President Joe Biden acknowledged the urgent need to invest in airports during his campaign for the Democratic nomination last year. “If you want to grow American business and enterprise,” then-candidate Biden told a forum last February, “You’ve got to have the most modern airports.”
The president wasted no time following through on that pledge by including $25 billion for airport modernization in his landmark – and desperately needed – infrastructure package. Biden knows that dragging America’s infrastructure into the 21st century must include a major upgrade of our airports.
The timing could not be better. The COVID-19 pandemic has decimated airport finances. With passenger traffic down an average of 60 to 70 percent, the pandemic is projected to cost U.S. airports roughly $40 billion by next March, possibly more if traffic does not rebound soon.
Despite the steep and sustained loss in revenue, airport directors have reallocated the money they do have to improving sanitation and retrofitting terminals to help ensure the health and safety of the traveling public. In the process, some have canceled or delayed long-overdue infrastructure projects that would enhance the travel experience. The pandemic also created the need for additional health infrastructure projects, some of which will require significant funding, and ongoing investments in sanitation and technology enhancements.
As a co-sponsor of that United for Infrastructure presidential forum last February, Airports Council International – North America was encouraged by Biden’s support for modernizing America’s airport infrastructure, which has been in desperate need of upgrades for years. Airports are major economic contributors to their local communities and facilitate business operations across the country. Modernizing airport infrastructure is even more crucial than ever to ensure economic recovery, and the best way to adequately fund America’s airports is by updating the Passenger Facility Charge, or PFC.
Biden has consistently promised to modernize airports since taking office. “The future rests on whether or not we have the best airports that can accommodate air travel,” Biden told reporters during his first official press conference last month. Airport directors could not agree more. Airports are economic drivers in their communities and critical to U.S. infrastructure. We cannot afford to delay.
Airport infrastructure has suffered from chronic underfunding for decades, creating a backlog of at least $115 billion in planned and now necessary projects at U.S. airports over the next five years, according to the just-released biennial report from ACI-NA on funding shortfalls. Furthermore, the pandemic has forced many airports to defer projects beyond the next five years. Airports’ needs aren’t going away, especially once passenger volumes rebound.
Even before the pandemic, U.S. airports were unable to fund projects to meet passenger needs because Congress has not updated their main funding mechanism, the PFC, in more than 20 years. The PFC is a modest user fee on tickets that goes directly to airport infrastructure projects. It has been capped at $4.50 for more than 20 years – since before 9/11. The PFC funds new terminal construction, transit connections, additional or expanded roadways and other facility modernization projects. However, the now-outdated cap is set too low to meet current funding needs: In the two decades since Congress last updated the PFC, construction and related costs have risen steadily, reducing the PFC’s actual purchasing power by 40 percent.
As the Biden administration and U.S. Congress turn toward comprehensive infrastructure reform to help with economic recovery, it is imperative that America’s airports are able to secure the funding needed to continue safe and efficient operations. Modernizing the PFC cap would enable airports to fund projects that provide concrete benefits for travelers. These projects can increase airport capacity, allowing for more competition among airlines, which lowers ticket prices. The additional revenue will stimulate the economy through shovel-ready projects that put money in the pockets of local workers.
American airports support 11.5 million jobs and contribute $1.4 trillion to the U.S. economy. They are hubs of economic activity that connect families, businesses, and communities around the country with the rest of the world. Every dollar invested in airport infrastructure produces an additional $1 to $2.50 in economic growth.
Infrastructure upgrades also benefit the roughly 1.5 billion passengers who travel through airports each year. Expanding old terminals, adding gates and building new runways and roadways can help local communities attract new air carriers and allow existing carriers to expand service. This increased competition creates more choice for travelers and lowers airfares.
The COVID-19 pandemic has crippled the entire travel sector. For airports, that means further delays in long-overdue infrastructure project. Biden signaled his support for increasing the PFC last February. Now, we need Congress to take up that challenge by modernizing our transportation system. Increasing the PFC accomplishes that goal.
Kevin M. Burke is the president and CEO of Airports Council International – North America.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.