Airport Alert: Lawmakers Release Details on COVID-19 Relief Deal; Plan Restores $2 Billion for Airports
December 21, 2020
After plans to eliminate proposed coronavirus relief funding for airports surfaced on Friday, Congressional leaders today unveiled the final details on a $900 billion coronavirus relief package that includes $2 billion for airports and concessionaires. Lawmakers plan to add the relief package to a $1.4 trillion omnibus appropriations bill and clear both before leaving town for the holidays. We will have details of the omnibus funding measure out separately as soon as possible.
Airport Funding Initially Zeroed Out: Based on reports we began receiving from Capitol Hill on Friday, negotiators were planning to completely eliminate funding for airports and ratchet back money for the airlines, transit, and busses. The plan was an attempt to provide funding for highways and state DOTs while keeping the 'top-line' funding level for transportation at $45 billion. If adopted, that plan would have rejected a bipartisan and bicameral proposal to provide more funding for airports.
Some – But Not All – Airport Funding Restored: Airports around the country quickly responded and successfully urged lawmakers to restore some funding for airports. Based on our discussions with key Congressional offices over the weekend, lawmakers received an enormous amount of input and feedback from airports. That outreach convinced lawmakers to restore at least some of the proposed funding for airports that had been on the cutting room floor.
After the ups and downs in the past three days, the final package includes $2 billion for airports and concessionaires. That's far less than what we were urging lawmakers to include in the coronavirus relief package. But it is $2 billion more than was on the table less than three days ago. House Democrats and the incoming Biden Administration intend to push another stimulus package early next year that could potentially open the door for additional airport funding.
Transportation: In addition to the funding for airports and concessionaires, the final coronavirus relief package includes $15 billion to extend the Payroll Support Program for the airlines -- $2 billion less than the bipartisan and bicameral plan proposed. It also contains another $1 billion for airline contractors that wasn't included in the initial framework.
Outside of aviation, the final agreement includes $10 billion for highways and state DOTs -- $2 billion less than the plan that was circulating on Friday. But negotiators also agreed to decrease funding for buses by $6 billion and transit by $1 billion in order to help pay for the highway initiative without raising the overall transportation number. Amtrak funding remained steady at $1 billion.
Aviation Provisions In Final Coronavirus Relief Package
Airports
Overall Funding: The bill includes $2 billion to help airports prevent, prepare for, and respond to coronavirus.
Commercial Service Airports: Of the $2 billion, $1.75 billion would be reserved for commercial service and certain cargo airports. Airports would be allowed to use funds for 'costs related to operations, personnel, cleaning, sanitization, janitorial services, combating the threat of pathogens at the airport, and debt service payments.'
Funds would be distributed based on a modified AIP apportionment run. The cargo set-aside would remain intact, and there would be no maximum grant amount or PFC turnback. It would preserve doubled entitlements and retain the $1 million minimum entitlement for smaller primary airports. Remaining funds – to the extent there are any -- would be distributed based on enplanements.
General Aviation Airports: The bill includes up to $45 million for nonprimary commercial service and general aviation airports. Of that amount, $5 million would be divided equally among nonprimary airports that participate in the contract tower program to cover lawful expenses to support operations.
Concessionaires: The measure provides $200 million to primary airports based on enplanements 'to provide relief from rents and minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal airport concessions.' Airports would be required to provide relief from the date of enactment until the sponsor has provided an amount equal to the grant amount 'to the extent practicable and to the extent permissible under state laws, local laws, and applicable trust indentures.' The measure calls for airports to provide relief 'to each eligible airport concession in an amount that reflects each eligible airport concession's proportional share of the total amount of the rent and minimum annual guarantees of all the eligible airport concessions at such airport.'
The bill requires airports to 'prioritize relief from rent and minimum annual guarantees to minority-owned business.' Only airport concessionaires that have certified they have not received a 'second draw or assistance for a covered loan' under the Payroll Protection Program that has been applied toward rent or MAGs is eligible for relief. Additionally, concessionaires that received airport assistance are prohibited from applying for a covered PPP loan for rent or MAG costs. Airports would be allowed to keep up to two percent of these funds to administer the relief.
Federal Share: Like the CARES Act, grants under this new proposal would not require a local match.
Eligibility: Any airport that received more than four years of operating expenses under the CARES Act would be ineligible for these funds.
Workforce Retention: The bill requires all airports except for nonhub or nonprimary airports that receive funding to "continue to employ, through February 15, 2021, at least 90 percent of the number of individuals employed (after making adjustments for retirements or voluntary employee separations) by the airport as of March 27, 2020."
Similar to the CARES Act, the workforce retention requirement may be waived by the Secretary of Transportation if a determination is made that the airport is 'experiencing economic hardship as a direct result of the requirement, or the requirement reduces aviation safety or security.'
Small Community Programs
Small Community Air Service Development: The bill includes a proposal from Senator Jeanne Shaheen (D-NH) that would provide an additional $5 million for a revised Small Community Air Service Development Program. The new initiative would focus on helping small communities that have had air service reduced or eliminated during the pandemic. Her proposal calls for an expedited application and review process and would eliminate the strings and restrictions attached to the traditional program.
