1. What is a Passenger Facility Charge?
   
   It's a user tax. You are paying it each time you buy an airplane ticket involving a takeoff from Juneau, Ketchikan or someplace outside of Alaska. The money is dedicated to pay for airport improvement projects pre-approved by the FAA.
   
   
2. How much am I paying?
   
   You pay up to $6 on a one way ticket and up to $12 on a round trip ticket.
   
   
3. What am I getting in return for this tax?
   
   Airports are being improved in Seattle, Portland, San Francisco, Los Angeles, Salt Lake City, Denver and virtually every other major airport within two stops of Anchorage, but not Anchorage.
   
   
4. Aren't Alaskan airports receiving improvements from this tax; if not, why not?
   
   No, Alaska's state owned airports, including Anchorage and Fairbanks, receive no benefits from this tax because the Governor won't apply for participation in the program. The Juneau Airport receives benefits because it's a municipal airport and their local government applied for the program. Every time someone in Anchorage flies roundtrip to Juneau we pay Juneau a $3 tax to improve their airport. If we extend our roundtrip to Seattle then we also pay Seattle's airport $3. The total tax is $6 but we get zero for Anchorage's airport.
   
   If Anchorage International Airport was part of the program, then on the outbound trip, Anchorage would get the first three dollars, Juneau would get the second three dollars and Seattle would get zero. On the return trip, Seattle would get the first three dollars, Juneau would get the second three dollars and Anchorage would get zero. We would capture $3, i.e., twenty-five percent, of the taxes paid for Anchorage.
   
   
5. That doesn't seem very good. We pay 100% of the tax and only get back 25%.
   
   Our capture is greater when only state operated airports are included in the itinerary. For example, if Fairbanks and Anchorage are part of the program, and the itinerary is from Fairbanks to Anchorage and Anchorage to Seattle, then on the outbound trip Fairbanks gets $3, Anchorage gets $3 and Seattle gets zero. On the return trip, Seattle would get $3, Anchorage would get $3 and Fairbanks would get zero. We capture 75% of the tax for Alaskan airports with this itinerary. But, remember, people from outside Alaska flying to destinations beyond Anchorage also pay the tax that benefits Anchorage.
   
   The operative rule is that on the outbound trip, the tax is collected by the first two participating airports, excluding the destination airport. On the return trip, the tax is collected by the last two participating airports, excluding the destination airport.
   
   
6. How much could we get if the state participated in the program?
   
   FAA estimates that Anchorage would receive about $5 million per year. I don't have an estimate for Fairbanks. Bear in mind that we are already paying most of that tax. We're just not getting any benefits from it.
   
   
7. What do you mean, "we're paying most of the tax already?" Will we be taxed more if the governor applies for the program?
   
   Some travelers who do not presently pay the tax, would have to start paying. For example, a round-trip traveler from Dillingham to Anchorage would have to pay three dollars that would be collected by Anchorage International Airport.
   
   
8. Can rural Alaska get any benefits from this tax or does all the money stay in Anchorage?
   
   The program is probably not economic for very small airports. But FAA will allow the state to pool revenue from several airports. This needs to be studied. But there is still no reason why Anchorage shouldn't proceed right away. Remember Anchorage International Airport services the whole state, not just Anchorage.
   
   
9. Outside of Anchorage where else is this Passenger Facility Charge being implemented?
   
   Juneau started in July 1998. Ketchikan (city operated) is scheduled to start this month. Kenai is inquiring into the application process. In the lower 48 there are more than 300 airports already participating and more than 100 applications in process. Anchorage International Airport is the only airport of its size that is not participating. We are way behind the curve. But, we are first in exporting the highest percentage of our PFC revenue to other states.
   
   
10. How long would it take to start Anchorage participating in the process?
    
    FAA estimates about six months. We have to show them how we plan to spend the money. But, approval is virtually guaranteed. Incidentally, the program is retroactive. It allows us to pay ourselves back for some expenditures we made since 1990.
    
    
11. How would the state spend the money at the Anchorage airport?
    
    We just sold $180 million in bonds to finance new improvements. The governor wants to borrow an additional $25 million. FAA and most legislators think PFC money should be used to pay off the debt.
    
    
12. Is anybody against collecting PFC's at Anchorage?
    
    Other than the governor, only ERA Aviation has expressed opposition to this program. Virtually every other airline operating in Anchorage is in favor of it.
    
    
13. What about the rumor that we'll lose other federal funds for airport development if we implement PFC's?
    
    FAA tells me that if that were true, no airport in the country would participate in the program. The rumor is a mischaracterization of the fact that half of Anchorage International Airport's money from FAA's Annual Entitlement Program would be displaced by the PFC revenue. This amounts to about $1.5 million. Anchorage is the only airport affected by this decrease. The decrease is offset by the $5 million from PFC's. Also, the displaced funds would go into a national small airport grant program to help those airports that are too small to implement PFC's. The state could apply for these funds on behalf of small rural airports.
    
    

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