GAO-13-262R Passenger Facility Charges 

United States Government Accountability Office

Washington, DC 20548 

February 14, 2013 

The Honorable John D. Rockefeller 

Chairman 

The Honorable John Thune 

Ranking Member 

Committee on Commerce, Science, and Transportation 

United States Senate 

The Honorable Bill Shuster 

Chairman 

The Honorable Nick J. Rahall, II 

Ranking Member 

Committee on Transportation and Infrastructure 

House of Representatives 

Subject: Alternative Methods for Collecting Airport Passenger Facility Charges

This report formally transmits the briefing held with your offices on January 15th and 16th, 

2013, in response to the mandate under Section 112 of the FAA Modernization and Reform 

Act of 2012 (FAA reauthorization act).1

 This section directed the Comptroller General to 

conduct a study of alternative means of collecting airport passenger facility charges (PFCs)2

that would allow such charges to be excluded from the ticket price, and in conducting this 

study, to consider: (1) collection options for arriving, connecting, and departing passengers 

at airports; (2) cost sharing or allocation methods based on passenger travel to address 

connecting traffic; and (3) examples of airport charges collected by domestic and 

international airports that are not included in ticket prices.3

 In fulfilling this mandate, our 

objective was to identify existing and potential methods for collecting and allocating airport 

passenger facility charges, including from connecting passengers. Your office concurred 

 

1

Pub. L. No. 112-95, § 112, 126 Stat. 11, 18 (2012). 

2

PFCs, which are collected from passengers, were introduced in 1990 with a cap of $3 per PFC to finance local 

airport infrastructure projects at commercial service airports. Collection of fees began in 1992. In 2000, Congress 

raised the cap on PFCs from $3.00 to $4.50 per boarding passenger. Wendell H. Ford Aviation Investment and 

Reform Act for the 21st Century (AIR-21), Pub. L. No. 106-181, § 105, 114 Stat. 61, 71 (2000). 

3

During negotiations for the FAA reauthorization act, Senate bill S.223, § 202, 112th Cong., proposed a pilot 

program at up to six airports to impose an unlimited PFC collected directly from passengers by the participating 

airports. While this pilot program was not included in the final act, potential alternative collection methods have 

been explored by airport interests with the intention that an airport could impose an unlimited facility charge if the 

airport collected it directly from the passenger. 
Page 2 GAO-13-262R Passenger Facility Charges 

that this report meets Section 112’s requirement for the Comptroller General to submit a 

report not later than 1 year after the date of enactment of this Act.4

To conduct this study, we analyzed 2012 data from the International Air Transport 

Association’s (IATA) online inventory of airport charges to identify alternative collection 

methods that are currently being used at airports worldwide. We determined that the IATA 

data were sufficiently reliable for the purposes of our analysis by reviewing documentation 

on the inventory and interviewing a knowledgeable IATA official. We also conducted a 

literature review of passenger user fees in the airport industry and other transportation 

modes to identify existing or potential alternative collection methods. We interviewed 35 

aviation stakeholders with a role in PFC collection and oversight, including the Department 

of Transportation (DOT) and the Federal Aviation Administration (FAA), technology 

consultants and developers, travel agents, consumer groups, global distribution systems for 

airline ticket processing, as well as representatives from selected U.S. airlines and airports5

and their respective associations to identify alternative collection methods, including 

methods for addressing connecting traffic, and to obtain views on potential impacts of 

alternative methods relative to the current method. We reviewed literature and GAO reports 

on fee collection to identify factors to consider when evaluating alternative passenger fee 

collection methods. Lastly, we reviewed applicable laws and regulations, FAA documents, 

GAO reports, and industry publications to identify potential impacts of different fee collection 

design elements. We conducted this performance audit from August 2012 through February 

2013 in accordance with generally accepted government-auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. 

In summary, we identified three basic alternative methods to the current airline ticket-based 

method for PFC collections. These methods are not mutually exclusive and could be used 

by either individual airports or a group or airports (slides 10 through 13): 

1. Kiosk or counter: passengers would pay the PFC at the airport using a self-service 

kiosk or payment counter. 

2. Internet or online payment: passengers would pay the PFC online through an airport 

or third-party Web site during or after the airline ticket purchase. 

3. Emerging technologies: passengers would pay the PFC using their smartphone, prepaid card, near field communication (NFC)-enabled device, or other technology. 

We evaluated these alternative methods relative to the current ticket-based collection 

method using factors that we identified as key considerations for evaluating alternative 

passenger fee collection methods—passenger experience, customer transparency, 

administrative costs, technology readiness, and legal issues (slides 14 through 20). Based 

on our evaluation of the alternatives, each faces considerable challenges to implement, and 

 

4

The FAA reauthorization act was enacted on February 14, 2012. One year after that date is February 14, 2013. 

5

We selected nine airports with a variety of airport size, airport traffic, and imposed PFC rate and four airlines 

with a variety of business models and levels of passenger traffic. 
Page 3 GAO-13-262R Passenger Facility Charges 

none of the three alternative methods that we identified are currently better than the existing 

collection method (slide 20). Compared to the current on-ticket PFC collection method, all 

alternatives would diminish the passenger experience by adding another step in the 

payment or check-in process (slide 15); reduce customer transparency (slide 16); and entail 

higher administrative costs (slide 17). At this time, all of the aviation stakeholders that we 

spoke to, including representatives from selected U.S. airports and airlines, support the 

current collection method over any alternative due, in part, to passenger ease and low 

administrative costs. In the future, however, it is possible that some of these challenges will 

be reduced as technology advances or that airports might be willing to accept the additional 

costs and impose additional passenger burdens in return for an increase in their capital 

funding. 

We provided DOT with a draft of this report for its review and comment. DOT provided 

technical comments that we incorporated as appropriate. In addition, in comments e-mailed 

to us, DOT officials generally agreed with our findings. In particular, officials agreed with our 

finding that alternatives to the current method for collecting PFCs would be counter to DOT’s 

recent efforts to provide consumers with transparency about the full price of air 

transportation, particularly because PFC rates vary by airport. Officials also agreed that 

alternative collection methods would reduce efficiency by adding steps in a passenger’s air 

travel experience and complicate itineraries. DOT officials stated that these challenges, as 

well as the legal impacts should be considered when evaluating alternative collection 

methods in the future. 

We are sending copies of this report to the appropriate congressional committees and to the 

Secretary of Transportation. This report will also be available at no charge on the GAO Web 

site at http://www.gao.gov. Should you or your staff have questions concerning this report, 

please contact me at (202) 512-2834 or dillinghamg@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the last page of this 

report. Key contributors to this report were Paul Aussendorf, Assistant Director; Amy 

Abramowitz, Bert Japikse, Leia Dickerson, Delwen Jones, Sara Ann Moessbauer, Josh 

Ormond, Madhav Panwar, Gretchen Snoey, and Melissa Swearingen. 

Gerald L. Dillingham, Ph.D. 

Director 

Physical Infrastructure Issues 

Enclosure 
Page 4 GAO-13-262R Passenger Facility Charges 

Enclosure 

Alternative Methods for Collecting 

Airport Passenger Facility Charges

Mandated by Section 112, 

FAA Modernization and Reform Act of 2012 

(Pub. L. No. 112-95)

Briefings to 

Senate Committee on Commerce, Science, and Transportation 

and House Committee on Transportation and Infrastructure

January 15th and 16th, 2013

Page 1

 
Page 5 GAO-13-262R Passenger Facility Charges 

Mandate

Section 112, FAA Modernization and Reform Act of 2012 directed the 

Comptroller General of the United States to conduct a

study of alternative means of collecting passenger facility charges that 

would allow such charges to be excluded from the ticket price; to 

report on this study within 1 year of the date of enactment of this Act; 

and in conducting this study, to consider:

(1) collection options for arriving, connecting, and departing 

passengers at airports;

(2) cost sharing or allocation methods based on passenger travel to 

address connecting traffic; and 

(3) examples of airport charges collected by domestic and 

international airports that are not included in ticket prices.

Page 2

 
Page 6 GAO-13-262R Passenger Facility Charges 

Scope and Methodology

• Analyzed 2012 data from International Air Transport Association’s worldwide 

online inventory of airport charges and conducted a literature review to identify 

alternative collection methods that are currently being used at airports worldwide 

and potential alternative collection methods used by other transportation modes.

• Interviewed aviation stakeholders, including OST/FAA, technology consultants 

and developers, travel agents, consumer groups, as well as representatives from 

selected U.S. airlines and airports and their respective associations to identify 

alternatives, including methods for addressing connecting traffic, and to obtain 

views on potential impacts of alternative methods relative to the current system.

• Reviewed literature and GAO reports on fee collection to identify factors to 

consider when evaluating alternative collection methods.

• Reviewed relevant statutes and regulations, FAA documents, GAO reports, and 

industry publications to identify potential impacts of different fee collection design 

elements.

Page 3

 
Page 7 GAO-13-262R Passenger Facility Charges 

Passenger Facility Charge (PFC) Program 

Background

• PFCs, which are collected from passengers, were introduced in 1990 

with a cap of $3 per PFC to finance local airport infrastructure projects 

at commercial service airports. Collection of fees began in 1992.

• The goals of the PFC program are to finance projects that:

• contribute to the preservation or enhancement of the national air 

transportation system’s safety, security, or capacity;

• reduce noise generated by airport activities; and

• enhance competition among the airlines.

• Anti-Head Tax Act1 prohibits states, local governments, and others 

from levying or collecting any tax, fee, head charge, or other charge, 

directly or indirectly, on individuals traveling in air commerce or on the 

transportation of an individual traveling in air commerce, but 

specifically exempts the PFC program from this prohibition.

Page 4 149 U.S.C. 40116.

 
Page 8 GAO-13-262R Passenger Facility Charges 

 
Page 9 GAO-13-262R Passenger Facility Charges 

The Current PFC Collection Method

• PFCs are collected as part of the current ticket payment and 

distribution process, which involves many parties.

• Airlines remit PFCs to airports minus an 11¢ administrative 

charge per PFC collected.

• According to estimates from aviation industry groups, in recent 

years, airlines collected between $69 and $78 million in PFC 

administrative charges annually.

• A passenger may be charged no more than two PFCs on a oneway trip or four PFCs on a round trip (with a maximum charge of 

$18).

Page 6

 
Page 10 GAO-13-262R Passenger Facility Charges 

Almost all Airports that Collect PFCs 

Impose the Maximum Rate

Page 7 a We have combined the one small hub airport that charges a $4.00 PFC to the $4.50 bar. Data are as of September 2012. 

 
Page 11 GAO-13-262R Passenger Facility Charges 

Most Collection Revenue Is Used to 

Enhance Capacity or Reduce Congestion

Approved Collection Revenue (in billions) for PFC Projects by 

Category, beginning 2006 through 2054

Note: Data are as of September 2012. Page 8

 
Page 12 GAO-13-262R Passenger Facility Charges 

Vast Majority of PFCs Are Collected By 

Large Hub Airports

PFC Funds Collected by Hub Size, 2012*

Page 9 *Total PFC funds collected from January through September 2012.

 
Page 13 GAO-13-262R Passenger Facility Charges 

Three Basic Alternatives to Current 

Ticket-Based Method for PFC Collections

1. Kiosk or Counter

2. Internet or Online Payment 

3. Emerging Technologies

Note: These alternatives are not mutually exclusive and 

could be used for individual airports or a group of 

airports

Page 10

 
Page 14 GAO-13-262R Passenger Facility Charges 

Kiosk or Counter 

• Passengers would pay the PFC at the airport using a 

self-service kiosk or payment counter. 

• We identified very few airports around the world that currently collect 

airport facility charges or airport taxes from the passenger at the 

airport.

• Examples identified: Blackpool Airport in the United Kingdom and 

Cartagena Airport in Colombia.

• Airports would collect their PFC from originating and connecting 

passengers.

• Connecting passengers would pay at kiosks or counters located inside 

secure areas, or an airport could choose to exempt connecting 

passengers from its PFC.

Page 11

 
Page 15 GAO-13-262R Passenger Facility Charges 

Internet or Online Payment

• Passengers would pay the PFC online through an 

airport or third-party Web site during or after ticket 

purchase. 

• We did not identify any airports that use this method for collecting 

airport passenger fees.

• Examples identified in other applications: PayPal.

• If a third-party Web site is used, participating airports would share 

costs for collecting the fees and a clearinghouse would need to be 

formed to allocate the collections among airports.

• Connecting passengers with multiple airports in an itinerary would 

either need to visit multiple airport Web sites or a third-party Web site 

would have to include all airport PFCs for that itinerary.

Page 12

 
Page 16 GAO-13-262R Passenger Facility Charges 

Emerging Technologies 

• Passengers would pay the PFC using their smartphone, 

pre-paid card, near field communication (NFC)-enabled

device, or other technology.

• We did not identify any airports that use this method for collecting 

airport passenger fees.

• Examples identified in other applications: EZ-Pass and SmarTrip.

• An airport could individually develop technology infrastructure to 

support collection at its airport. Alternatively, a third party could be 

used by airports to share costs for collecting the PFCs and allocating 

the collections among airports.

• Connecting passengers with multiple airports in their itinerary would 

either need to pay individually for each airport or a third-party would 

collect all airport PFCs imposed for that itinerary.

Page 13

 
Page 17 GAO-13-262R Passenger Facility Charges 

Key Considerations for Evaluating 

Alternative PFC Collection Methods

• Passenger Experience

• Customer Transparency

• Administrative Costs

• Technology Readiness

• Legal Impacts

Page 14

 
Page 18 GAO-13-262R Passenger Facility Charges 

Passenger Experience

All alternatives would diminish passenger experience.

• Kiosk or Counter: Introduces extra check-in step, which could 

increase airport check-in times and transfer times for 

connecting flights. Could lead to more missed connections.

• Internet or Online Payment: Introduces extra step during ticket 

purchase, which could create passenger confusion and 

irritation from entering credit card information twice. Research 

suggests passenger could abandon ticket purchase 

altogether.

• Emerging Technologies: Introduces an extra step to travel 

and presumes that a majority of travelers have the technology.

Page 15

 
Page 19 GAO-13-262R Passenger Facility Charges 

Customer Transparency

• All collection alternatives would decrease transparency 

because a passenger may not be aware of the PFC until after 

already purchasing ticket, particularly if alternative collection 

method is not universally implemented.

• Department of Transportation’s full-price advertising rule1

supports transparency of all mandatory charges associated 

with air transportation.

• Conversely, a passenger who pays the PFC directly to the 

airport may better understand that PFCs are used for airport 

infrastructure projects.

Page 16 114 C.F.R. § 399.84. 

 
Page 20 GAO-13-262R Passenger Facility Charges 

Administrative Costs

• All collection alternatives would require development of new 

infrastructure.

• For example, kiosks, payment systems, software platform, 

or clearinghouse.

• All alternatives would likely entail administrative costs greater 

than 11¢ per PFC that airports currently pay.

• For example, would require separate increased costs for 

collection and enforcement staff, payment validation 

systems, credit card processing fees, or revenue 

accounting systems.

Page 17

 
Page 21 GAO-13-262R Passenger Facility Charges 

Technology Readiness

All alternatives would present some technological challenges or raise 

security concerns.

• Kiosk or Counter: Tested at smaller airports. May not be scalable to 

large airports due to space constraints and large volume of 

passengers.

• Online Payment and Emerging Technologies: Unclear how charges 

could be verified (proof of purchase) or how to make refunds. 

Security concerns would arise with sharing passenger data and 

credit card information. Would require a backup payment method 

for passengers who do not have or opt not to use these 

technologies for ticket purchase. Current estimates are that 70 

percent of airline passengers travel with smartphones1 and that 

percentage is expected to grow.

Page 18 1 Air Transport World and SITA, 2012 Passenger Self-Service Survey, 2012. 

 
Page 22 GAO-13-262R Passenger Facility Charges 

Legal Impacts

• Regulations stipulate that only airlines can collect PFCs.1

• The Anti-Head Tax Act was enacted in response to significant 

public objection to state and local head taxes on air 

commerce.2

• Full-price advertising rule requires airlines to include PFCs 

and all other taxes and mandatory fees in disclosing the full 

listed price for air transportation.3

• Airports may need access to personal information such as 

passenger itineraries, which airlines are not required to share.

Page 19

114 C.F.R. § 158.45.

21973 U.S.C.C.A.A.N. 1434, 1446.

314 C.F.R. § 399.84. 

 
Page 23 GAO-13-262R Passenger Facility Charges 

No Alternatives Identified Are Currently 

Better Than Existing Collection Method

Key 

considerations

Alternatives (relative to the current collection method)

Kiosk or Counter Internet or 

Online Payment

Emerging 

Technologies

Passenger 

Experience

Negative Negative Negative

Transparency Negative Negative Negative

Costs Negative Negative Negative

Technology 

Readiness

Neutral Negative Negative

Legal Impacts Would require modifications to current law

Source: GAO Page 20

 
Page 24 GAO-13-262R Passenger Facility Charges 

Aviation Stakeholders Support Current 

Collection Method

• All airport authorities (9) and airlines (4) that we spoke with support current 

method.

• Airports primarily support increasing the PFC cap with the current 

collection method, but might consider using an alternative method if the 

PFC cap was lifted.

• Airlines do not support increasing the PFC regardless of the collection 

method used.

• Other stakeholders that we spoke with also support current method.

• Consumer groups.

• Travel agents.

• Technology stakeholders.

• FAA and DOT.

• Alternative collection methods are not a priority for the Airports Council 

International–North America or U.S. Travel Association (USTA), among others.

Page 21

(540251) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (www.gao.gov). Each weekday afternoon, 

GAO posts on its website newly released reports, testimony, and 

correspondence. To have GAO e-mail you a list of newly posted products, 

go to www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.