Airport Alert: House Clears Coronavirus Relief Bill - Measure Includes $10 Billion for Airports
The House this afternoon approved a $2 trillion coronavirus relief package that includes $10 billion to help airports impacted by the global pandemic. The chamber passed the measure by voice vote, clearing the way for the President to sign the bill into law.
Our attention will now turn to the FAA, which will be responsible for distributing the airport funding in the bill. AAAE will urge the FAA to work closely with the airport community to distribute the emergency coronavirus funding to airports as quickly as possible and with as few strings attached as possible as dictated by the coronavirus relief package.
Stay tuned for more updates on the implementation front. In the meantime, the following is an updated summary of the key airport- and airline-related provisions in H.R. 748, Coronavirus Aid, Relief, and Economic Security Act.
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 yesterday that the agency is extending the REAL ID enforcement deadline 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.
Airline Provisions
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.
