Robert Silk
Robert Silk

In 2015 and 2016, Donald Trump made pledges to increase security and immigration enforcement and to invest heavily in the country's aging infrastructure the pillars of his shrill, though ultimately successful, presidential campaign.



But since taking office, the president has made infrastructure a distant third among those stated priorities. While it took Trump just three days to sign an executive order that briefly banned entry to the U.S. by citizens of seven mostly Muslim countries -- wreaking havoc in airports around the U.S. and on airlines both foreign and domestic -- it took his administration nearly 13 months to put forward an infrastructure plan.

The release of that $200 billion plan last month at least showed that infrastructure is a key part of the Trump administration's second-year ambitions.

But when it comes to aviation, infrastructure still appears to be playing second fiddle.

The Airports Council International-North America (ACI-NA) chafed at the president's plan because it doesn't pave the way for increases in a key fee that airports use for improvement projects. Instead, the plan would facilitate funding for airport projects through the establishment of an incentives program designed to spur investment from state and local governments as well as private entities.

The proposal also calls for the easing of federal oversight of airport development projects not related to airfields, including terminal projects.

In October 2016, the FAA estimated that airports across the U.S. would need $32.5 billion in capital funding over the following five years to keep up with traffic growth and to rehabilitate aging facilities. Using a different methodology, the ACI-NA fixed airport capital needs for those five years at $100 billion, though that figure included projects that already were funded.

To help airports raise money, the ACI-NA and the U.S. Travel Association have long lobbied for an increase in the cap on the passenger facility charge (PFC) that airports assess on airline tickets from the present $4.50 per flight leg to $8.50 per flight leg.

Airports assess the fee at their own discretion and must use the funding for infrastructure improvements. The cap was last increased in 2000.

Last summer, the Senate Appropriations Committee unanimously supported a more modest proposal to raise the cap to $8.50 for the first segment of any one-way trip while leaving it at $4.50 for subsequent segments.

But the Trump administration is silent about the cap in its infrastructure plan.

Sharply different, however, is the administration's position on increasing security, customs and immigration fees paid by airline passengers. The 2019 budget proposal the White House put out on the same day it released the infrastructure plan calls for a bump in the 9/11 passenger security fee assessed on airfare from the current $5.60 per one-way trip to $6.60 in 2019, then to $8.25 beginning in 2020.

It calls for an increase in the customs inspection fee, which is assessed as part of air and cruise ticket prices for people arriving in the U.S., from $5.65 to $7.75, and it calls for a jump in the immigration fee, also assessed on air and cruise passengers to the U.S., from $7 to $9.

The immigration and customs fees were last increased in 2001 and 2007, respectively, making the push for an increase by a president who often shies away from such moves seem sensible.

On the other hand, the 9/11 fee was established with the intent of funding TSA airport operations, but since 2013, Congress has diverted approximately one-third of the revenue for general budget items.

The U.S. airline lobby has long called for an end to those diversions, but the budget proposal is silent on that subject.

One thing that's clear from the various White House positions on aviation-related fees is that infrastructure, at least when it comes to improving airports, is not a front-burner item.

The curse of cheap fuel

Low fuel prices are good for airlines, right?

Common logic would say yes. After all, fuel is the second-largest expense for air carriers by far, lagging only labor.

But speaking on a panel at IATA's Aviation Day USA in New York last month, stock analyst Hunter Keay of Wolfe Research offered a counterintuitive argument that is food for thought.

A significant drop in fuel prices can save an airline the size of American, United or Delta upward of a billion dollars over the course of a year. But Keay argued that cheap fuel encourages airlines to expand more than they should. While moves like that might be good for consumers, they aren't beneficial to bottom lines.

Airlines, Keay continued, can pass the expense of rising fuel prices off to travelers on a dollar-for-dollar basis until crude oil hits $105 per barrel. As such, their sweet spot for crude prices -- i.e., the price range at which they won't be tempted into foolish expansion and also won't have to absorb a portion of the fuel cost increase -- is $85 to $105 per barrel.

High fuel prices, Keay added, also give management and rank-and-file employees a common enemy in OPEC, which can lead unions to make more concessions than they otherwise might. He attributed the growing power of the Service Employees International Union, which has begun winning minimum-wage increases for airport contractors in some liberal-leaning cities, to the dynamic caused by low fuel.

In making his point, Keay alluded to the arc of airline profits and crude prices in recent years. Crude oil hovered around what Keay labeled his "Goldilocks Zone" from 2011 until late 2014, before spending the better part of past three years below $60 per barrel. (Prices were in the $60s last week.)

Meanwhile, U.S. airline profits soared between 2013 and 2015, with their cumulative net income reaching a record-high $24.8 billion in 2015. Profits are still strong but have dropped the past two years as unions have won major contract boosts and ticket prices have decreased.

If one accounts for the lag that could be expected between the onset of cheap crude prices and the response of airlines, Keay's theory at least seems plausible.

Support pets

Finally, I can't resist the urge to weigh in on the issue of travelers and their support animals, which has been making headlines over the past couple of months.

Airlines receive plenty of criticism from flyers for their customer service. However, the manner in which some people have exploited airline policies related to emotional support animals is a reminder of how difficult it must be to manage millions of flyers, many of whom aren't exactly easy to deal with themselves.

In January, when Delta announced that it would toughen paperwork requirements for customers traveling with service or support animals, it didn't mince words on the catalyst for the change. Passengers, the carrier asserted, were abusing the program, leading to an 84% increase since 2016 in reported animal incidents, including urinations, defecations and bites. Customers had even attempted to fly with support snakes and support spiders, among other ridiculous requests.

Just days after the Delta announcement, United was forced to prevent a woman from flying out of Newark with a support peacock. The incident went viral and United soon announced that it, too, would toughen its support-animal policies.

But even the absurdity of a support peacock was topped in early February when, according to the Miami Herald, a Florida college student engaged an attorney after she flushed her beloved hamster Pebbles down the toilet in a Baltimore airport bathroom, allegedly at the suggestion of a Spirit agent.

Spirit acknowledges that it erroneously told the woman ahead of going to the airport that Pebbles could fly, though it denies encouraging her to send the hamster into the sewer system.

Whichever version of this story is true, I think it's fair to say that somewhere way ahead of pulling the flush handle was the point where the woman should have understood that there is such a thing as personal responsibility.

"It is incredibly disheartening to hear this guest reportedly decided to end her own pet's life," a Spirit spokesperson told me.

I agree.
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