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Carriers pull back on tax-related fare hikes

Carriers pull back on tax-related fare hikes

Major carriers are reported to be pulling back on the fare increases that they substituted for aviation taxes during the FAA partial shutdown. President Obama on Friday signed a short-term FAA bill that extends aviation programs and excise taxes through Sept. 16. In order to avoid another partial shutdown, lawmakers will need to pass a multi-year bill or another short-term extension in the next six weeks. That will not give negotiators much time since Congress is in recess through Labor Day. Estimates are that the Airport and Airway Trust Fund lost nearly $400 million in aviation taxes during the shutdown. AAAE said this is a clear sign of the need for Congress to reconsider airport proposals to raise the cap on PFCs as part of ongoing discussions on FAA reauthorization legislation. The association noted that airports were able to utilize local PFC revenue for critical upgrades during the shutdown, providing much needed certainty during a time of great uncertainty. "A long-overdue PFC increase would provide airports with the 'self-help' they need to make the necessary investments in our national aviation system at a time when the federal government's ability to do so has never been in greater doubt," AAAE President Charles Barclay said. "Airports can and will do our part to responsibly meet the needs of our aviation system, but we need additional tools to do so, especially in light of the dramatic changes unfolding around us." Neither the House-passed nor the Senate-passed multi-year FAA bill includes a PFC increase. AAAE, in a letter to key lawmakers, has suggested that if Congress is unwilling to raise the cap immediately, it should include a "trigger" provision in the bill that would automatically raise the PFC cap if AIP funding dips below a certain level.

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