This summer, more people than ever before are taking to the skies. Millions of Americans will head off on vacations, plan trips with family and friends and explore new places. A record-breaking 246.1 million passengers are choosing air travel this summer because they understand there’s never been a better time to fly.
Passenger satisfaction is up and fares are at a historic low. Airline customers are benefiting from an unprecedented combination of choice, competition, access and affordability. This environment drives carriers to innovate, provide new and expanded services and options and allows American air travelers to customize their travel experience and make the most of their time.
The airlines have a vested interest in providing the best possible service to passengers. The largest airlines are, as they have always been, competing with each other every day. Couple that with the emergence and popularity of smaller, primarily low-cost carriers and ultra-low-cost carriers and it is plain to see there is no shortage of competition. Analysis conducted by economists at Compass Lexecon shows that the state of nationwide airline competition has intensified in recent years, with more – not fewer – choices when traveling from one city to another. This positive trend is alive and well as a wide array of carriers are ramping up competition and entering even more markets, helping to keep fares low while providing more options for passengers. Simply put, the market is working, and the industry is more competitive than it has ever been.
Operating in a very competitive space is good for the airline industry, and it’s good for consumers. Enabling multiple players to compete fosters airline investment in everything from new aircraft to new technology and amenities to improving our nation’s airports. And, passengers are about to benefit from even more competition according to media reports indicating that a new airline is being formed. Air travel begins and ends at airports, which is why, since 2008, airline-airport collaboration has led to more than $130 billion of capital improvement projects being approved, underway or completed at the nation’s 30 largest airports alone.
Today’s travelers are highly price-sensitive and consistently rank affordability as the most important factor when booking a ticket. Padding airport coffers by burying an unneeded tax hike in the price of an airline ticket would make travel more expensive for families and businesses.
What ties these important improvement projects together, aside from the success that airlines and their airport partners have been able to achieve collaboratively, is that they were all funded without implementing an airport tax hike.
On a typical $300 domestic airline ticket, each passenger spends $64 dollars on taxes and fees. To some who lobby on behalf of airports, that number isn’t high enough. They want to raise the Passenger Facility Charge (PFC) – a tax paid just to travel through an airport. In 2017, U.S. airports generated a record $3.3 billion in PFC revenue, yet some proposals call for that tax to nearly double. For a family of four traveling from Los Angeles to Washington, D.C., making one stop each way, that could mean up to $26 per passenger in PFCs alone. That family of four would be spending $104 just on PFCs for that trip.
Those who are calling for an increase in the airport tax have consistently tried to convince Congress to raise taxes on passengers. Each time this issue has come up, regardless of the party in power, it’s been rejected.
American air travelers don’t want this tax increase. They can’t afford this tax increase. And airports don’t need this tax increase.
Airports are not being left behind or left out in the cold when it comes to infrastructure improvements; in fact, they were generously given $1 billion in the recent omnibus bill – in addition to the $3.35 billion Congress authorized in Airport Improvement Program funding. Airports have not been able to identify a single airport project that hasn’t been completed because the PFC wasn’t increased. Airports enjoy access to $14.2 billion in unrestricted cash, are supported by the Airport and Airway Trust Fund, which has an uncommitted balance of $6 billion, and collected a record breaking $3.3 billion in PFCs alone in 2017. Those PFC collections are more than double what was collected in 2000 and growing more than twice the rate of inflation.
Independent surveys, like one published in May by J.D. Power, show airline customer satisfaction having risen for the seventh consecutive year. Fares declined in each of the last three years and are at a historic low. A record number of people are going to fly this summer, and more people are choosing air travel than ever before. There truly has never been a better time to fly. The airline industry is taking off, driven by competition that inspires more flights, more options, more services and more affordable travel for American families. Airports shouldn’t undermine that by asking for passengers to pay even more in airport taxes.
Rebecca Spicer is the Senior Vice President of Communications at Airlines for America (A4A). She previously worked at the National Beer Wholesalers Association, in the George W. Bush White House and at WJLA-TV.
