As the connection point between passengers and the sky, airports serve a vital role in fostering competition and providing passengers with the price and service options they demand. Through that important work airports emerge as powerful engines of economic growth for local communities.
While airports embrace competition for the benefit of passengers, the airlines continually reaffirm their opposition to real competition by undertaking policy initiatives that protect profits and maintain control. Do not be fooled by airline rhetoric that claims the airlines are more competitive today than they ever have been. The airlines routinely fight against ideas that would enhance competition through necessary infrastructure investment and expanded carrier options, leaving passengers with limited choices and high airfares. What’s resulted is a race to the bottom in air travel.
Airports exist to provide for the safe, secure, and efficient movement of people and goods. Our airline partners are an important part of that equation. At the same time, airports work to represent the views of local communities within the broader aviation system, and that includes ensuring the most competitive industry possible for the benefit of our passengers, customers, and communities. Through competition, we can improve air travel for everyone, even the airlines.
Passenger Facility Charge
The locally set Passenger Facility Charge (PFC) user fee was designed by Congress in 1992 as a tool to spur infrastructure investment that would create competition among the airlines. Through more efficient and modern facilities, airports would be able to reduce operating costs and attract new service options.
With nearly $100 billion in infrastructure needs over a five-year period, airports across the United States face unprecedented infrastructure challenges. The logjam that exists in keeping vital infrastructure projects moving is directly tied to user fee that has languished for almost 20 years. In fact, airport infrastructure costs have increased more than 32 percent over the last two years. Without action by Congress, costs continue to sky rocket and America’s airports are left further behind.
Each time Congress considers modernizing the PFC to meet current economic conditions the airlines use disingenuous rhetoric to try to stifle investment and competition. Let’s not lose sight on the real reason the airlines oppose the PFC: they want to control airline competition and protect their monopoly status. Without competition, passengers are left holding the bag with higher airfares and limited flight options.
In recent years, international passenger traffic has grown at a rapid clip. The economic opportunity that comes with robust access to international passengers is too powerful to deny. It is estimated that the current Open Skies agreements contribute more than $4 billion in economic benefit to the United States. Eight out of the top 10 international bilateral agreements are Open Skies agreements – if the U.S. were able to implement this type of agreements with all countries, it is estimated that there would be a 16 percent increase in traffic, creating 9 million more jobs in the U.S. That’s why it is important to protect and expand Open Skies agreements with countries around the world. Ensuring access to the global market creates competition. It’s no surprise that many U.S. airlines have tried to diminish the positive impact of Open Skies agreements in recent years.
Airport slot policy should serve consumers’ interests
Airports around the world are categorized based on their congestion level: Level 1, Level 2 or Level 3. Level 2 airports, or schedule-facilitated airports, and Level 3 airports, or slot-coordinated airports, are the most congested, and just over half of the world’s air routes operate at these airports globally.
In North America, the busiest airports tend to see a level of demand that significantly exceed the capacity of their infrastructure, which require the implementation of a schedule facilitation or slot coordination process to ensure that airlines operate as scheduled and to stimulate competition.
- Level 2 airports: Calgary-YYC, Chicago-ORD, Los Angeles-LAX, Montreal-YUL, New York-EWR, Orlando-MCO, Quebec City-YQB, San Francisco-SFO, Seattle-SEA
- Level 3 Airports: New York-JFK, New York-LGA, Toronto Pearson-YYZ, Toronto Billy Bishop-YTZ, Vancouver-YVR, Washington D.C.-DCA
To optimize benefits to consumers and to increase efficiency in the declaration, allocation, and use of scarce airport capacity, the Federal Aviation Administration (FAA) and the Department of Transportation (DOT) should follow global best practices as set forth in the Worldwide Airport Slot Guidelines (WASG). Schedule-facilitation and slot allocation to carriers should serve consumers’ interests and respond to the needs of the traveling public rather than protect incumbent carriers’ historic slot holdings.
ACI-NA and Level 2 and Level 3 airports across North America, with the support of the ACI-NA Slot Task Force, are working collaboratively with regulatory authorities and other stakeholders to align schedule facilitation and slot allocation processes with global practices, with the prime objectives of stimulating competition at congested airports, enhancing transparency of the slot allocation process, and increasing the accountability of all stakeholders, for the benefit of the entire aviation ecosystem.