March 26, 2019

Chair DeFazio Statement from Hearing on “The Cost of Doing Nothing: Why Investment in our Nation’s Airports Matters”

Washington, D.C. — The following are opening remarks, as prepared for delivery by Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) during today’s hearing titled: “The Cost of Doing Nothing: Why Investment in our Nation’s Airports Matters.”

Before we begin this hearing, I would like to take a moment to provide an update on the important work this Committee is undertaking in response to the devastating Lion Air flight 610 and Ethiopian Airlines flight 302 accidents, and subsequent international grounding of the Boeing 737 MAX aircraft.

Following the Federal Aviation Administration's (FAA) grounding of the 737 MAX in U.S. airspace on March 13, Subcommittee Chairman Rick Larsen and I launched an investigation into the FAA's certification of the MAX, which will include a rigorous evaluation of:

  • the roles and responsibilities of both the FAA and Boeing during the MAX-certification;
  • how the safety critical systems that did not exist on prior 737 models were tested, evaluated, and assumed to be safe; and
  • why the MAX was certified without requiring additional pilot training, among other things.

In addition to starting our initial investigatory work, last week, Chairman Larsen and I also requested that the Department of Transportation Inspector General perform its own investigation into the MAX's certification, which we have asked to include a comprehensive look at the FAA's evaluation of new features on the aircraft, including:

•           sensors and software;

•           pilot training programs and manuals; and

•           how new features were communicated to airlines, pilots, and foreign authorities.

We have also requested that the Inspector General provide us with status reports on any corrective actions undertaken by the FAA since the first accident and whether pilot training is adequate before the MAX returns to revenue service.

Further, we created a whistleblower webpage to serve as a resource for anyone who has information to share so they can do so anonymously. As we continue our investigation, we are eager to hear from anyone who can help. I extend an invitation to any current or former FAA or Boeing employees who have concerns to please feel safe coming forward. 

Today, we are sending a bipartisan letter to the FAA urging the Agency to engage an independent, third-party review of Boeing's proposed changes to the 737 MAX and to evaluate that the manufacturer's “fix” is comprehensive and that pilots have the information and training they need to fly the aircraft safely.

This all must be done before the 737 MAX is certified to return to service. The traveling public needs assurances that the FAA will only re-certify the aircraft for flight if and when the FAA, outside safety and technical experts, and pilots agree the aircraft is safe to fly.

Later this week, I will submit document requests to the FAA and Boeing to drill down into key certification decisions regarding the MAX.  We plan to dig deep into the issues surrounding the recent accidents over the coming weeks and months. 

Tragedies like these should not happen. The Transportation and Infrastructure Committee is committed to ensuring the safety of our transportation system, and under my Chairmanship, we will take all steps that are necessary to do so. I expect that our work will shed light on any deficiencies in the certification of aircraft in the United States, and we will ensure all lessons are applied and effect changes to improve the safety of our Nation's air transportation system, and hopefully, other nations' as well.

Today, we hold the Transportation and Infrastructure Committee’s second hearing of the 116th Congress on the importance of investing in our Nation’s infrastructure.

In February, we kicked off this Congress by sounding the alarm bells that investing in America’s infrastructure cannot wait. Today, we will drill down into the ever-growing capital needs of our airports and the potential solutions to bridge the funding gap that exists between what airports can pay for and what they cannot. 

Crippling congestion has become the norm in our country. And it is not just on roads. This congestion is affecting air travel in the United States as well, with terminals clogged with passengers; runways and taxiways needing additions and rehabilitation; and airplanes sitting on tarmacs across the country waiting for gates. There is no question that Members of this Committee who fly each week to Washington experience these issues.

Passenger terminals across the United States, many of which were constructed in the 1960s or 1970s, are outdated and cannot accommodate current or projected passenger growth. In addition, airports do not have the space or gates needed to accommodate current airline departures and arrivals, let alone for welcoming new service for communities. This, in turn, affects the price you pay for an airline ticket, as well as local businesses and regional economies from coast to coast.

According to the Airports Council International (ACI), when combining all funding sources available to U.S. airports, they still face more than $15 billion each year in unmet infrastructure needs.

U.S. airports are doing the best they can to find ways to meet their ballooning needs, but this often leads to local communities paying twice as much and waiting twice as long for upgrades.

Last year, this Committee hammered out a long-term Federal Aviation Administration (FAA) reauthorization bill that became the longest FAA reauthorization enacted in decades. While the five-year law provides robust funding for the FAA to carry out its mission and contains numerous provisions needed to advance the U.S. aviation industry at-large, it failed to address the growing infrastructure needs of U.S. airports, despite a national consensus that airports are chronically underfunded.

In fact, by the time this authorization expires in 2023, funding levels for the FAA grant program for airports—the Airport Improvement Program (AIP)—will have been flat for a total of 12 years, despite infrastructure needs growing and the cost of construction rising over this same period.  

