Regulatory Alert: FAA Issues Guidance for Airports on COVID-19 Restrictions and Accommodations
March 28, 2020
Today the Federal Aviation Administration (FAA) issued an informational document that provides airport sponsors with guidance on responding to requests from tenants to defer or waive rents, landing fees, or other payments owed. FAA indicated that airports have flexibility to defer the collection of rents and/or fees under certain circumstances, but airports do not generally have the authority to waive landing fees and terminal rents. FAA also provides guidance for navigating many other unique scenarios that airports are confronting due to the growing pandemic, such as closure of terminals and retail activities, restricting airport activity, and screening or quarantining passengers from other locations within the United States.
As airports continue to respond to the coronavirus outbreak, AAAE staff has been tracking on many of the issues addressed by FAA. AAAE welcomes the agency's informational documents, as they should provide assistance for airports and state and local officials who are trying to navigate these important issues.
FAA's first document, "Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations," can be viewed here. FAA's second document, "Considerations for State, Local, and Territorial COVID-19 Restrictions That Impact Air Transportation," can be viewed here.
Deferral or Waiver of Rents and Fees. AAAE has received many questions regarding how airport sponsors may respond to requests from tenants to defer or waive rents, landing fees, or other payments owed. FAA addressed this question for federally obligated airports that are subject to grant assurances under the Airport Improvement Program (AIP):
"Airports have flexibility to defer the collection of rents and/or fees if the circumstances warrant. The terms and interest rates applied should be reasonable and applied fairly to similarly situated businesses. Deferral of rental payments and or fees, if adequately justified, is not likely to violate FAA's grant assurances. A primary goal of the statutory sustainability principle is to keep the airport solvent to ensure that the airport can remain open and operate safely. If a deferral exceeds an annual reporting period, interest should be charged based on Treasury note interest rates and reported on FAA Form 127 as deferred revenue until collected. In general, there is no authority that would allow an airport to waive landing fees and terminal rents; any such request should be discussed with FAA's Office of Airports."
Other Highlights. FAA's informational documents address a number of other unique issues that have arisen for airport sponsors during their response to the pandemic. Highlights from the many topics discussed include:
Today the Federal Aviation Administration (FAA) issued an informational document that provides airport sponsors with guidance on responding to requests from tenants to defer or waive rents, landing fees, or other payments owed. FAA indicated that airports have flexibility to defer the collection of rents and/or fees under certain circumstances, but airports do not generally have the authority to waive landing fees and terminal rents. FAA also provides guidance for navigating many other unique scenarios that airports are confronting due to the growing pandemic, such as closure of terminals and retail activities, restricting airport activity, and screening or quarantining passengers from other locations within the United States.
As airports continue to respond to the coronavirus outbreak, AAAE staff has been tracking on many of the issues addressed by FAA. AAAE welcomes the agency's informational documents, as they should provide assistance for airports and state and local officials who are trying to navigate these important issues.
FAA's first document, "Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations," can be viewed here. FAA's second document, "Considerations for State, Local, and Territorial COVID-19 Restrictions That Impact Air Transportation," can be viewed here.
Deferral or Waiver of Rents and Fees. AAAE has received many questions regarding how airport sponsors may respond to requests from tenants to defer or waive rents, landing fees, or other payments owed. FAA addressed this question for federally obligated airports that are subject to grant assurances under the Airport Improvement Program (AIP):
"Airports have flexibility to defer the collection of rents and/or fees if the circumstances warrant. The terms and interest rates applied should be reasonable and applied fairly to similarly situated businesses. Deferral of rental payments and or fees, if adequately justified, is not likely to violate FAA's grant assurances. A primary goal of the statutory sustainability principle is to keep the airport solvent to ensure that the airport can remain open and operate safely. If a deferral exceeds an annual reporting period, interest should be charged based on Treasury note interest rates and reported on FAA Form 127 as deferred revenue until collected. In general, there is no authority that would allow an airport to waive landing fees and terminal rents; any such request should be discussed with FAA's Office of Airports."
Other Highlights. FAA's informational documents address a number of other unique issues that have arisen for airport sponsors during their response to the pandemic. Highlights from the many topics discussed include:
- Screening or Quarantining Passengers. FAA indicated that in most cases, it is acceptable for state, local, or territorial public health officials to screen or quarantine passengers, so long as passengers are not being categorically refused access to air transportation. FAA emphasized that coordination with stakeholders is important and efforts should be made to minimize queueing or the formation of large groups of passengers in the terminal. FAA also issued a separate document outlining considerations for state, local and territorial officials who are planning to implement such restrictions.
- Closing Restaurants or Retail Activities in Terminals. FAA advised that the closing of restaurants, retail stores, or other non-aeronautical functions in a terminal is not likely to violate FAA grant assurances, particularly if driven by public health measures and the restrictions apply to all business entities within the jurisdiction.
- Closing Gates or Terminal Sections. Closing of gates or sections of terminals is likely to be acceptable if (a) the closure is executed in response to reduced passenger volumes and operations; (b) is not discriminatory; (c) does not provide an unfair competitive advantage to one operator; and (d) is coordinated with airlines, the Transportation Security Administration (TSA), and other entities.
- Closing Airports. FAA reiterated the need for FAA to approve in advance any proposed closing of airport access, i.e., passenger and aircraft access.
If you have any questions regarding either FAA document, please contact your local FAA Airport District Office (ADO) to determine how this may apply to your specific airport.
If you have any other questions or feedback, please contact Justin Barkowski at justin.barkowski@aaae.org.
