PRESIDENT’S 2016 BUDGET INCLUDES PROPOSED INCREASE IN PASSENGER FACILITY CHARGE
March 2, 2015
A proposal in President Obama’s 2016 budget would increase the Passenger Facility Charge (PFC), which is used to help fund airport improvement projects. PFCs have been capped at $4.50 since 2000 and generated $2.8 billion in 2013. The President’s proposal would raise the maximum PFC to $8 per traveler per flight segment, which would result in and additional $2.3 billion in 2016 revenue.
Travel industry trade groups and airport operators support the proposed increase, arguing that airport improvements are needed and such improvements will boost the travel industry. To wit, Airports Council International-North America (ACI-NA) reported a backlog of $15.14 billion in airport improvement projects to date.
U.S. carriers oppose the increase, arguing it would discourage travelers from flying. Airlines for America said “…consumers are very price sensitive when it comes to air travel, an unnecessary tax increase will reduce demand.” The trade group added that an increase in PFCs would set back job growth, have a negative impact on tourism because of decreased demand and possibly limit air service to small communities.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).