The FAA forecasts that, over the next five years, U.S. airports will register a need for $35.1 billion in AIP-eligible infrastructure projects alone. That amounts to more than $7 billion a year—more than double the $3.2 billion in AIP grants awarded every year. 

It is clear that AIP barely makes a dent in the total AIP-eligible investment needs each year. And even when you take into account the other sources of revenue available to airports, such as State grants and airport concessions, they are still billions of dollars short of what they need each year. ]

The picture is even bleaker when you factor in airports’ non-AIP-eligible needs. ACI estimates that, over the next five years, U.S. airports will require total investment of $128 billion, or $26 billion a year.

So what is the solution? What can Congress do to solve these rising capital needs? I am surely not opposed to increasing the FAA’s Federal AIP grant levels. But for starters, we can increase the cap on the passenger facility charge (PFC). 

The PFC is a locally-imposed, Federally-authorized user fee that airports may collect from their passengers to finance airport-related projects. Simply put, the PFC supports local decisions about what is best for airports and their surrounding communities. 

Unfortunately, the PFC cap has not been raised in almost 20 years. The PFC had been capped at $3 per enplaned passenger since Congress created the PFC in 1990; in the 2000 FAA reauthorization, we increased it by merely $1.50 to $4.50.

And there it has remained, capped at $4.50, not indexed to inflation, totally stagnant. Had the $4.50 PFC been indexed to inflation in 2000—the last time Congress raised the cap—the PFC would be worth about $8.50 today, if not more. In fact, over the years, construction cost inflation has severely eroded the purchasing power of PFCs. Today, the PFC is only worth just over $2.

Yet the demands on airports have grown by the year. You might think that the airlines, which want to make their customers’ travel experience as pleasant as possible, would agree to the need for more investment in airport infrastructure through PFCs. But no—they have historically unleashed all their political capital to defeat any PFC increase, relying on the implausible argument that even a dollar increase in the cost of air travel will cause demand to plummet.

Somehow, though, the airlines are willing to disregard that view of the law of supply and demand when they charge bag fees. Federal data shows U.S. airlines unilaterally increased the cost of air travel for Americans by about $4.6 billion in bag fees in 2017.

Then, while Congress was negotiating the FAA reauthorization last year, several carriers (American Airlines, Delta Air Lines, JetBlue Airways, and United Airlines) had the audacity, in a matter of days, to increase their bag fees by $5. And guess what? People still flew. Therefore, I fail to see how a modest PFC increase would so dramatically affect demand for air travel.

In fact, we just need to look to the north for evidence that a higher airport fee will not dissuade travelers. Every day, U.S. Airlines fly into Canadian airports, which charge anywhere between $4 to $40 for their PFC equivalent, the “Airport Improvement Fee.” For example, a flight from DCA to Toronto on one U.S. airline would include a $4.50 PFC in the United States as well as a nearly $19.00 AIF (Canadian airport fee). And I’ve never heard a single complaint from the airlines about those fees. 

A priority for me as Chairman this year will be to increase the cap on the PFC so that U.S. airports can keep pace with current demands as well as plan for expected commercial service growth in the years ahead.

We need more terminals, more runways and taxiways. And without an increase in the PFC, who bears the brunt? Passengers. They end up paying basically double for a project and wait years longer than necessary for project completion. 

Last Congress, along with Republican Congressman Thomas Massie, I introduced H.R. 1265, the “Investing in America: Rebuilding America’s Airport Infrastructure Act,” which would have removed the PFC cap, generating billions of dollars in additional investments to rebuild our airports and ensure we are prepared for the demands of the next decade, as our competitors around the world are doing.

There was bipartisan support for a PFC increase in the Senate as well. The Senate Appropriations Committee, in 2017, approved a bipartisan proposal to raise the PFC cap from $4.50 to $8.50 for originating passengers and increase AIP funding from $3.35 billion to $3.6 billion—a $250 million increase. The full Committee approved the measure by unanimous consent, but the Senate failed to act. 

Airports collect approximately $3.3 billion each year in PFC revenue, on the basis of a $4.50 cap. If airports doubled their current PFC levels, they could collect nearly $7 billion annually. But even a more modest increase, when combined with AIP funding, would bring them a step closer to fulfilling their capital needs. And, of course, investment in airport infrastructure, from terminals to runways and taxiways, will create jobs. Lots of jobs.

I look forward to hearing from our witnesses this morning regarding their current and growing infrastructure needs and why robust investment matters. While we missed an opportunity to truly address your predicament in last year’s reauthorization, I hope we can work in a bipartisan manner this Congress to find a path forward on airport infrastructure investment, which includes raising the PFC cap. I will continue to push this as a key component in any infrastructure bill that Congress considers.

Thank you.