Thursday, April 26, 2018
Business

Tampa Bay area airports push for increase in passenger fee

TAMPA — It costs $5 to print a boarding pass, $35 to check a bag and $200 to change planes.

And you may not know it, but it also costs $4.50 per airline ticket just to use Tampa International Airport.

That last charge may almost double by the end of the year.

That's not a huge amount. But as travelers continue to gripe about add-on charges for flying, the proposed hike has pitted airports and airlines against each other.

Airports and tourism boosters are pushing to raise the fee to help pay for airport improvement projects like the $953 million renovation at TIA. Congress is expected to weigh raising the "passenger facility charge" — a fee placed on travelers currently capped at $4.50 per airplane ticket — to $8.50 as a part of the Federal Aviation Administration's federal funding renewal, which is scheduled to be discussed next month.

But airlines say enough is enough with the fees.

Some — including Tampa International CEO Joe Lopano — find that ironic.

"Airlines are opposed because they think people will avoid air travel because of the additional charge. That's absurd when we have airlines that charge you to print your boarding pass, check your bag, pick your seat and pay extra to sit in an exit row," Lopano said.

A group called Airlines for America has started an online petition to get consumers to send letters to Congress opposing the increase of what they're calling the "airport tax."

"The proposed increase in the PFC is just another tax increase that the government is trying to force on consumers who already pay too much in taxes when they fly. Airport and airlines work together to provide demand-driven airport development that avoids burdening travelers with additional taxes. Let's stick with what works and keep the PFC precisely where it is," said United Airlines chairman, president and CEO Jeff Smisek, who is also the chairman of the Airports for America board of directors, in a statement.

Passenger facility charges are user fees that travelers pay when flying in or out of a specific airport. Local aviation authority boards decide how high a fee to place on passengers, but right now it can't exceed the $4.50 cap. Both TIA and St. Pete-Clearwater International Airport have maxed out PFC fees at $4.50 per passenger.

Airlines collect the PFCs when tickets are booked and keep a small portion of it.

Airport officials like Lopano and St. Pete-Clearwater International director Tom Jewsbury are in favor of the spike, which would benefit their airports.

Tampa International collected $34.1 million in PFCs in 2014 and is projected to raise about $36.2 million for 2015. A budget proposal for 2016 shows that the airport anticipates receiving $37.3 million in PFC funding next year. The rising costs are attributed to the increasing number of passengers the airport is seeing year over year.

"Aviation is so dominant in other parts of the world, like Dubai, Singapore and Korea, where their airports are far more modern and efficient. They see the value in investing in infrastructure," said Frederick Piccolo, chair of the world governing board of Airports Council International, a group that has been pushing for increasing the PFC at U.S. airports for years. "In the U.S., our airports are old and falling. By increasing the fee, it would at least get us back to where we were 15 years ago."

Piccolo is also the president and CEO of Sarasota Bradenton International Airport.

Airports began collecting PFCs in 1990, and are allowed to use the money for property projects that enhance safety, provide opportunities to expand terminals, increase airline competition or reduce noise. PFC money can't be used on capital improvement projects that will generate new revenue for airports, like parking garages or in terminal areas used for concessions. The FAA regulates the use of PFC money.

"The PFC, to my knowledge, is the only tax in the history of man that can't be hijacked by a politician. It has one purpose, which is to improve airports and is specifically monitored to make sure it does that," said Michael Boyd, CEO of Boyd Group International, an aviation consulting firm based in Colorado.

At Tampa International, PFC money has been used to help pay for a $133 million renovation of airside terminal C in 2005. It will help pay for the people mover shuttle and some taxiway pavement reconstruction coming online in 2017, said Janet Zink, a TIA spokeswoman.

PFC policies haven't been updated since 2000, when legislation changed to boost the maximum fee from $3 to $4.50.

"Basically, airports are being defunded by not increasing PFCs because of inflation," Lopano said. "The buying power of $4.50 in 2000 is nowhere the same as in today's world."

The U.S. saw a 2.24 percent annual increase in inflation from 2000 to 2015, according to the U.S. Bureau of Labor Statistics. So $4.50 in 2000 equates to about $6.28 in 2015.

PFC funding stands to benefit smaller to mid-sized airports rather than the larger ones because their costs are lower and the money tends to stretch further, Boyd said.

"Tampa is a big, powerful airport. The smaller airports that are growing and don't generally get a lot of access to funding benefit from PFCs the most," he said. "It can help them build new terminals for new airlines."

That would include the St. Pete-Clearwater airport, which has reported record-breaking growth this summer thanks to the addition of new destinations from its dominant carrier, Allegiant Air.

St. Pete-Clearwater collected $2.8 million in PFC funding in 2014 and anticipates receiving close to $3.5 million this year. In 2013, the airport received $2.1 million. So far, the fees have helped improve taxiways and various terminal updates, said Jewsbury, the airport's director.

"If the PFC increased, it would allow us to accelerate plans we have for future projects that could help us accommodate additional traffic and add to the number of gates we have," Jewsbury said.

Airline lobbyists expect Congress' discussion about the FAA reauthorization to be extended, and it's likely a change in PFCs won't happen before the end of the year.

"One day, we'd rather see that there's not a limit on PFCs at all and that airports impose their own fees locally," Piccolo said. "Airlines have to decide how to price their fares based on the marketplace, and airports can do the same."

Contact Justine Griffin at [email protected] or (727) 893-8467. Follow @SunBizGriffin.

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