Issues
Modernize the Passenger Facility Charge Program
We urge Congress to eliminate the outdated federal cap on the locally set Passenger Facility Charge (PFC) user fee.
America’s airports are powerful economic engines in their communities, generating more than $1.1 trillion in annual activity and supporting more than 9.6 million jobs. Passenger traffic through airport facilities was at an all-time high in 2015, and enplanements are on track to set a new record in 2016. Unfortunately, our antiquated aviation infrastructure cannot keep pace with this overwhelming demand. As a result airports across the country are overcrowded and cramped.
Congress can help airports meet the infrastructure needs of today and challenges of tomorrow by simply eliminating the outdated federal cap on local Passenger Facility Charges (PFCs). At virtually no cost to the federal government eliminating the federal cap on the PFC would restore the PFC’s lost purchasing power and provide airports with the ability to set their own levels based on locally-determined needs to ensure the continued safety, security, and improvement of their facilities.
Airports Have Tremendous Unmet Needs
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Airports of all sizes need over $15 billion annually in infrastructure improvements to renovate aging runways and terminals, relieve congestion and delays, improve safety and security, and spur new airline competition – far more than the approximately $6 billion that airports receive each year from both local PFCs and federal grants.
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Airports were not designed to accommodate the record number of passengers we see today. In an ever-evolving threat environment upgrading our aging aviation infrastructure can enhance security, improve passenger flow, and optimize queue management.
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Unfortunately, airports lack stable, predictable funding sources that keep pace with rising construction cost inflation for these intensive capital projects. The PFC cap – last adjusted in 2000 – has seen its purchasing power has eroded by 50 percent. And federal airport grants have been stagnant in recent years.
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Moreover, many airports – even those with sterling credit ratings – have reached their debt capacity and either cannot finance new projects or have had to phase in their projects over a longer timeframe, increasing the costs, and delaying the benefits for passengers.
Rebuild Our Airports Without Raising Taxes Or Debt Spending
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We can rebuild America’s airports without raising taxes or through deficit spending by eliminating the anti-competitive federal cap on local PFCs
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PFCs are not taxes – they are local user fees that are determined locally and used locally to improve the passenger experience and spur airline competition. Not one dollar of PFC revenue flows to the federal treasury. Instead, PFCs go directly to fund local airport projects approved by the FAA with input from airlines and local communities.
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It is time to get Washington out of the way of local airport investment decisions. By eliminating the anti-competitive federal cap on PFCs airports can become more financially self-sufficient.
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At a time when there is mounting pressure to reduce federal spending eliminating the federal government’s PFC cap is the most free-market option for providing airports with the locally controlled self-help they need to finance vital infrastructure projects.
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Eliminating the federal government’s PFC cap would allow airports of all sizes to reduce costs and start building essential infrastructure projects more quickly.
Airport Investment Promotes Much-Needed Competition
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New investments in airports can be valuable tools in helping local communities attract new air carriers, which increases competition and can lead to lower airfares for passengers.
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Airports – many of which are tapped out on their ability to bond in a financially responsible manner – need additional resources to build the terminals, gates, and ramps necessary to attract new air carriers and entice existing ones to expand service.
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The traveling public gets more choices and lower airfares when airports can build the facilities that provide more airline options and more service alternatives.
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One study estimates that passenger fares are $4.4 billion higher annually due to the lack of available gate space at airport terminals. Eliminating the federal cap on local PFCs would provide airports with the funds necessary to build the appropriate amount of space needed to attract new competition and upgrade aging facilities.
Protect the Airport Improvement Program
We urge Congress to fully protect the federal Airport Improvement Program (AIP).
AIP finances critical safety, security, and capacity projects at large, medium, and small airports across the country. Full federal funding for airport infrastructure projects is particularly important at a time when airports are artificially constrained from generating more local revenue from Passenger Facility Charges, which currently are capped at $4.50.
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AIP is a critical source of funding for airports of all sizes.
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Small airports around the country particularly rely on the federal program to fund critical projects at their facilities such as constructing and repairing runways, taxiways, and other airfield projects.
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Large airports also depend on AIP funding – including discretionary funds and money distributed through the Letter of Intent Program – to help pay for large capacity-enhancing projects.
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The FAA estimates that there will be $42.5 billion in AIP-eligible projects between 2013 and 2017 or approximately $8.5 billion per year. The annual average is more than twice the $3.35 billion that Congress approved for AIP funds in Fiscal Year 2014.
