Obama Budget Proposes Various Increases to Passenger Fees

President Barack Obama’s 2012 budget proposal includes a $1.1 billion reduction in federal grants for airport projects but allows airports to charge higher passenger fees. The increase would allow airports a new way to raise money to support large expansion projects like the ones proposed at La Guardia and Newark Liberty along with other expansion projects around the country The Wall Street Journal reports.

But airlines are expressing concern over additional fees saying that air travel demand could be affected as mounting fuel costs and passenger fees are making air travel more expensive. The fee which airports could impose would rise to $7 per passenger, up from the previous cap of $4.50 set in 2000.

Also in the budget proposal is a $5.50 fee on travellers coming to the U.S. from Canada who arrive via air or sea the Toronto Sun reports.

The fee, which all other international passengers except those from Mexico, the Caribbean, and Canada pay, would help cover security costs at U.S. airports.

The Obama administration is seeking ways to maintain and improve the nation’s infrastructure during a time of public concern over burdening national debt. By reducing federal funding to airports but allowing new ways for airports to raise capital for projects, the administration is hoping that debt reduction and airport construction can co-exist under the terms of the proposed budget which has yet to be adopted by Congress.

Such fees would help airports fund the projects necessary to keep up with projected growth but many airlines and consumers alike are concerned that the industry cannot withstand the increasing costs associated with air travel.

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