Cares Act

The spread of the coronavirus has had a severe financial impact on airports, airlines and the entire aviation industry.  Passenger levels began dropping precipitously in March, and airport revenue took a similar nosedive.  With a significant drop in revenue, airports faced tough questions about how they would be able to cover their personnel costs, ongoing operating expenses, and $7 billion in debt payments due in 2020.  

AAAE, ACI-NA and airports around the country quickly mobilized and urged Congress to help airports deal with the global pandemic.  Airports repeatedly weighed in with their elected officials and highlighted how the global pandemic was impacting their facilities.  Meanwhile, AAAE and ACI-NA urged Congress to include much-need airport assistance in a coronavirus relief package that lawmakers began drafting in March.

As part of that effort, AAAE President and CEO Todd Hauptli and ACI-NA President and CEO Kevin Burke on March 18 sent a letter to Senate and House leaders calling on Congress to provide $10 billion to help airports deal with the current crisis.  The two associations called for a rapid infusion of grants to help airports weather the immediate storm.

Later that month, Congress and the administration reached an agreement on a $2 trillion coronavirus relief package that included $10 billion to help airports impacted by the global pandemic.  The unprecedented funding in the CARES Act (H.R 748) provided a critical assistance to airports and allowed them to pay for operating expenses, debt service payments and new COVID-19-related expenses.

Although passenger levels began ticking up in April, it became increasing clear that the road to recovery would take a significant amount of time and additional resources.  On May 6, Hauptli testified before the Senate Committee on Commerce, Science and Transportation during a hearing on how COVID-19 is impacting the aviation system.  During the session, Hauptli urged key lawmakers to continue helping commercial service and general aviation airports severely impacted by the coronavirus.

"Given the significant decline in aviation activity and revenue, and the precipitous drop in PFC collections that help support bond payments, airports will need additional federal assistance at least as large as the initial amount provided in the CARES Act," Hauptli said.  He also called on Congress to provide greater financial support to concessionaires and other airport partners that have been significantly impacted by the pandemic.

As talks on another coronavirus relief package began heating up in July, Hauptli and Burke urged Congressional leaders to provide another round of assistance to airports.  The two urged lawmakers to provide airports with an additional $15 billion:  $13 billion for commercial service airports, $1.5 billion for general aviation airports, and $500 million to cover the local match for Airport Improvement Projects funded in FY21.

“CARES Act funding has provided a critical lifeline to airports in the near-term that will protect jobs, enhance cleaning and sanitization efforts, ensure that debt payments can be made and help keep construction projects moving forward, Hauptli and Burke wrote.  “Unfortunately, the relief provided by CARES Act funding is only temporary given the depths of the crisis.”

Summary

The following is a summary of the some of the key airport- and airline-related provisions in H.R. 748, Coronavirus Aid, Relief, and Economic Security Act:  

Airport Funding 

$10 Billion in Overall Funding: The final bill includes $10 billion "to prevent, prepare for, and respond to the coronavirus to remain available until expended." Airports would not be required to pay a local match for federal grants like they do for traditional Airport Improvement Program grants. Funds would come the general fund rather than the Airport and Airway Trust Fund.
 
$7.4 Billion for Any Lawful Purpose: Of the $10 billion, $7.4 billion would go toward airports for "any purpose for which airport revenues may be lawfully used" at a 100 percent federal share. Of that amount, funds would be distributed in the following ways:

Grants Based on Enplanements: The bill would require the FAA to distribute 50 percent of the funds, or $3.7 billion, to airports based on their "calendar year 2018 enplanements as a percentage of total 2018 enplanements for all commercial service airports."

Grants Based on Debt Service: The remaining 50 percent of the $7.4 billion would be dedicated toward helping airports with their debt service payments. The FAA would be required to distribute funds in this category based on "an equal combination of each sponsor's fiscal year 2018 debt service as a percentage of the combined debt service for all commercial service airports and each sponsor's ratio of unrestricted reserves to their respective debt service."

$2 Billion for Apportionments: The bill includes another $2 billion that airports could use for any lawful purpose without paying a local match. Funds would be distributed based on a modified apportionment formula in a way that would help large and small airports.  It would  eliminate PFC "turnbacks" for large and medium hub airports and remove the maximum apportionment cap.
 
