Details:

Corporate Creators:
United States. General Accounting Office. Resources, Community, and Economic Development Division
Contributors:
Aiken, R. Jerry ; Aussendorf, Paul ; Bendekgey, Beverly Ann ; Cherlow, Jay R. ; Goldfarb, Lynne L. ; ... More +
Aiken, R. Jerry ; Aussendorf, Paul ; Bendekgey, Beverly Ann ; Cherlow, Jay R. ; Goldfarb, Lynne L. ; Hooper, David K. ; Kile, Joseph D. ; Landeryou, Kirsten ; Moessbauer, Sara Ann ; Stenerson, Stanley G. ; Williamson, Randall B. Less -
Subject/TRT Terms:
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Airport Development Airport Financing Airport Planning Airports Air Transportation Facilities Fees Finance Government Funding Grant Aid Landing Fees Transportation Planning Transportation System Management
Publication/ Report Number:
GAO/RCED-98-71
Resource Type:
Research Paper
Geographical Coverage:
United States
Corporate Publisher:
United States. General Accounting Office. Resources, Community, and Economic Development Division
Abstract:
More than 3,300 U.S. airports, ranging from large passenger airports like Chicago O’Hare to small general aviation airports, are part of the national airport system and therefore are eligible for federal assistance. To ensure their continued safe and efficient operations, these airports plan a wide range of capital development projects, including new runways, passenger terminals, navigational aids, and roadway access. Within the past year, several studies, including one of ours, have examined airports’ capital development needs.1 However, assessing airports’ capacity to finance their future development has been constrained by incomplete financial information about airports. To help clarify this issue, you asked us to answer the following questions: How much are airports of various sizes spending on capital development and where is the money coming from? If current funding levels continue, will they be sufficient to meet capital development planned for the 5-year period from 1997 through 2001? If a difference exists between current funding and planned development, what is the potential effect of various proposals to increase airport funding? To overcome past limitations in assessing the extent and variance of airports’ financial capacity, we developed an extensive database of airport funding information linked to each airport and its level of activity. These data and our analytical methodology are discussed in appendix III. Building the data from the ground up allowed us to ensure more accurate totals and, in particular, to assess the varying capabilities of airports on the basis of their size. It also enabled us to better examine the possible effects of various proposals to increase airport funding. Results in Brief In 1996, the 3,304 airports that make up the national airport system obtained about $7 billion for capital development. More than 90 percent of this funding came from three sources: airport and special facility bonds ($4.1 billion), funding made available from the Airport and Airway Trust Fund ($1.4 billion), and passenger facility charges paid on each airline ticket ($1.1 billion). Capital funding (adjusted for inflation) more than doubled from 1982 through 1992 and has since declined. The amount and source of funding varies with the size of airports. The nation’s 71 largest airports, which handled almost 90 percent of the passenger traffic in 1996, accounted for 79 percent of all funding in 1996, while the 3,233 other smaller commercial and general aviation airports that make up the national system accounted for the other 21 percent, or $1.5 billion.2 However, airports’ reliance on federal grants is inversely related to their size. For example, federal grants contributed a little over 10 percent of the funding for the nation’s 71 largest airports but accounted for 50 percent of the funding for the other 3,233 national system airports. Airports’ 1996 capital funding of about $7 billion is less than the $10 billion per year that airports anticipate will be needed to fund the development planned for 1997 through 2001. While this difference is not an absolute predictor of future funding shortfalls—both funding and planned development may change in the future—it does provide a useful indication of where funding differences may be the greatest. The difference between past funding and planned development is especially acute for smaller commercial and general aviation airports, whose 1996 funding was a little over half of the estimated costs of their planned development. The picture is somewhat brighter if the categories of planned development are narrowed to just those the Federal Aviation Administration gives highest priority—that is, safety, security, and noise-mitigation projects and the maintenance of existing airfields. With the exception of the small commercial airports, federal grants in 1996 matched or exceeded the planned development for such projects. Several proposals to increase funding for airports have emerged in recent years. These include increasing the size of the federal grant program, raising the ceiling on passenger facility charges, and leveraging existing funding sources. Each proposal varies in its magnitude and in its effect on airports and their users. For example, increasing the size of the federal grant program would mostly help small airports, while raising passenger facility charges would mostly help larger airports. We believe that the Federal Aviation Administration’s current pilot programs to use grants in more innovative ways and to privatize airports are likely to yield only marginal benefits because of limited participation by airports.
Format:
PDF
Collection(s):
US Transportation Collection
Main Document Checksum:
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urn:sha256:347a39cf318e97cd5051cadce6d472da356908d2c170ccfbf9fae84c9a9b52d5
Download URL:
https://rosap.ntl.bts.gov/view/dot/56129/dot_56129_DS1.pdf
File Type:

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