US airports tussle with airlines over proposed fee hike

Washington DC
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The American Association of Airport Executives (AAAE) has hit back at US airlines opposing a proposed hike to the passenger facility charge collected by the country's airports.

AAAE president and CEO Todd Hauptli singles out the ancillary revenues US airlines have netted in recent years, saying: "The US airline industry has made an art form out of extracting billions of dollars in revenue from their customers for the privilege of checking a bag or for any number of other services that were once part and parcel with an airlines ticket charge, and yet they profess outrage that airports would seek a fraction of the amount they collect to enhance safety, security, efficiency and convenience at their facilities through a modest increase in the federal cap on local fees."

The AAAE is lobbying the US Congress to raise the cap on the passenger facility charge to $8.50 from the existing $4.50 level, with periodic adjustments to take into account inflation.

Airline trade association Airlines For America (A4A) said in March that this proposed hike is wasteful and unncessary. A4A said then that US airports have "ample resources" for their capital needs, adding that airport's revenues have gone up while airlines' earnings have declined.

AAAE says today that US carriers are increasingly reliant on ancillary revenues, which the association says are not taxed in the same manner as airfares are. Taxes from domestic airfares and other sources go into the US Federal Aviation Administration's Airport and Airway Trust Fund, which helps to fund the agency's activities.

"The shift in the airline pricing model away from ticket price increases to a greater reliance on ancillary fees effectively shortchanges the Airport and Airway Trust Fund of revenue that would otherwise support airport and aviation system improvements," says the AAAE.