24 Jul 2015

Bill threatens to slash airline bag fees to $4.50

Airlines would be allowed to charge you no more than $4.50 to check a bag under a House bill introduced this week, slashing a fee that averages about $25 at most U.S. carriers.  
The proposed cap in Rep. John Mica’s legislation isn’t arbitrary. It matches the current passenger facility charge (PFC) assessed on an airline flight and introduces a new wrinkle in the congressional fight over reauthorizing the Federal Aviation Administration. The agency’s funding expires Sept. 30, and its reauthorization is a perennial source of fierce Washington lobbying involving a wide array of travel interests.
Mica, a Florida Republican whose district runs north of Orlando, has been working to increase funding for airports. In May, he released a report (pdf) arguing for greater investment to increase airport capacity in runways and terminals and warning of a “meltdown” at major airports during peak travel periods. The facility charges can total $18 on a round-trip flight, with two $4.50 PFCs allowed on a one-way trip or four for a round-trip, and added up to $2.8 billion in 2013.
"What’s good for the goose is good for the gander," Mica, a former chairman of the House Transportation Committee, said Wednesday in a press release announcing his effort to tie bag fees to airport user charges.
As part of the FAA funding debate, Mica also has sponsored legislation to move the U.S. air traffic control system from the FAA to a new, private corporation similar to a model used in Europe, Canada, and elsewhere. He and others have noted that airlines' fees for things such as checked bags and seat assignments are not subject to taxes, which means that the fees are not contributing to the federal Airport and Airway Trust Fund. 
A spokesman for Airlines for America, the carriers’ trade group, called the bill “a misguided attempt” to increase the PFC. The airlines say that more than $70 billion in capital projects have been approved at the 30 largest U.S. airports since 2008, and that airports can issue investment-grade bonds to fund capital projects, without hurting demand for air travel with the PFC. A January study(pdf) by the Government Accountability Office concluded that a higher PFC could reduce revenue for the Airport and Airway Trust Fund by about 1 percent through 2024 due to lower traffic. That fund received $12.9 billion in 2013.
“What’s good for travelers is to not nearly double the tax they pay to step foot in an airport when airports have more than enough resources to invest in infrastructure today,” Airlines for America spokesman Vaughn Jennings said. “That is why airports can’t point to a single project that’s not moving forward due to a lack of resources.”

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