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Despite enormous capital needs there has been downward pressure on AIP funding. In 2013, Congress diverted $253 million in AIP funding to end controller furloughs and to keep 149 contract towers open in the face of sequestration-related cuts.
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Fortunately, as a result of the Bipartisan Budget Act of 2013, Congress provided full funding for AIP in Fiscal Year 2014. We urge Congress to fully authorize AIP again at $3.35 billion and to ensure that those funds are not diverted for FAA operations.
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It is important to note that the AIP program is supported entirely by users of the aviation system and no general fund revenues are used for AIP grants.
Maintain and Expand Tax-Exempt Financing Options for Airports
We urge Congress to preserve and restore tax-exempt financing for airport bonds.
Airports strongly support maintaining the tax-exempt status of municipal bonds and eliminating the Alternative Minimum Tax (AMT) burden on Private Activity Bonds (PABs).
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Airports need continued access to low-cost municipal financing without additional tax burdens.
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Retaining the tax exemption for municipal bonds while eliminating the AMT burden on PABs is yet another way Congress can help airports finance critical infrastructure projects without federal funds.
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Airports frequently turn to the capital markets to finance long-term construction projects. Airports are unique in the transportation bond marketplace because they use both general obligation municipal bonds as well as PABs.
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The continuation of tax-exempt bonds and access to PABs that are not subject to the AMT are necessary for not only low cost financing but also for the ability of airports to raise the funds necessary to meet their capital needs.
Support Small Community Air Service Programs
We urge Congress to fully fund the Contract Tower, Essential Air Service (EAS), and Small Community Air Service Development Programs. These programs enhance aviation safety and help small communities maintain and attract new commercial air service. Congress also should examine the emerging pilot shortage issue, a problem of growing urgency that is impacting air service frequency and reliability at smaller communities across the country.
Contract Tower Program: Airports urge Congress to provide $149 million in dedicated funding for the Contract Tower Program, including $9.5 million for the Contract Tower Cost Share program.
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Currently, 252 airports in 46 states participate in the Contract Tower Program, which nationwide handles approximately 28 percent of control tower operations.
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The safety, cost-effectiveness, and air traffic efficiency record of the program has been validated numerous times by the U.S. Department of Transportation’s Office of Inspector General and FAA safety audits.
Essential Air Service Program: Airports urge Congress to fully fund the EAS program, which ensures that people who live in rural and less populated areas continue to have access to our national aviation system.
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The EAS program has been the cornerstone of small community air service since the airline industry was deregulated in 1978. Without this critical program, a large number of small communities simply would no longer have commercial air service.
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The EAS program currently provides payments to air carriers that serve approximately 160 small communities. EAS funding comes from a combination of revenue from the Airport and Airway Trust Fund and overflight fees collected by the FAA.
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During consideration of the last FAA reauthorization bill and accompanying short-term extensions, Congress ushered in a number of EAS reforms and tightened eligibility requirements. The FAA bill also capped the number of communities that are allowed to participate in the program.
Small Community Air Service Development Program: Airports recommend that Congress continue to invest in the Small Community Air Service Development Program, which allows small communities to leverage federal and local resources to attract new commercial air service.
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Since Congress created the Small Community Air Service Development program in 2000, it has helped numerous small communities around the country suffering from insufficient air service or unreasonably high fares.
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According to the U.S. Department of Transportation, small communities that are selected to participate in the program use funding for a variety of purposes “including revenue guarantees to backstop new air service, air service development studies, start-up cost offsets to help attract new airlines, and marketing support to improve usage of the airport.”
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The last FAA reauthorization bill authorized $6 million annually for the program. Funding for the Small Community Air Service Development Program comes from the Airport and Airway Trust Fund as well as significant local contributions.
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At a time when the pilot shortages have impacted an increasing number of small communities, it is imperative that Congress continue to invest a relatively small amount of money into a program that helps small communities secure commercial air service.
Make Useful Investments in the NextGen System
We urge Congress to implement NextGen technology and systems wisely in order to create greater efficiencies in the aviation system.
