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September 10, 1999, FRIDAY, Late Sports Final Edition

SECTION: FINANCIAL; Pg. 59

LENGTH: 494 words

HEADLINE: Passenger fee hike still up in the air

SOURCE: JIM FROST

BYLINE: BY FRANCINE KNOWLES

BODY:
A tax that now adds an average of $ 9 to the cost of an airline ticket would double if a provision in a federal aviation bill, which passed the U.S. House and now rests in the Senate, remains in the final version.

The passenger facility charge, a tax collected by local governments to finance improvements at local airports, would rise to $ 6 per flight leg from $ 3 under the House bill -- one opposed by an airline trade group. The present cap of $ 12 per ticket also would double to $ 24 under the provision. "(Passengers) would be subject to as many as four passenger-facility charges on a round-trip itinerary," said Tom Chapman, legislative counsel with Southwest Airlines, which flies out of Midway Airport. "We and all airlines are opposed to the increase."

Southwest is especially concerned as a low-cost carrier, he said.

"If you're talking about $ 12 on a $ 1,000 walk-up fare, $ 24 won't make the difference on your deciding to fly," said Chapman. But it could for those traveling via Southwest, where many fares average $ 150 round trip and where many travelers would face the maximum $ 24, he said.

"You add $ 24 collected in local taxes with $ 24 collected in federal excise taxes (on a $ 150 fare), and you're talking roughly $ 50 in taxes. That would have an impact on a lot of folks, particularly for a family of four. You're talking $ 200 in taxes."

Sen. John McCain (D-Ariz.), chairman of the Senate Commerce, Science and Transportation Committee, opposes the tax increase. Neither of Illinois' senators, Republican Peter Fitzgerald and Democrat Richard Durbin, has taken a position on the charges.

The Airports Council International-North America, which represents airport operators, supports the increase. It contends airports won't be able to handle an expected surge in travel over the next decade without significant improvements.

The Chicagoland Chamber of Commerce hasn't opposed the increase, which is contained in a much larger transportation bill. The chamber supported the massive House bill, which also reauthorizes the Federal Aviation Administration, allows 50 more takeoffs and landings a day at O'Hare and provides $ 1 million more a year for airport improvements at O'Hare and $ 3.5 million for Midway.

The House bill, which passed in June, also would restrict money from the Aviation Trust Fund, which collects aviation taxes, to programs related to air travel.

There has been no debate in the Senate on the increase in the passenger facility charge or the other aviation provisions on the table.

Pia Pialorsi, spokesman for McCain, said, "We are waiting to see what path the Senate will take: whether we go straight to conference or whether there will be floor action on a comprehensive (FAA) reauthorization bill."

The City of Chicago, which last year collected $ 103 million in passenger facility charges at O'Hare and Midway airports, favors the increase.

Contributing: Lynn Sweet in Washington

GRAPHIC: The passenger facility charge assessed on airline tickets could double under a bill passed by the House that awaits Senate action. The charge would rise from $ 3 to $ 6 per flight leg and be capped at $ 24 per round-trip ticket. The money would be used to pay for airport improvements.

LOAD-DATE: September 20, 1999