Airport Improvement Program

The Airport Improvement Program provides federal grants to commercial service and general aviation airports across the country for projects to enhance airport safety, capacity, security, and to address environmental concerns.  The program has a proven, decades-long record of success in financing airport infrastructure and ensuring the safe and efficient operation of the nation’s airport system.  

AIP is a critical source of funding for airports of all sizes including smaller airports around the country that don’t generate sufficient revenue from Passenger Facility Charges or have easy access to the bond market.  Large and medium hub airports also depend on AIP funding – particularly money distributed through discretionary grants and the Letter of Intent Program – to help pay for large capacity-enhancing projects.  

AIP funds key airport projects that improve safety, security, capacity, and efficiency.  For instance, airports often rely on federal grants to construct and rehabilitate runways, taxiways, and aprons.  According to the Federal Aviation Administration, airports use more than 60 percent of AIP funds for those three categories of airside projects.

The federal AIP program is supported entirely by users of the aviation system through various aviation excise taxes that are deposited into the Airport and Airway Trust Fund.  The program does not receive any revenue from the general fund.  Airport sponsors are usually required to pay a local match including 25 percent for large and medium hubs and up to10 percent for smaller airports.

Increasing Capital Needs:  With increasing passenger levels and aging facilities, large and small airports face significant capital needs.  As part of its 2019 National Plan of Integrated Airports System report, the Federal Aviation Administration estimated that airports have $35.1 billion in AIP-eligible projects between 2019 and 2023 or more than $7 billion annually. That amount is a 7 percent increase from the FAA’s previous estimate. 

Aside from temporary increases in Fiscal Years 2018, 2019 and 2020, Congress has authorized and appropriated $3.35 billion annually for AIP in recent years.  Of that amount, less than $3.2 billion is designated for actual capital projects.  That amount is only enough to cover only half of airport’s annual AIP-eligible projects.  

The FAA’s NPIAS provides a snapshot of certain airport capital needs.  But the FAA estimate only reflects some projects that are eligible for federal funds.  It does not include other necessary but ineligible infrastructure such as certain terminal projects that airports fund with PFCs and other revenue sources.  That overall annual number is substantially higher. 

Status

FY20 Appropriations: In December 2019, lawmakers passed two packages of must-pass appropriations bills including one (H.R. 1865) that contained funding for the Department of Transportation, the Federal Aviation Administration and other federal agencies.  

• Traditional AIP Funding:  The final FY20 spending package included $3.35 billion in “traditional” AIP account.  Of that amount, $116.5 million would go toward administration expenses, $15 million for the Airport Cooperative Research Program, and $10 million for the Small Community Air Service Development Program.  Another $39.2 million would go toward Airport Technology Research.

• Supplemental AIP Funding: The final bill includes another $400 million for supplemental discretionary grants that would be available to airports of all sizes.  The latest annual funding bill brings the total supplemental discretionary funding for airports to just under $2 billion over the past three fiscal years.

• Priority Consideration:  The FAA reauthorization bill, which Congress passed in 2018, requires the FAA to use not less than 50 percent of supplemental AIP funds for projects at small hub, non hub and nonprimary airports. The joint explanatory statement accompanying the final FY20 spending bill “directs the FAA to restrict this set-aside to 50 percent, and use the remaining funds for grants at medium hub and large hub airports.” 

The statement accompanying the final FY20 spending bill also “directs the FAA to provide priority consideration for grant applications that complete previously awarded discretionary grant projects, and to provide priority consideration based on project justification and completeness of pre-grant actions.”
 
FY19 Appropriations: In February 2019 Congress passed H.J. Res. 31, a package of FY19 spending bills that contained funding for DOT and numerous other federal agencies.  The measure included $3.35 billion in regular AIP funding and another $500 million for supplemental discretionary grants.  Unlike the FY18 DOT/FAA spending bill, the FY19 measure did not include language requiring DOT to give “priority consideration” to certain nonprimary, nonhub and small airport projects. 

FY18 Appropriations: The FY18 omnibus spending bill included $3.35 billion in traditional AIP funding and an additional $1 billion in supplemental funding for airport infrastructure projects, which the FAA has distributed through AIP discretionary grants.  (That extra $1 billion for airports was made available after Congress approved a two-year budget deal in early 2018.  That agreement expires on October 1, 2019.)

For the $1 billion in supplemental discretionary funding provided in FY18, DOT was required by Congress to give priority consideration to projects at “(a) nonprimary airports that are classified as Regional, Local, or Basic airports and are not located within a Metropolitan or Micropolitan Statistical Area as defined by the Office of Management and Budget, or (b) primary airports that are classified as Small or Nonhub airports.”  The federal share for projects at nonprimary airports is 100 percent.

FAA Reauthorization Bill:  In late 2018, Congress approved H.R. 302, the FAA Reauthorization Act of 2018.  The bill authorized $3.35 billion annually for AIP through FY23.  That flat funding is particularly disappointing since airports have enormous infrastructure needs, and the legislation failed to raise the federal cap on local PFCs. 

The FAA bill also authorized -- but did not guarantee -- more than $1 billion annually for construction projects at airports smaller than large hubs. That proposed revenue would need to come from general fund instead of the Airport and Airway Trust Fund and compete with other transportation programs as part of the annual appropriations process. 

The final FAA bill also included some programmatic changes.  For instance, it included two Senate provisions regarding the minimum entitlement. One would allow certain airports to continue to receive the minimum entitlement even if their enplanements dip below 10,000. The other would allow commercial service airports with more than 8,000 enplanements to receive $600,000 in AIP entitlements.

AAAE Views

AAAE strongly supports AIP and continue to urge Congress to increase funding for the regular program and to provide additional funding for discretionary grants to be available to airports of all sizes.  

Related Information

• AAAE’s full list of priorities for the FY20 DOT/FAA funding bill, including $3.35 billion for the regular AIP program and another additional $1 billion in supplemental discretionary funds, may be viewed here.

• FAA’s AIP Fact Sheet may be viewed here.

• A side-by-side chart that compares the House- and Senate-passed versions of the FY20 DOT appropriations bills with the final spending package may be viewed here.

Contact

Brad Van Dam
Senior Vice President, Government Affairs
(703) 797-2534