Many airports – particularly those in areas of urban congestion, challenging terrain, or trying weather – are near or beyond their design capacities, leading to high delays, reduced levels of customer service, and significant adverse economic impacts. These airports act as bottlenecks on the entire national air transportation system. Eliminating these bottlenecks – in part through NextGen improvements – is essential to all of us that travel or ship goods by air. However, to achieve these benefits it is critical that Congress and the FAA prioritize the rollout of NextGen programs and allow airport operators to have a seat at the table from inception to implementation of these capabilities.
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Airports of all sizes are eager to realize the benefits of NextGen capabilities to provide safety and environmental benefits as well as billions of dollars in efficiency savings – from large hub airports where NextGen promises to enhance airfield and airspace capacity and efficiency to non-hub and general aviation airports where NextGen promises to improve airspace access and reduce needs for conventional ground-based navigational aids.
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NextGen capabilities critical for airports include Required Navigational Performance (RNP)/Area Navigation (RNAV) flight procedures, improved surface management systems, and technologies that enhance all weather access to airports.
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Airport operators – who know the communities they serve best – must be involved in the development of all levels of NextGen in and around their airports. From inception to implementation, airports should be part of the entire NextGen process to ensure the appropriate consideration of operational impacts, noise impacts, and other environmental impacts on the airports and their surrounding communities.
Enhance Flexibility to Mitigate Environmental Impacts at Airports
We urge Congress to evaluate and implement cost-effective methods for a more environmentally friendly aviation system.
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Increase opportunities to expand sustainability efforts at airports.
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Streamline National Environmental Policy Act requirements.
Aviation forecasts continue to predict robust growth for the aviation industry, increasing attention on the environmental impacts of aircraft and airport operations. Several studies indicate that the environmental impacts associated with predicted growth in air travel demand may offset the environmental benefits already achieved. Understanding these concerns, airports continue to take proactive steps to better understand and mitigate those impacts to the natural environment and local community. Since much of the impact is outside an individual airport’s control, organizations like ACI-NA, AAAE, and our members are working collaboratively to influence international, federal, and state/local governments, airplane manufacturers, and airlines to respond to these environmental concerns.
Reduce Passenger Wait Times for International Arrivals
We urge Congress to reduce passenger processing wait times at international airports through staffing adjustments and technology deployment.
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Support additional U.S. Customs and Border Protection (CBP) staffing and ensure the deployment of those staffing resources to international airports.
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Expand the utilization of existing and enhanced Automated Passport Control (APC) equipment and other technologies.
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Promote and expand ongoing airport initiatives, such as Mobile Passport Control (MPC), aimed at facilitating more expeditious passenger processing.
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Pursue process changes that could better utilize CBP non-law-enforcement resources.
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Continue dialog with airport community to ensure focus remains on reducing passenger processing times.
All too often passengers arriving on international flights experience exceptionally long delays when being processed by CBP. Long wait times are discouraging international passengers from traveling to the United States and are having a significant negative impact on our economy and employment. To correct this situation, airports continue to urge Congress to provide CBP with the resources it needs to hire additional officers and fund technological solutions, like APC and MCP, to reduce peak wait times by 50 percent and process passengers within 30 minutes. Airports also encourage the federal government to continue to support trusted traveler initiatives, such as Global Entry.
Prohibit Cost-Shifting to Airports for Federal
Security Responsibilities
We urge Congress to reject ongoing efforts by the Transportation Security Administration (TSA) and other federal agencies to shift federal responsibilities and costs to local airport operators.
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Under permanent law, exit lane staffing is the responsibility of TSA at the 155 airports at which it performed those duties on December 1, 2013, and the agency must not be allowed to interpret the statute in a narrow way that effectively shifts exit lane staffing responsibility and costs to airport operators.
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TSA should adequately reimburse airports for the costs associated with meeting federal duties and requirements under the local law enforcement officer reimbursement program.
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Congress must reject future efforts to shift other federal security functions and costs onto airport operators.
In the face of ongoing budget constraints, the TSA and other federal agencies have attempted to shift federal responsibilities and costs to airport operators. Exit lane staffing and local law enforcement officer reimbursement are but two recent examples in which this has occurred. Congress, as part of the Bipartisan Budget Act of 2013, took affirmative action and confirmed in permanent law that exit lane staffing is the responsibility of TSA. Unfortunately, the agency now appears to be taking a creative interpretation of the statute, which has impacted ongoing infrastructure upgrades at airports. TSA has also steadily reduced the amount of money it is willing to reimburse airports for the performance of federal law enforcement functions conducted by local law enforcement authorities.