Essential Air Service: The FY21 omnibus appropriations bill includes an additional $23.3 million for the Essential Air Service and Rural Improvement Fund to offset the loss in revenue from mandatory overflight fees during the pandemic. This is the same amount that lawmakers included in the bipartisan and bicameral coronavirus relief package.
Miscellaneous Airport Provisions
AIR Act: The FY21 omnibus appropriations bill includes the AIR Act – a AAAE-backed bill that would ensure that airports aren't unfairly penalized because of the dramatic decline in passengers and operations during the pandemic. The bipartisan measure was introduced by Senator Deb Fisher (R-NE) and Senate Aviation Subcommittee Ranking Member Krysten Sinema (D-AZ).
AIP Apportionments: The AIR Act would allow AIP apportionments in Fiscal Years 2022 and 2023 to be based on higher passenger numbers in Calendar Years 2018 or 2019 – whichever is higher – rather than Calendar Years 2020 or 2021.
Contract Towers: The bill would also protect airports that participate in the Contract Tower Program. The last FAA reauthorization bill included a welcome provision that eliminated the benefit-cost analysis (BCA) requirement for airports that participate in the program unless they have more than a 25 percent decrease in operations in a single year.
Because of the precipitous decline in operations this year, many airports that participate in the Contract Tower Program could be subject to a BCA because of an unforeseen global pandemic. The AIR Act would temporarily suspend the BCA requirement and ensure that airports are not required to come up with scarce local funds to participate in this critical safety program.
Airlines
Payroll Support Program: The bill includes $15 billion to extend the Payroll Support Program for the airlines -- $2 billion less than the bipartisan and bicameral plan proposed. The final package also added another $1 billion for airline contractors.
Minimum Air Service Guarantees: Like the CARES Act, the bill would authorize DOT to 'require, to the extent reasonable and practicable, an air carrier provided financial assistance under this subchapter to maintain scheduled air transportation, as the Secretary of Transportation determines necessary, to ensure services to any point served by that air carrier before March 1, 2020.'
The bill imposes other requirements on DOT when the agency implements the minimum air service guarantees. For instance, it would require DOT to 'take into consideration the air transportation needs of small and remote communities, the need to maintain well-functioning health care supply chains, including medical devices and supplies, and pharmaceutical supply chains.'
Sense of Congress: It includes 'Sense of Congress' language proposed by Senator Shaheen that would require DOT to consider 'the number of airports and communities have lost air service as a result of consolidated operations by covered air carriers, as permitted by the Department of Transportation, including smaller airports that are located near larger airports.' The provision is aimed at DOT's decision under the CARES Act to require carriers to provide service to 'points' rather than individual airports.
Airport Funding Initially Zeroed Out: Based on reports we began receiving from Capitol Hill on Friday, negotiators were planning to completely eliminate funding for airports and ratchet back money for the airlines, transit, and busses. The plan was an attempt to provide funding for highways and state DOTs while keeping the 'top-line' funding level for transportation at $45 billion. If adopted, that plan would have rejected a bipartisan and bicameral proposal to provide more funding for airports.
Some – But Not All – Airport Funding Restored: Airports around the country quickly responded and successfully urged lawmakers to restore some funding for airports. Based on our discussions with key Congressional offices over the weekend, lawmakers received an enormous amount of input and feedback from airports. That outreach convinced lawmakers to restore at least some of the proposed funding for airports that had been on the cutting room floor.
After the ups and downs in the past three days, the final package includes $2 billion for airports and concessionaires. That's far less than what we were urging lawmakers to include in the coronavirus relief package. But it is $2 billion more than was on the table less than three days ago. House Democrats and the incoming Biden Administration intend to push another stimulus package early next year that could potentially open the door for additional airport funding.
Transportation: In addition to the funding for airports and concessionaires, the final coronavirus relief package includes $15 billion to extend the Payroll Support Program for the airlines -- $2 billion less than the bipartisan and bicameral plan proposed. It also contains another $1 billion for airline contractors that wasn't included in the initial framework.
Outside of aviation, the final agreement includes $10 billion for highways and state DOTs -- $2 billion less than the plan that was circulating on Friday. But negotiators also agreed to decrease funding for buses by $6 billion and transit by $1 billion in order to help pay for the highway initiative without raising the overall transportation number. Amtrak funding remained steady at $1 billion.
Aviation Provisions In Final Coronavirus Relief Package
Airports
Overall Funding: The bill includes $2 billion to help airports prevent, prepare for, and respond to coronavirus.
Commercial Service Airports: Of the $2 billion, $1.75 billion would be reserved for commercial service and certain cargo airports. Airports would be allowed to use funds for 'costs related to operations, personnel, cleaning, sanitization, janitorial services, combating the threat of pathogens at the airport, and debt service payments.'
