Regulatory Alert: FAA Updates Guidance for Airports on COVID-19 Restrictions and Accommodations

May 29, 2020

This evening the Federal Aviation Administration (FAA) released an updated informational document that provides airport sponsors with guidance on the use of airport revenue and airport space for public health activities. FAA clarified that the agency considers costs associated with certain public health activities to be legitimate for purposes of airport grant assurances, including the testing and health screening of airport employees; enhanced cleaning of the terminal and other areas of airport property; and the purchase of incidentals and supplies to accomplish these purposes. FAA continues to maintain that the use of airport employees for public health screenings is generally not considered a proper use of airport revenue.

FAA's updated guidance, "Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations," can be viewed here. As previously reported, FAA originally issued this guidance on March 28 and subsequently updated the document on April 4. Highlights from today's update are included below.

Use of Airport Revenue for Public Health Activities. As members are aware, federally obligated airports may only use revenue for the capital or operating costs of the airport. In today's update, FAA clarified that costs associated with the following types of public health activities may be considered legitimate for purposes of airport grant assurances: (1) testing and health screening of airport employees; (2) enhanced cleaning of the terminal and other areas of airport property to minimize transmission of COVID-19; and (3) purchasing incidentals and supplies to carry out these functions, such as screening and testing equipment, cloth face covers, and cleaning and disinfection products. FAA has urged airports to account for and document allowable costs that airports incur due to the COVID-19 public health emergency.

By contrast, FAA continues to maintain that the use of airport employees for public health screenings is generally not considered a proper use of airport revenue. This is consistent with previously issued guidance.

Use of Airport Space for Public Health Activities. FAA has previously provided that airports are permitted to allocate terminal or office space for testing and health screening activities and the related storage of medical equipment and supplies. In the update released this evening, FAA clarified that airports have the discretion "to allow tenants to have additional space, beyond what their leases include, for testing and health screening and for storage of medical equipment and supplies." The agency also noted that these accommodations may be for no cost as long as they are temporary, necessitated by the ongoing emergency, and offered in a manner that is not unjustly discriminatory.

Reporting Rent Deferral Amounts to FAA. FAA's updated information also included guidance for airport sponsors on reporting deferred rent amounts to FAA. The agency advised airports that the "deferred rent amount should be reported in the fiscal year when the rent would have been due but for the deferral." If the rent payment is only deferred, not abated, the deferred amount should be reported as an unpaid invoice (accounts receivables) in order for it to be reflected in the amount of revenue reported to FAA on the Form 127.

If you have any questions or other feedback, please contact Justin Barkowski at justin.barkowski@aaae.org.