A proposal to transfer control of the U.S. air traffic
control system from the FAA to a government-created, nonprofit corporation has
dominated discussion about the Aviation Innovation, Reform and Reauthorization (AIRR)
Act, the FAA reauthorization bill passed by the House Transportation and
Infrastructure Committee on Feb. 11.
But airline and travel industry stakeholders are also
closely following other portions of the bill, including a proposal to do away
with the full-fare advertising rule, which the DOT implemented in 2012, as well
as measures that relate to funding of airport infrastructure projects.
The bill, which has yet to be scheduled for a vote by
the full House, would fund the FAA through 2022. But though existing FAA
funding expires on March 31, the AIRR Act remains several steps away from
passage. Notably, the Senate Commerce Committee has yet to unveil a companion
bill. Congress could pass a temporary funding bill, if needed, prior to the
March 31 deadline.
At the Feb. 11 hearing, the House transportation
committee approved a proposal put forward by Rep. Carlos Curbelo (R-Fla.) to do
away with the full-fare advertising rule, which requires airlines, travel
agents, packagers and anyone else selling commercial plane tickets to post the
total price in print and online advertising, including taxes and fees.
Under the Curbelo amendment, ticket sellers could post
base fares in their advertising, provided that the total cost, including taxes
and fees, was separately disclosed.
A similar measure was passed by the House in 2014 but
never gathered momentum in the Senate. This year, it has sharply divided the
travel industry. Supporting the measure is the commercial airlines’ trade group
Airlines for America (A4A), which argues that airline tickets should be sold
just like other consumer products, with the base price advertised and taxes
revealed at the point of sale.
Sean Kennedy, A4A’s senior vice president of global
government affairs, said the existing regulation keeps consumers in the dark
about how much taxation they are subject to during air travel. The rule can
also lead consumers to think that airfare is more expensive, he said, since
many shoppers will assume that they’ll have to add taxes to the advertised
price as they would for other products.
But ASTA, the Business Travel Coalition and the OTA
trade organization Travel Tech have come out strongly against the effort to end
the full-fare rule, arguing that the measure would make prices less
transparent, frustrating consumers’ ability to comparison shop.
“The traveling public
deserves to have access to the transparent, all-in cost of airfare, including
all taxes and fees, so they can make true comparisons and educated decisions
regarding their travel choices. This provision would harm consumers by reducing,
rather than promoting, all-in price transparency,” Travel Tech spokesman Phil Minardi said.
Whatever the outcome is in Congress, aviation analyst
Kyle Bailey said industry representatives and travelers would adapt.
“It will be business as usual,” Bailey said. “Whether
it goes through or doesn’t go through, people will get used to it.”
Proposed measures in the AIRR Act to fund airport
infrastructure are also exposing divisions within the U.S. travel industry.
Opposing sides of the airport infrastructure debate
said in interviews last week that they could live with those figures.
But stronger battle lines have been drawn over whether
Congress should raise the maximum amount that airports can assess in Passenger
Facility Charges (PFC) per flight segment.
As opposed to Airport Improvement Program
appropriations, which are distributed by Congress, airports receive PFC funds
directly, which they can use for approved projects.
Under existing law, the maximum PFC is $4.50 per
According to FAA estimates, airports collected $2.96
billon in PFC funds in 2015. That helped finance what the FAA estimated to be
$33.5 billion in infrastructure needs between 2015 and 2019.
But while the AIRR Act would leave the cap at $4.50,
airport advocates, saying that the limit hasn’t been increased since 2000,
proposed that it should be raised to $8.50.
Among those calling for the higher cap are the
American Association of Airport Executives and the U.S. Travel Association.
“If we really are going to solve problems in some of
our largest airports, things like congestion and lack of airport competition,
our airports are really going to need to accelerate investments,” said Erik
Hansen, the senior director of domestic policy at U.S. Travel. He added that 12
to 15 U.S. airports are expected to reach their capacity in the next 10 years.
“If you’ve got Donald Trump and Joe Biden saying the
same things, that our airports are behind global standards, that constitutes
consensus,” he said.
But A4A opposes an increase to the PFC limit. “We do
not want to do anything that is going to make travel more expensive for
consumers,” Kennedy said.
Airports, A4A asserted, have plenty of other ways to
get construction funding, including bonds and other forms of borrowing.
Among the other proposals currently included in the
AIRR Act are:
• A ban on cellphone calls during flights.
• A ban on smoking
e-cigarettes during flights.
• A requirement that airlines refund fees on checked
baggage that is lost for more than 24 hours.