As if increasing airline fees were not sufficient pressure on cheap airplane tickets and cheap vacation packages, now airports want to be able to raise the limit on the fees that they can charge passengers. Currently airports are not allowed to charge passengers more than $4.50 for each passenger that flies though its facilities.
Some airport managers claim that the current maximum passenger facility fee is too low because planes are flying fuller than ever and their costs on things like security are increasing. They argue airports are further being hurt by the fact that the billions of dollars in airline fees are not subject to the 7.5 percent federal tax added to base fares.
Revenue from that tax is turned over to the Airport and Airway Trust Fund, which pays for most of the Federal Aviation Administrations budget and also pays for some airport capital projects. If airline fees were taxed, more money would be available for additional airport projects.
Airlines lobby against airports being allowed to increase airport passenger fees in part because limiting airport revenue inhibits the ability of airports to expand. Airports with static space discourage entry of new airline competition as well as the expansion of existing competition.
Airlines are deregulated and can charge whatever they want while airports continue to have their fees regulated. Some airport managers believe airlines like the current situation because it keeps competition out. Airlines respond that their customers already pay excessive taxes and do not want to see ticket prices increase even more. www.cheapfares.com