GAO Report: Facility Fees Should Stay on Airline Tickets
A new report from the Government Accountability Office says that although airports should have more flexibility in raising facility fees, the fees should not be separated from the ticket price.
Maybe this new analysis by the Government Accountability Office (GAO) sounds obvious, but it’s always good to check your thinking.
Earlier this week, GAO issued a new report analyzing whether it makes sense for passengers to pay Passenger Facility Charges (PFC)—the required fees for the use of airports—at the airport rather than as part of the price of their tickets. The report, required by the FAA Modernization and Reform Act of 2012, essentially looked at whether to cut out the airlines as middlemen.
The issue is a sore point between airlines and airports: Airports want to raise the PFC fees to pay for ongoing infrastructure improvements, but airlines have balked at the plan, fearing that a fee increase would hurt ticket sales. So the report looked at whether separating the payments would allow a PFC increase without affecting ticket sales.
Currently, the fees are capped at $4.50 per flight leg. The airport industry wants Congress to raise the cap to $8.50 per leg, with further increases tied to the rate of inflation.
So should the fees be split from the tickets? GAO officials considered three alternative ways to collect the fees: kiosk-based machines at the airport; online payments made during or after ticket purchase; and use of smartphones or other mobile devices. But the answer, according to the research, was a resounding no.
“All three alternative-collection methods introduce additional steps to the ticketing and boarding process, which could potentially diminish the passenger experience,” the report stated [PDF].
The report found that adding the extra steps would also hurt transparency, add complexity, and boost administrative costs.
In comments to USA Today, Airports Council International-North America spokesman Scott Elmore acknowledged that the report showed that the current collection system is the most effective. The group had worked closely with GAO on the report.
“Airports are in the business of improving everyone’s travel experience, whether increasing efficiency in the terminal or rehabilitating ailing buildings,” Elmore told the newspaper.
Airlines for America argued that the report proved that placing an extra burden on travelers isn’t worth the financial benefits.
“The GAO reaffirmed what economists have long said—when costs are increased, as a PFC hike would do, demand is suppressed, which negatively impacts the economy, airline customers, employees, and the communities we serve,” A4A spokeswoman Victoria Day told USA Today.