In Senate Commerce Committee Hearing Testimony, A4A Says Airport Funding Abundant and
Raising Taxes on Passengers is a Bad Idea
WASHINGTON, April 23, 2015 – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, testified today before the Senate Commerce Committee’s Subcommittee on Aviation Operations, Safety and Security regarding the U.S. airline industry’s commitment to airport infrastructure investment across the country, while stressing that there is no justification for increasing the Passenger Facility Charge (PFC) – Airport Tax – on passengers due to the strong financial condition of U.S. airports.
In her testimony, A4A Senior Vice President, Legislative and Regulatory Policy Sharon Pinkerton cited significant ongoing investments from airlines, and airports’ strong balance sheets, ready access to cash, and access to the bond market, along with a healthy Airport and Airway Trust Fund (AATF) as examples of the abundant resources airports have at their disposal to fund projects today and well into the future.
“Airports across our country are in a very strong financial position, already receiving billions of dollars from passengers and the government alike,” said Pinkerton. “In 2013, U.S. airports collected a record $24.5 billion in revenue – a 52 percent increase on a per passenger basis from 2000 – including $10 billion in airline rents and fees, $2.8 billion from existing PFCs, $8.2 billion in non-airline revenues and $3.4 billion from the FAA’s Airport Improvement Program. The data clearly shows that projects can easily be done without raising taxes on passengers.”
However, despite having more than $11.4 billion of unrestricted cash and investments on hand and a $6 billion uncommitted balance in the AATF, airports are seeking to increase the Airport Tax on travelers by nearly 90 percent. This unnecessary tax increase hits families at a time when air travelers are already paying more than their fair share in government-imposed taxes and fees, currently totaling 21 percent of a typical $300 one-stop, round-trip domestic ticket. The airports’ proposed increase would hike the taxes paid on that same ticket to 26 percent.
“It takes a bit of chutzpah for our airport partners to advocate for a historic tax hike on the traveling public,” said Pinkerton. “Airlines and airports have a history of partnering on significant improvements – since 2008, over $70 billion of capital projects have been completed, are underway or have been approved at the nation’s 30 largest airports alone, and development is robust at smaller airports across the country as well. This funding enabled new runways and terminals, better facilities and more amenities for passengers. All of this investment has occurred without any new taxes.”
In March, A4A launched StopAirTaxNow, a digital resource aimed at enabling passengers to voice their opposition to an increase in the current Airport Tax. Visitors to the website can find useful information about the Airport Tax including the myths behind some of the airports’ key arguments.
According to a survey of 1,000 registered voters, conducted by The Tarrance Group, 82 percent of voters oppose almost doubling the PFC and tying future automatic increases to inflation. Additionally, voters also understand airports have the resources they need to fund projects and believe air travelers are already taxed enough. 65 percent of voters view the PFC as a Tax, not a User Fee. When respondents were told of the airports’ financial condition, 75 percent of voters are less likely to support a PFC increase.
“Airlines strongly support necessary investments in airports across the country,” Pinkerton noted. “We are committed to airport infrastructure projects and believe they can easily be done without increasing taxes. Despite the airports’ hyperbole, the facts clearly show there is not a funding crisis at our nation’s airports.”
Airlines for America (A4A) members are Alaska Airlines, American Airlines, Atlas Air, Delta Air Lines, FedEx, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, United Airlines and UPS. Air Canada is an associate member.
A4A advocates on behalf of the leading U.S. airlines, both passenger and cargo carriers. A4A works collaboratively with industry stakeholders, federal agencies, the Administration, Congress, labor and other groups to improve aviation for the traveling and shipping public.