Atlantic City International Airport plans to raise nearly $30 million in funding over the next 10 years through a passenger fee that has been in place since the late 1990s.
Known as a “passenger facility charge,” the money it generates will help pay for construction projects already completed, now underway or built in the future, according to the South Jersey Transportation Authority, the airport owner.
Hundreds of airports nationwide rely on the fee, imposed on departing passengers, to finance construction projects. Atlantic City International began charging its departing passengers $3 per ticket in 1999, but later increased the fee to $4.50, the maximum allowed by Congress.
The South Jersey Transportation Authority has filed a public notice announcing plans to seek Federal Aviation Administration approval to continue charging the $4.50 fee for the next 10 years, generating an estimated $29.6 million in the process.
“It’s all but finalized,” authority spokesman Kevin Rehmann said. “It’s more of a formality than anything else.”
Most of the funding will simply reimburse the authority for projects that have already been built. The biggest project included a $33.2 million expansion of the passenger terminal completed in 2012. The authority is seeking reimbursement of $28.3 million for the terminal’s costs, the public notice says.
Rehmann said money generated by the departure fee will help the authority recoup construction costs that were part of funding agreements under the federal Airport Improvement Program.
A series of projects now underway will also be financed with help from the fee, including an aircraft de-icing facility, security fencing, environmental work and upgrades for an airport apron and taxiway, Rehmann said.
The authority also plans to fund future airport improvements using some of the revenue generated by the fee. Rehmann explained that a list of new projects will be developed later.
“Obviously, that’s a long-term thing,” he said of the planning process.
Other funding sources are also tapped for improvements at Atlantic City International. The transportation authority’s 2014 capital budget includes $11.7 million in airport funding. Over the years, the authority has used toll revenue from the Atlantic City Expressway, another facility it owns, to subsidize the money-losing airport.
Another government agency, the Port Authority of New York and New Jersey, took over the airport’s management last July as part of Gov. Chris Christie’s initiative to revive the struggling Atlantic City economy. The Port Authority, also the operator of the major airports in New York and North Jersey, is expected to use its clout in the aviation industry to lure more air service to Atlantic City. Already, it has signed up United Airlines for daily flights to Atlantic City from Chicago and Houston beginning April 1.
The more passengers the airport has, the more money that will be generated by the departure fee. Last year, Atlantic City International handled 1.1 million passengers, an 18 percent decline from nearly 1.4 million in 2012. Analysts blamed the drop on the lingering effects of Hurricane Sandy on the Atlantic City travel market.
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