It would preserve doubled entitlements and retain the $1 million minimum entitlement for smaller primary airports, which are in place when Congress appropriates $3.2 billion or more for AIP in a fiscal year. The bill would also preserve the $600,000 apportionments for airports that have between 8,000 and 10,000 enplanements. Any remaining funds after the apportionment run would be distributed like the $7.4 billion category above.
 
$500 Million for 100 Percent Federal Share of FY20 AIP Grants: The bill calls for not less than $500 million to pay a 100 percent federal share for AIP funding that Congress already approved as part of the Fiscal Year 2020 appropriations process.
 
$100 Million for General Aviation Airports: $100 million would be reserved for general aviation airports.  GA airports could use the funds “for any purpose for which airport revenues may lawfully be used.”  The bill requires DOT to apportion the funds “directly to each eligible airport” based on categories published in the most current National Plan of Integrated Airport Systems.  The bill would also eliminate the local match requirement for GA airports.
 
Workforce Retention: The final bill includes a House proposal that would require airports receiving federal funds to continue to employ "at least 90 percent of the number of individuals employed by the airport" from when the bill is enacted into law through December 31, 2020.
 
However, the requirement would not apply to non-hub or non-primary airports. The bill would also allow DOT to waive that workforce retention requirement if the agency determines the airport is experiencing "economic hardship" or if the requirement would undermine aviation safety and security. It is our understanding that this requirement applies only to direct employees of the airport, not tenants.
 
Airport Concessions: The final bill does not include a House proposal that would have required airports use a portion of federal funds "to provide financial relief to airport concessionaires experiencing economic hardship...."
 
Administrative Expenses: The plan would allow the FAA to retain up to 0.1 percent of overall airport funding - or $10 million - to administer the airport grants.
 

Small Community Programs 

Essential Air Service: The bill would provide an additional $56 million for the Essential Air Service Program.
 

Security Provisions 

REAL ID: The bill would extend the REAL ID requirement until not earlier than September 30, 2021 - a year later than the current enforcement deadline.  However, the administration isn’t waiting for the bill to be enacted into law. Acting DHS Secretary Chad Wolf announced on March 26 that the agency extended the REAL ID enforcement by a year.

Transportation Security Administration: The bill includes $100 million for TSA to spend, in part, on "cleaning and sanitation at checkpoints and airport common areas...." The agency would also be allowed to use funds for overtime and explosive detection materials.

Status

The President signed the H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27.  

Testimony

AAAE President and CEO Todd Hauptli on May 6 testified before the Senate Committee on Commerce, Science and Transportation during a hearing on how the COVID-19 pandemic is impacting the aviation system.  During the hearing, Hauptli urged key lawmakers to continue helping commercial service and general aviation airports severely impacted by the coronavirus.

Letters

Hauptli and ACI-NA President and CEO Kevin Burke on July 9 urged Congressional leaders in both chambers to provide another round of assistance to help airports that have experienced significant drops in passengers and revenue as a result of the global pandemic.

The President signed the CARES Act into law on March 27.  On the same day, AAAE President and CEO Todd Hauptli on March 27 wrote FAA Administrator Steve Dickson urging the agency to distribute the emergency coronavirus funding to airports as quickly as possible and with as few strings attached as possible.

On March 20, Senator Jeanne Shaheen (D-NH) and bipartisan group of 39 other Senators sent a letter to the President urging him to help airports dealing with the COVID-19 outbreak.

Hauptli and Burke on March 18 sent a letter to Senate and House leaders calling on Congress to quickly provide airports with an influx of $10 billion to help airports deal with the current crisis. 
 

Related Information

  • The FAA has information on CARES Act grants for airports on its website.
  • The FAA on April 14 released a presentation on CARES Act grants for airports.
  • On the same date, the agency released two spreadsheets – one showing how much individual airports can expect to receive from the CARES Act and another showing how much each state is slated to receive.
 

Contact

Brad Van Dam
Senior Vice President, Government Affairs
703.797.2534