AirportInfo. Passenger Facility Charge

Size: px

Start display at page:

Download "AirportInfo. Passenger Facility Charge"

Wesley Hardy
6 years ago
Views:

1 AirportInfo Passenger Facility Charge May 2014

2 PFC A Cornerstone of Airport Capital Programs PFC user fees were first authorized by Congress in 1990 and are tied directly to local airport projects that: Preserve or enhance safety, security and capacity of the national air transportation system Reduce noise from an airport that is part of the system, or Provide opportunities for enhanced competition between or among air carriers. The PFC ceiling of $4.50 was last set in 2000, and its purchasing power has been cut in half. A PFC of $8.50 is needed to restore the PFC purchasing power, the equivalent of $4.50 in This would provide airports the ability to raise money locally to fund critical infrastructure needs. PFC user fees have resulted in over $50 billion in airport capital investments since implementation in 1990, allowing for the construction of new runways, taxiways and terminals and benefiting passengers. Source: ACI-NA 2

PFCs Are Mostly Used to Fund Terminal and Security Projects and Pay Debt Service Access 6% Noise 4% Interest 34% Terminal and Security 34% Airside 18% New Denver* 4%

3 PFCs Are Mostly Used to Fund Terminal and Security Projects and Pay Debt Service Access 6% Noise 4% Interest 34% Terminal and Security 34% Airside 18% New Denver* 4% *New Denver: $3.1 billion for initial construction of new Denver includes over $1.8 billion in interest costs Source: FAA Approved PFC by Categories as of April 1,

expansion, and rehabilitation) projects account for 88 percent of total PFC landside projects,

4 Distribution of PFC Landside Projects Terminal - Other 20% Land 4% Security/Other 8% Terminal - Expansion 24% Terminal - Rehabilitation 16% Terminal - New 28% Terminal (new terminal, expansion, and rehabilitation) projects account for 88 percent of total PFC landside projects, with $26.6 billion been approved for these projects as of April 1, Source: FAA, as of March 31,

Distribution of PFC Airside Projects Planning 4% Equipment 9% Lighting 3% Other 8% Runways 46% Land 4% Aprons 11% Taxiways 17% Runway projects account for 46

5 Distribution of PFC Airside Projects Planning 4% Equipment 9% Lighting 3% Other 8% Runways 46% Land 4% Aprons 11% Taxiways 17% Runway projects account for 46 percent of total PFC airside projects, with $7.2 billion approved as of April 1, 2014 followed by taxiway projects of $2.6 billion. Source: FAA, as of March 31,

6 PFC & AIP are Used to Fund Different Types of Projects Due Largely to Differing Eligibility Requirements Distribution of PFC Approvals & AIP Grants by Project Type (FY08-12) 80% 70% Percentage of PFC 70.3% Percentage of AIP 60% 50% 40% 30% 43.2% 31.2% 20% 10% 0% 16.9% 11.2% 10.8% 6.8% 6.7% 1.1% 1.9% Interest on Bonds Terminal/Security Airside Roads/Access Noise State block grants Source: 2013 Financing Airport Improvements Report, Congressional Research Service. 6

7 PFCs Imposed by Most Airports at $ Number of Airports Imposing a PFC by Level $3.00 or Below $4.00 or $ Source: FAA PFC Branch, as of January 1 of each year. 7

8 The $4.50 PFC Should be $8.50 with Construction Cost Indexing (CCI) Airport Focus CCI Infation Adjusted $4.5 PFC $4.5PFC Deflated with CCI $10.00 $9.00 $8.46 $8.71 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $2.43 $2.36 $1.00 $0.00 Note: 1. The $3 PFC was enacted in 1990 and the PFC cap was lifted to $4.50 in Historical Engineering News Record construction cost index was used to make inflation and deflation adjustments; forecast is based on IHS Global Insight. Source: ACI-NA, as of April 2,

9 PFC Future Collections Obligated to Projects PFC Collections by Year (in Billions) Total PFC approved collections as of April 1, 2014 amount to $88.2 billion, of which $41 billion has been collected. The remaining $47.2 billion in future collections have been committed to pay for existing or completed projects. Source: FAA PFC Branch, as of April 1,

10 No. of Airports 80% of PFCs are Pledged for Existing or Completed Projects for up to 20 Years (41.0%) 144 (39.7%) Source: FAA 48 (13.2%) 18 (5.0%) 4 (1.1%) 0-10yrs 11-20yrs 21-30yrs 31-40yrs 41-50yrs Length of pledge 10

11 Increase Local PFC to Modernize Airport Infrastructure and Create Jobs Existing PFC user fees are being used to fund airport safety, security, capacity, noise and competition projects that have been completed or are currently underway. It will take close to 17 years on average to collect the necessary PFC user fees pledged to pay for existing projects that have been approved by FAA. PFC user fees are often used on a leveraged basis for airport bonds, with current low interest rates allowing infrastructure to be modernized or enhanced on a very cost effective basis. An increased local PFC user fee would still be much smaller than airline fees for checking bags and would provide long-term customer service benefits for passengers. Source: ACI-NA 11

12 AirportInfo May 2014 Contact: Economic Affairs and Research Tel:

AirportInfo. Airport Improvement Program

AirportInfo. Airport Improvement Program AirportInfo Airport Improvement Program April 2014 Airport Improvement Program (AIP) AIP provides grants to airport sponsors for the planning and development of public-use airports. To be eligible for