital needs. These include investment-grade credit, "ample access" to bond market, $10.6 billion in unrestricted cash and investments (282 days of liquidity), and $4.7 billion in uncommitted funds from federal Airport and Airway Trust Fund.

Airlines for America - Washington, DC

Original Press Release

A4A Calls Proposed PFC Hike Wasteful, Unnecessary

Press release date: Mar 13, 2014

Says Passengers Should Not Be Further Burdened

FAA’s long-term forecasts not reliable indicator; airlines still carry fewer passengers than in 2007

WASHINGTON – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, today slammed suggestions that the Federal Aviation Administration’s (FAA) long-term forecast gives airport groups rationale for a Passenger Facility Charge (PFC) hike.

Airlines remain opposed to a PFC hike because U.S. airports have ample resources to fund their capital needs. Unlike U.S. airlines, U.S. airports enjoy investment-grade credit, remain financially sound and have ample access to the bond market to fund capital project needs. U.S. airports collected nearly $24 billion in revenues in 2012 – a 59 percent increase from 2000 – while airline operations declined 12 percent over the same timeframe. In addition, there are ample cash resources to support future airport improvements. U.S. airports have $10.6 billion in unrestricted cash and investments on hand or roughly 282 days of liquidity. Furthermore, the federal Airport and Airway Trust Fund has $4.7 billion in uncommitted funds.

“PFC collections are nearing record levels set in 2006 while airlines are still carrying fewer passengers than they did in 2007," said Sharon Pinkerton, A4A Senior Vice President, Legislative and Regulatory Policy. “This is not a revenue issue; there are more than adequate funds. This is a revenue grab, for which airline passengers should not be liable.”

Because FAA forecasts have been less than reliable when looking at the long-term, airlines and airports should not solely rely on these forecasts to justify any long-term capital decisions. In the latest forecast, FAA projects that one billion passenger enplanements threshold is to be realized in 2027.

Pinkerton added, "If we had taken the FAA forecast at face value in 1995, for example, we would have seen one billion passengers in 2008. Instead, FAA says U.S. carrier enplanements were 739 million in fiscal year 2013.”

Annually, commercial aviation helps drive more than $1 trillion in U.S. economic activity and more than 10 million U.S. jobs. A4A airline members and their affiliates transport more than 90 percent of all U.S. airline passenger and cargo traffic. America needs a cohesive National Airline Policy that will support the integral role the nation’s airlines play in connecting people and goods globally, spur the nation’s economic growth and create more high-paying jobs.

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