GBTA Pleased Congress Heard Message That PFC Increase Would Harm U.S. Economy
PFC Increase Left Out of Omnibus Spending Bill
Alexandria, VA (March 21, 2018) – Tonight, Congress released the details of the Fiscal Year 2018 Omnibus spending bill, which would fund the government through September. The Global Business Travel Association (GBTA) was pleased to see that attempts to increase air passengers’ flight costs were rebuffed. Congressional leaders rejected a proposal from Senator Susan Collins (R-ME) to increase the cap on passenger facility charges (PFC) from $4.50 to $8.50.
Currently, PFCs are capped at $4.50 per flight segment with a maximum of two PFCs charged on a one-way trip or four PFCs on a round trip, for a maximum of $18.00 total. If the increase had gone through that maximum would have jumped to $26, meaning an estimated $2.6 billion would have been levied on all travelers purchasing airlines tickets.
The impact of the rejected PFC hike would have been drastic:
A reduction of $2.74 billion of airline tickets sold in the United States
A decrease of $3.5 billion in U.S. GDP
Job loss by nearly 500,000 jobs
“Congress has again recognized that such a large increase of the PFC is simply unwarranted,” said Michael W. McCormick, GBTA executive director and COO. “Travel in general, and specifically business travel, is greatly impacted by increased taxes and fees. Rejecting this increase, is a positive step towards continued business travel growth, which drives lasting economic growth.”
GBTA research has found that for every 1 percent change in business travel spending, the U.S. economy gains or loses 74,000 jobs, $5.5 billion in GDP, $3.3 billion in wages and $1.3 billion in taxes. Taxes and fees associated with travel typically lead to a negative effect.
About the Global Business Travel Association
The Global Business Travel Association (GBTA) is the world’s premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. GBTA’s 9,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA delivers world-class education, events, research, advocacy and media to a growing global network of more than 28,000 travel professionals and 125,000 active contacts. To learn how business travel drives lasting business growth, visit www.gbta.org.