Funds would be distributed based on a modified AIP apportionment run. The cargo set-aside would remain intact, and there would be no maximum grant amount or PFC turnback. It would preserve doubled entitlements and retain the $1 million minimum entitlement for smaller primary airports. Remaining funds – to the extent there are any -- would be distributed based on enplanements.
General Aviation Airports: The bill includes up to $45 million for nonprimary commercial service and general aviation airports. Of that amount, $5 million would be divided equally among nonprimary airports that participate in the contract tower program to cover lawful expenses to support operations.
Concessionaires: The measure provides $200 million to primary airports based on enplanements 'to provide relief from rents and minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal airport concessions.' Airports would be required to provide relief from the date of enactment until the sponsor has provided an amount equal to the grant amount 'to the extent practicable and to the extent permissible under state laws, local laws, and applicable trust indentures.' The measure calls for airports to provide relief 'to each eligible airport concession in an amount that reflects each eligible airport concession's proportional share of the total amount of the rent and minimum annual guarantees of all the eligible airport concessions at such airport.'
The bill requires airports to 'prioritize relief from rent and minimum annual guarantees to minority-owned business.' Only airport concessionaires that have certified they have not received a 'second draw or assistance for a covered loan' under the Payroll Protection Program that has been applied toward rent or MAGs is eligible for relief. Additionally, concessionaires that received airport assistance are prohibited from applying for a covered PPP loan for rent or MAG costs. Airports would be allowed to keep up to two percent of these funds to administer the relief.
Federal Share: Like the CARES Act, grants under this new proposal would not require a local match.
Eligibility: Any airport that received more than four years of operating expenses under the CARES Act would be ineligible for these funds.
Workforce Retention: The bill requires all airports except for nonhub or nonprimary airports that receive funding to "continue to employ, through February 15, 2021, at least 90 percent of the number of individuals employed (after making adjustments for retirements or voluntary employee separations) by the airport as of March 27, 2020."
Similar to the CARES Act, the workforce retention requirement may be waived by the Secretary of Transportation if a determination is made that the airport is 'experiencing economic hardship as a direct result of the requirement, or the requirement reduces aviation safety or security.'
Small Community Programs
Small Community Air Service Development: The bill includes a proposal from Senator Jeanne Shaheen (D-NH) that would provide an additional $5 million for a revised Small Community Air Service Development Program. The new initiative would focus on helping small communities that have had air service reduced or eliminated during the pandemic. Her proposal calls for an expedited application and review process and would eliminate the strings and restrictions attached to the traditional program.
Essential Air Service: The FY21 omnibus appropriations bill includes an additional $23.3 million for the Essential Air Service and Rural Improvement Fund to offset the loss in revenue from mandatory overflight fees during the pandemic. This is the same amount that lawmakers included in the bipartisan and bicameral coronavirus relief package.
Miscellaneous Airport Provisions
AIR Act: The FY21 omnibus appropriations bill includes the AIR Act – a AAAE-backed bill that would ensure that airports aren't unfairly penalized because of the dramatic decline in passengers and operations during the pandemic. The bipartisan measure was introduced by Senator Deb Fisher (R-NE) and Senate Aviation Subcommittee Ranking Member Krysten Sinema (D-AZ).
AIP Apportionments: The AIR Act would allow AIP apportionments in Fiscal Years 2022 and 2023 to be based on higher passenger numbers in Calendar Years 2018 or 2019 – whichever is higher – rather than Calendar Years 2020 or 2021.
Contract Towers: The bill would also protect airports that participate in the Contract Tower Program. The last FAA reauthorization bill included a welcome provision that eliminated the benefit-cost analysis (BCA) requirement for airports that participate in the program unless they have more than a 25 percent decrease in operations in a single year.
Because of the precipitous decline in operations this year, many airports that participate in the Contract Tower Program could be subject to a BCA because of an unforeseen global pandemic. The AIR Act would temporarily suspend the BCA requirement and ensure that airports are not required to come up with scarce local funds to participate in this critical safety program.
Airlines
Payroll Support Program: The bill includes $15 billion to extend the Payroll Support Program for the airlines -- $2 billion less than the bipartisan and bicameral plan proposed. The final package also added another $1 billion for airline contractors.
Minimum Air Service Guarantees: Like the CARES Act, the bill would authorize DOT to 'require, to the extent reasonable and practicable, an air carrier provided financial assistance under this subchapter to maintain scheduled air transportation, as the Secretary of Transportation determines necessary, to ensure services to any point served by that air carrier before March 1, 2020.'
The bill imposes other requirements on DOT when the agency implements the minimum air service guarantees. For instance, it would require DOT to 'take into consideration the air transportation needs of small and remote communities, the need to maintain well-functioning health care supply chains, including medical devices and supplies, and pharmaceutical supply chains.'
Sense of Congress: It includes 'Sense of Congress' language proposed by Senator Shaheen that would require DOT to consider 'the number of airports and communities have lost air service as a result of consolidated operations by covered air carriers, as permitted by the Department of Transportation, including smaller airports that are located near larger airports.' The provision is aimed at DOT's decision under the CARES Act to require carriers to provide service to 'points' rather than individual airports.
