Airport Alert: Final Coronavirus Relief Package to Include $10 Billion for Airports

As we reported this morning, lawmakers have reached an agreement on a third coronavirus relief package. Although final language hasn't been released yet, the package is expected to provide $10 billion to airports that have seen their passenger levels and revenue drop due to the global pandemic. The Senate is expected to pass the measure today, clearing the way for the House to pass the bill and send it to the President's desk.

 

AAAE, ACI-NA and airports around the country have been working together and aggressively urging lawmakers in both chambers to take steps to help airports through the crisis. Based on language that it is circulating this morning, the final bill includes a number of our key recommendations: It would provide airports with an unprecedented $10 billion, give them much-needed flexibility on how to spend those funds, and do away with the local match requirement.

 

AAAE President and CEO Todd Hauptli praised lawmakers for coming together on a plan to help airports respond to the challenges related to the coronavirus:

 

"Airports across the country are reeling from the impacts of coronavirus and the precipitous decline in travel that has occurred in a matter of a few short weeks. Congress and the Administration have stepped up in a significant way to provide desperately needed relief to the aviation system, including $10 billion to airports, which will help keep people at work, avoid defaults on bonds, allow critical projects to continue, and assist with recovery efforts that will be massive over time. Like so many industries across the globe, airports and our airline partners face unprecedented challenges ahead, but the infusion of much-needed funding will help airport operators weather the storm in the near-term as we all focus on rebuilding for the future."

 

We would not have been successful without the repeated phone calls and emails from airport officials to their elected officials in the past couple of weeks. The continuous outreach from airports to Republicans and Democrats in both chambers made a big difference. We realize these are exceptionally challenging times and that we will have much more to do in the weeks and months ahead. But, for now, thank you for all your help in securing funding for airports in the coronavirus relief package.

 

Based on language circulating this morning, the following includes some of the key airport and airline provisions that we expect will be in the final package:

 

$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:

 

 

$2 Billion for Apportionments: The bill would also require the FAA to distribute $2 billion to airports based on a modified apportionment formula at 100 percent federal share 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 also at a 100 percent federal share.

 

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: Based on the language we have seen this morning, 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.

 

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

 

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.

 

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.

Loans and Loan Guarantees: The final bill includes a total of $58 billion in loans and grants for the airlines. Of that amount, $29 billion would go toward loans and loan guarantees for the airlines -- $25 billion for passenger carriers and $4 billion for cargo carriers.

 

Grants: Despite vocal opposition from some lawmakers, the bill includes another $29 billion in grants to air carriers and cargo air carriers to provide financial assistance for air carrier workers. This category would also be split at $25 billion for passenger carriers and $4 billion for cargo carriers. This is same amount that the airlines requested for immediate assistance.

 

Contractors: The bill also includes $3 billion in grants to airline contractors to help ground support and catering workers. The House proposal included a similar provision.

Aviation Excise Tax Holiday: The bill would suspend certain aviation excise taxes through the end of 2020. However, it would keep Passenger Facility Charges intact.

 

Executive Compensation/Stock Buybacks: There are some strings attached for the airline assistance. The measure would place limitations on executive compensation for carriers that receive assistance. It would also "ban stock buybacks for the term of the government assistance plus 1 year on any company receiving a government loan from the bill."

 

Service to Small Communities: The final bill would also allow DOT "to the extent reasonable and practicable" to require air carriers receiving loan and loan guarantees to continue providing air service to communities that had received service before March 1, 2020.