Strategic Policy

U.S. Airline CEOs Urge Transportation Secretary Elaine Chao to Oppose a Doubling of the Airport Tax Passengers Pay with the Purchase of Each Flight

February 22, 2018

WASHINGTON, February 22, 2018 – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, today released a letter from the CEOs of six leading U.S. commercial airlines, urging Transportation Secretary Elaine Chao to oppose any attempt to increase the current Passenger Facility Charge (PFC), also known as the airport tax.

In their letter to Secretary Chao, the CEOs of Alaska Airlines, American Airlines, Hawaiian Airlines, JetBlue Airways, Southwest Airlines and United Airlines noted that the Senate Transportation, Housing and Urban Development (THUD) appropriations bill contains a massive tax hike on travelers, simply for using the airport. Nearly doubling the PFC, which is neither justified nor needed, was proposed despite the fact that U.S. airports are in a strong financial position, sitting on billions of dollars in revenue collected from government and airline passengers.

Specifically, in 2016, airports:

• had more than $14.2 billion in unrestricted cash and investments on hand;
• collected record revenues from airline rents and fees and existing PFCs;
• had access to nearly $6 billion in uncommitted funding for airport infrastructure projects in the Airport and Airway Trust Fund (AATF). In addition to these cash streams, over the last decade airlines have partnered with airports on more than $100 billion in improvement projects at the country’s largest 30 airports alone, as well as smaller airports nationwide; and
• diverted over $9 billion off airport to non-aviation related projects.

“We have nearly $6 billion in unobligated funding in the Airport and Airway Trust Fund that could be utilized for airport infrastructure,” states the letter from the CEOs of major passenger carriers, who are also A4A Board of Directors members. “Airlines are committed to making capital improvements in infrastructure alongside our well-funded airport partners, and we respectfully ask for your commitment to solutions that do not involve unnecessary tax increases on the traveling public.”

Contrary to the Administration’s historic tax reform package that provided tax relief to all Americans, the average traveler still pays 21 percent of the total cost of a roundtrip airline ticket to the federal government – the same tax bracket designed to discourage use of so-called “sin products.”