Action Alert: House Leaders Working on Revised Coronavirus Relief Package; Calls to House Offices Needed NOW to Urge Airport Relief
September 24, 2020
House Democratic leaders are drafting a $2.4 trillion coronavirus relief package that could be considered as early as next week that reportedly includes funding for the airlines in an effort to save tens of thousands of jobs. While the path forward for this latest relief proposal in the ongoing back and forth between Democrats and Republicans in Washington is unclear, we need your help NOW in pressing for the inclusion of funding for airports and the our industry partners.
As we have reported, the airlines have been mounting a full court press in effort to convince Congress to extend the Payroll Support Program before the end of the month. Airline CEOs and unions have been a constant presence in Washington recently. While extending the PSP is an important step we support to save airline jobs and protect service to small communities, Congress must also provide help for airports and our other industry partners, including concessionaires.
Please take action now to contact your Representative and ask them to ensure that the next coronavirus relief package from House leaders includes at least $10 billion for airports and an additional $3.5 billion to help concessionaires.
Talking Points
COVID-19 Impacts Are Severe for Airport Operators: America's airports - like the rest of the nation's aviation system - have been hit hard by the significant decline in travel caused by COVID-19. Passenger levels were down as much as 95 percent system-wide for an extended time and are still at only 25 to 30 percent of previous levels. Billions in revenue that airports expected to be generated by travelers has evaporated. Billions more in anticipated passenger facility charge (PFC) collections has also disappeared, depriving airports of a key source of revenue to support bond payments. Airports hold nearly $100 billion in collective debt, with some $7 billion in airport bond principal and interest payments due in 2020.
CARES Act Funding Provided a Critical Lifeline, But Additional Assistance is Required: 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. Unfortunately, the relief provided by CARES Act funding is only temporary given the depths of the crisis. The costs of maintaining facilities and meeting debt obligations, which total $500 million at one large hub airport alone in 2020, continue for airports even as airport revenue and PFC collections decrease significantly. Until passengers return, airports have few places to turn beyond the federal government.
Future Relief and Recovery Recommendations: 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 to meet existing requirements and to prepare for the return of passengers in a significantly different operating environment. Specifically, we seek:
As we have reported, the airlines have been mounting a full court press in effort to convince Congress to extend the Payroll Support Program before the end of the month. Airline CEOs and unions have been a constant presence in Washington recently. While extending the PSP is an important step we support to save airline jobs and protect service to small communities, Congress must also provide help for airports and our other industry partners, including concessionaires.
Please take action now to contact your Representative and ask them to ensure that the next coronavirus relief package from House leaders includes at least $10 billion for airports and an additional $3.5 billion to help concessionaires.
Talking Points
- It is my understanding that House leaders are contemplating a $2.4 trillion coronavirus relief package.
- On behalf of _______, I urge you to ensure that the package includes at least $10 billion to continue to help airports respond to the coronavirus. I also urge you to provide $3.5 billion to concessionaires, which have also been hit hard by the pandemic.
- We are grateful for the CARES Act, which provided an immediate lifeline to airports. But airports and concessionaires expect to face considerable challenges in the months and years ahead as the global pandemic continues.
- Passenger numbers are still down approximately 70 to 75 percent from the same time last year. With a significant drop in passengers, airport revenue continues to suffer. Meanwhile, airports are facing new operating demands and increasing strains on their outstanding debt.
- [Please explain how the coronavirus is impacting you're your airport - passenger levels, revenues, etc.]
- Given the significant decline in aviation activity and revenue, airports will need additional federal assistance to meet existing requirements and to prepare for the return of passengers in a significantly different operating environment.
- In addition to providing federal funds for airports and concessionaires, I also urge you to eliminate the local match requirement for Airport Improvement Projects funded with FY21 dollars. This step, which is consistent the CARES Act, would free scarce local resources for other necessary purposes, including operational expenses.
COVID-19 Impacts Are Severe for Airport Operators: America's airports - like the rest of the nation's aviation system - have been hit hard by the significant decline in travel caused by COVID-19. Passenger levels were down as much as 95 percent system-wide for an extended time and are still at only 25 to 30 percent of previous levels. Billions in revenue that airports expected to be generated by travelers has evaporated. Billions more in anticipated passenger facility charge (PFC) collections has also disappeared, depriving airports of a key source of revenue to support bond payments. Airports hold nearly $100 billion in collective debt, with some $7 billion in airport bond principal and interest payments due in 2020.
CARES Act Funding Provided a Critical Lifeline, But Additional Assistance is Required: 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. Unfortunately, the relief provided by CARES Act funding is only temporary given the depths of the crisis. The costs of maintaining facilities and meeting debt obligations, which total $500 million at one large hub airport alone in 2020, continue for airports even as airport revenue and PFC collections decrease significantly. Until passengers return, airports have few places to turn beyond the federal government.
Future Relief and Recovery Recommendations: 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 to meet existing requirements and to prepare for the return of passengers in a significantly different operating environment. Specifically, we seek:
- Commercial Service Airports: We concur with the ACI-NA assessment of $13 billion in continued, future needs for airports across the country in the face of significantly reduced revenues due to COVID-19. Airports would use these resources to fund operations, payroll obligations, debt service requirements, existing construction projects, and recovery efforts. We recommend allocating these resources based on enplanements and landed cargo weight consistent with existing AIP formulas with adjustments to eliminate a maximum cap and PFC turnback requirements while maintaining the flexibility provided to airports in the CARES Act to use additional resources for "any purpose for which airport revenues may lawfully be used."
- General Aviation Airports: General aviation airports, which are largely supported by aviation system activity such as fuel sales, have seen their revenues diminish significantly. While the CARES Act provided $100 million to GA airports, those resources were relatively modest considering that there are nearly 3,000 eligible GA facilities. We estimate that GA airports need an additional $1.5 billion to address current needs in the wake of the coronavirus crisis. These resources would help critical GA airports meet ongoing operational expenses, including payroll.
- Increased Federal Share for Airports for FY21 AIP Grants: Consistent with provisions in the CARES Act as it relates to FY20 Airport Improvement Program (AIP) grants, AAAE proposes to increase AIP funding so that the federal share for all AIP grants issued in FY21 is 100 percent. This would free scarce local resources for other necessary purposes, including operational expenses.
- Assistance to Airport Concessionaires: As representatives of airports and a broad group of airport concessionaires, Airports Council International - North America (ACI-NA); the American Association of Airport Executives (AAAE); the Airport Restaurant and Retail Association (ARRA); the Airport Minority Advisory Council (AMAC); the American Car Rental Association (ACRA); the International Association of Airport Duty Free Shops (IAADFS); and the National Parking Association (NPA) fully support at a minimum the $10 billion in proposed assistance for airports under active discussion as part of the ongoing negotiations on the next phase of coronavirus relief. Collectively, we also ask that Congress provide an additional $3.5 billion in federal assistance to allow airports to provide "minimum annual guarantees" (MAGs) and rent relief for airport concessionaires. We are confident that this can be done in a way that ensures that airport concessionaires receive critical relief without unduly burdening airports.
