Building the Runway to Economic Growth
Investing in Airport Infrastructure
Airports are essential to America’s economic success. They have a footprint in every community in America, supporting $1.4 trillion in annual economic output and 11.5 million jobs each year.
The COVID-19 pandemic has devastated airport finances. Passenger levels cratered in 2020, falling as far as 96 percent compared to 2019. Despite a modest bounce back from its lowest level, traffic is not projected to return to pre-pandemic levels until at least 2023, meaning airports face billions in lost revenue over the next several years.
Airport infrastructure suffered from chronic underfunding even before this steep decline in air travelers. Instead of investing in larger, higher-impact projects that would modernize facilities and increase capacity, airports have been forced to prioritize smaller, immediate needs like maintenance of aging structures and systems. Because of this underfunding, airports have a backlog of $115 billion in planned and muchneeded infrastructure projects. There are also tens of billions of dollars in additional projects that have been delayed or canceled due to the pandemic and economic recession.
Airports have been unable to fund all of the large-scale projects they need to meet passenger needs because Congress has not modernized one of the main funding mechanisms for airports in more than two decades. One of the main sources of airport infrastructure funding is the federally capped Passenger Facility Charge, or the PFC: a modest user fee on tickets. Congress last raised the maximum statutory PFC cap twenty years ago — before 9/11 — from $3.00 to just $4.50. In the two decades since then, construction and related costs have risen steadily, meaning that the real value of the PFC — what it’s actually able to purchase — has declined by 40 percent.
Modernizing the PFC cap is the right way to fund infrastructure because it is responsive to local circumstances and traveling trends. An airport in a once-small town experiencing a rapid population boom could set a higher PFC; another airport that’s just completed a major terminal renovation project could set a lower one. And because the PFC is a user fee, not a tax, it is paid only by those who actually use an airport and benefit directly from the improvements it funds.
Modernizing the PFC cap would enable airports to fund projects that would provide concrete benefits for travelers. Projects like replacing aging facilities, expanding new terminals, and improving access to transit can increase airport capacity and throughput, which allows for more competition among airlines, leading to lower ticket prices. The additional revenue from the PFC will also help stimulate the economy through shovelready projects that would put money into the pockets of local workers.
Airports are a community’s gateway to the world, and they can be its gateway to growth as well. Funding infrastructure the right way will inject money into local economies and help all of America keep up with our constantly changing, increasingly interconnected world.
It’s time for Congress to modernize the PFC.