CARES Act Funds Heading to Airports

The Federal Aviation Administration now disbursing approximately $10 billion to commercial and general aviation airports; funds appropriated as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security or CARES Act.

[Above photo by Richmond International Airport.]

The agency said in a statement on April 14 that this funding will “support continuing operations and replace lost revenue” resulting from the sharp decline in passenger traffic and other airport business due to the COVID-19 public health emergency.

The funds are available for airport capital expenditures, airport operating expenses including payroll and utilities, and airport debt payments, it added.

The FAA also encourages airport sponsors to spend the funds immediately to help minimize any adverse impact from the current public health emergency, as the CARES Act funds increase the federal share to 100 percent for grants awarded under the fiscal year 2020 appropriations for Airport Improvement Program and Supplemental Discretionary grants.

That legislation also provides new funds distributed by various formulas for all airports that are part of the national airport system – including all commercial service airports, all reliever airports and some public-owned general aviation airports.

However, the Aircraft Owners and Pilots Association recently noted there could be a significant hitch in the CARES Act that could lead to insolvency of the Airport and Airway Trust Fund or AATF.

Photo by the Arizona DOT

In an April 9 letter, AOPA and 18 other organizations representing a wide array of aviation interests – including the American Association of State Highway and Transportation Officials – noted that at the beginning of fiscal year 2020, the AATF was financially healthy with a cash balance of approximately $17.9 billion, with about $6 billion not yet obligated.

Yet Under the CARES Act, according to preliminary and unofficial estimates by the FAA, the cash balance will fall to $7.8 billion while the uncommitted balance will be negative $3.5 billion by the end of fiscal year 2020. And unless Congress takes action to address the finances of the AATF, the fund may run out of cash in 2021.

“The AATF funds more than 99 percent of the FAA’s fiscal year 2020 budget, supports the FAA’s operation of the nation’s air traffic control system, and provides all funding for the Airport Improvement Program to include important safety construction projects at our nation’s airports,” AOPA noted in a statement; a trust fund supported almost entirely by tax revenues from users of and operators in the aviation system, including general aviation.

“However, significantly reduced demand and the tax holiday on passenger tickets, cargo, and fuel under the CARES Act will put the AATF in danger of insolvency,” the group noted.

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