While airlines were hailing a DOT Administrative Law Judge's decision that the higher terminal fees imposed on low-cost and international carriers at Los Angeles are discriminatory, unreasonable, unfair and excessive, Airports Council International launched its campaign to increase the cap on Passenger Facility Charges to pay for an estimated $87.4 billion over the next four years on new airport infrastructure, such as new runways, terminals needed to keep pace with passenger demand. Meanwhile, the Department of Transportation released a report indicating building new airports and more strategic use of regional airports will be necessary to stem airport gridlock.
The new fees, which did not make it through the Senate Commerce Committee, constitute a disaster for regionals, especially given the fact they now face a Committee-proposed $25 per flight segment fee which will likely put a lot of small carriers out of business. See related stories in this issue.
The current PFC cap is $4.50 per flight segment, or up to $18 per round trip with connections which regional passengers now face. Atlanta would nearly double the PFC when the current $4.50 fee expires in September to $7.50 or $30 roundtrip with connections. Three of every four medium and large airports charge the highest fee possible, and ACI indicated that without the cap change, the industry will be about $2.1 billion short in revenues needed to improve facilities.
While some airports, such as Atlanta, want to raise the passenger facility charge while others, including San Francisco, are reducing airline fees to attract new passengers, although those reductions are not aimed at regional carriers. Related Story  In an successful effort to attract low-cost carriers, SFO landing fees are set to be cut 10 percent and lease rates will drop three percent effective July 1, the second time in an many years the airport has made the move.
ACI-NA's Airport Capital Development Costs for 2007-2011 found that if these improvements are not made, travelers will encounter overcrowding at some of the nation's most congested passenger airports, longer flight delays, longer waits for an open gate at destination airports, and a system under-equipped and ill-prepared to respond to new capacity, safety and security requirements. Its "Passengers First Commitment" campaign promises more airline competition, improved safety and security, and enhanced airport convenience and reliability. The organization noted 2006 surpassed 2000 for the length of average delay at 53 minutes, up two minutes from 2000. It also predicted that 2007 would break last year’s record.
In ACI’s corner is FAA which just released the second version of its Future Airport Capacity Task report, which said Atlanta, Houston, Philadelphia, Los Angeles, San Diego, Las Vegas, Phoenix, West Palm Beach and Fort Lauderdale all require additional capacity, which may include building new airports. The new report found that 14 airports and eight metropolitan areas nationwide will require new capacity to accommodate the anticipated growth in air traffic over the next 18 years.
“By 2025, cities like Atlanta, Las Vegas, Chicago, and San Diego are going to have to risk the lost revenue, lost business, and lost appeal that comes with chronic airport delays or they’re going to have to consider building new airports,” DOT Secretary Mary E. Peters said. While commending the recent expansion work by Chicago and Atlanta, Peters indicated that the Atlanta’s new runway, tower, international terminal and end-around taxiway will only suffice in the short term. The Southeast must still find new ways to handle growing demand including building a new airport, she said, pledging $1 million for short-term solutions for increasing airport capacity at Atlanta. The new money will also fund a review of longer-term options like converting existing general aviation and military air fields for commercial use or building a new airport.
The San Francisco Bay area, New York, Boston and Los Angeles, where existing airports are hemmed in by urban development, the report concludes, will have to find better ways to use existing, smaller or underused air fields. Building a handful of new airports won’t be enough though. The new report also shows that by 2025, 15 metropolitan areas won’t be able to handle demand for flights unless they move forward with planned improvements.
Secretary Peters noted in the last 15 years, DOT spent nearly $6 billion to help open 27 new runways at the nation’s largest airports, helped convert five former military airfields to commercial service airports, and currently committed an additional $.2 billion for three runways, two airfield reconfigurations, a runway extension, and a major taxiway.
Building new airports, expanding existing fields, and taking better advantage of smaller regional airports are all solutions that must be considered to meet the demand for air travel that continues to grow, Peters said.
The FACT study is available on the Internet.