GAO Issues Report on Alternative Methods for Collecting Airport Passenger Facility Charges

Executive Summary: Yesterday the Government Accountability Office (GAO) released a study required by the 2012 FAA Reauthorization Act on other methods for collecting PFCs than through the airlines. ACI-NA provided extensive information to GAO for the study; making the case that airports required additional funding to modernize and expand infrastructure to serve passenger and cargo needs and that while increasing or uncapping the existing PFC is the best alternative, airports should be permitted to take advantage of other options to collect an increased or uncapped PFC user fee. GAO considered three alternatives (kiosk or counter; internet or online; and emerging technologies) but concluded that each method faces considerable challenges to implement, and none of the three alternative methods are better than the existing collection method.

Background: The GAO study was required by Section 112 of the FAA Modernization and Reform Act of 2012. GAO was directed to consider the following when studying collection methods that did not include the airlines: (1) collection options for arriving, connecting, and departing passengers at airports; (2) cost sharing or allocation methods based on passenger travel to address connecting traffic; and (3) examples of airport charges collected by domestic and international airports that are not included in ticket prices. In fulfilling this mandate, GAO’s objective was to identify existing and potential methods for collecting and allocating airport passenger facility charges, including from connecting passengers.

ACI-NA staff met with GAO staff several times, educating them on the need for additional airport funding and the justification for an increased/uncapped PFC. We provided extensive information on the success of the Canadian Airport Improvement Fee and suggested both U.S. and Canadian contacts for additional information.  We also advocated that airports should be permitted the option to self- collect an uncapped PFC user fee if the airport believed this was the best alternative to obtain the funding necessary to make critical infrastructure improvements given that Congress has not increased the PFC ceiling since 2000.

After significant research GAO in the report identified three basic alternative methods to the current airline ticket-based method for PFC collections, noting that these are not mutually exclusive and could be used by either individual airports or a group of airports:

1.    Kiosk or counter: passengers would pay the PFC at the airport using a self-service kiosk or payment counter.

2.    Internet or online payment: passengers would pay the PFC online through an airport or third-party Web site during or after the airline ticket purchase.

3.    Emerging technologies: passengers would pay the PFC using their smartphone, pre- paid card, near field communication (NFC) - enabled device, or other technology.

GAO found that all three alternatives methods face considerable challenges to implement and none of the three alternative methods are better than the existing collection method. Compared to the current on-ticket PFC collection method, all alternatives would diminish the passenger experience by adding another step in the payment or check-in process; reduce customer transparency; and entail higher administrative costs. GAO stated that all of the aviation stakeholders interviewed, including representatives from individual U.S. airports and airlines, support the current collection method over any alternative due, in part, to passenger ease and low administrative costs. However, GAO noted that in the future it might be possible to address these challenges with improved technology.  Alternatively airport Boards may be willing to accept the additional costs and addition passenger inconvenience in order to obtain critical infrastructure funding.

ACI-NA Contacts: Debby McElroy and Matt Griffin.