Airlines slam ‘secret tax hike’ on plane tickets backed by Sen. Reed

Supporters say fee increase needed to fund infrastructure projects at airports

PROVIDENCE, R.I. (WPRI) – The head of a trade group that represents the nation’s airlines is criticizing a bill co-authored by U.S. Sen. Jack Reed, arguing it could nearly double a mandatory fee added to plane tickets.

The group, Airlines for America, said the spending bill – approved Tuesday by the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development – would raise the cap on the so-called Passenger Facility Charge (PFC) added to plane tickets from its current level of $4.50 to $8.50. The group decried it as a “secret tax hike.”

“Airline passengers already pay over $20 billion a year in taxes for the tickets they purchase,” Nicholas Calio, the airline group’s president and CEO, said in a statement. “Adding another $3.2 billion tax hike on American travelers simply cannot be justified.” He urged senators to remove the fee increase from the final spending bill, and noted the text of the bill was still not available to the public.

Reed is the top Democrat on the transportation subcommittee, and generally works closely with its Republican chairwoman, Maine Sen. Susan Collins, to craft annual spending bills. His office had no immediate comment on the criticism. (The bill was approved at the same hearing where the pair were overheard on a hot mic criticizing President Trump.)

“The bill gives airports, states, and local governments the option to adjust their PFCs if they decide that’s what meets their needs,” Reed spokesman Chip Unruh said. “None of the money is collected or spent by the feds. The U.S. Treasury never sees a cent.”

Airports including T.F. Green in Warwick use revenue from the PFC to fund infrastructure projects at their facilities. The American Association of Airport Executives, which represents airports, praised the proposed increase in a statement issued by its president and CEO, Todd Hauptli.

“Chairman Collins and Ranking Member Reed are providing real leadership and meaningful action to give airports the tools they need to upgrade aging airport facilities, enhance competition, invest in the future, and create quality American jobs,” Hauptli said.

A spokesman for the airport group also noted the PFC cap has not been increased since 2000, and said the airlines are wrong to call it a “tax,” describing it as a user fee administered by the Federal Aviation Administration that goes directly to local airports. He also said the Collins-Reed proposal would only allow the fee to be increased at originating airports, not for transfers.

The PFC increase is part of the broader $60-billion annual spending bill for federal transportation and housing programs approved by the committee Tuesday.

“This bipartisan bill is the product of considerable negotiation and compromise, and makes the necessary investments in our nation’s infrastructure, helps to meet the housing needs of the most vulnerable among us, and provides funding for economic development projects that create jobs in our communities,” Collins said.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook