06.22.04

Cantwell Questions Proposed New Tax Increase on Airlines

Cites negative impact on regional airports like those in Spokane, Tri-Cities

WASHINGTON, D.C. – Today Sen. Maria Cantwell (D-WA) asked Department of Homeland Security Under Secretary Asa Hutchinson about the potential negative impacts of a proposed increase in airport security fees on economic development in areas served by regional airports in a hearing of the Senate Commerce Committee.

"Improving aviation security must continue to be a national priority, but we can't pay for it by grounding business at our regional airports," Cantwell said. "For many cities, regional airports are economic gateways to their communities. Increasing taxes on airlines and their passengers amounts to slamming the door on economic opportunity. The federal government must shoulder greater responsibility for these critical investments in our national transportation infrastructure."

The Bush Administration has proposed increasing the Air Carrier Security Fee, which currently costs the airline industry $315 million, to $750 million – a $435 million increase. Increases in security fees and security burdens have already had a negative impact on passengers – not only by increasing prices per ticket, since the all the fees are being passed on by the airlines to passengers, but also by decreasing flight options for regional airports that depend on limited airlines feeding into major airports.

"We are very concerned about any additional fees assessed to airline tickets," said Todd Woodard, Director of Marketing/Public Affairs at Spokane International Airport. "Spokane's short haul markets such as Seattle, Portland, and Boise have experienced sharp declines in passenger traffic over the last three years and price has certainly been a contributing factor. We appreciate Senator Cantwell's attention to this matter of critical economic importance to Spokane and the entire Pacific Northwest region."

Regional airports in Washington state have already been effected by the increase in security fees. Since September 11, departing flights from Spokane to Seattle have dropped from 34 to 25, a decrease of 26 percent. Over the same period, Delta Airlines has changed the planes with which it serves the Tri-Cities from 737s to RJ-50s, reducing the available seats to and from Seattle by 57 percent. Horizon has also cut two daily flights to and from the Tri-Cities.

Under current law, federal aviation security is funded through the Transportation Security Administration (TSA) and Federal Aviation Administration (FAA), which received $3.34 billion and $561 million, respectively, for aviation security this year. In addition to federal funding, the aviation security system receives $2.57 billion through five fees and taxes that are placed on airlines and ports. Of these taxes and fees, two – the Federal Security Surcharge and the Air Carrier Security Fee – are devoted to security.