Biden likely to boost airport infrastructure funding

U.S. Airports have received billions in federal funding for safety and infrastructure improvements during the past four years under U.S. Secretary of Transportation Elaine Chao and the Trump administration, and airport property developers are optimistic that infrastructure funding will be even more accessible under a Biden administration. [caption id="attachment_93311" align="alignright" width="450"] Aeroterm completed development of a new on-airport cargo facility at Sacramento International Airport (SMF) in 2020. Photo/Realterm[/caption] “President-elect Biden’s infrastructure plan proposes doubling funding for airport infrastructure through FAA AIP [Airport Investment Partnership] grants, as well as a new competitive grant program for major airport renovation initiatives likely focused on upgrading passenger terminals,” said Managing Director David Rose, of the developer Aeroterm. On Nov. 16, Biden also reaffirmed his support for a $3.4 trillion bill originally proposed by House Democrats in May. Biden has also signaled a desire for another large COVID-19 relief package. “With the administration change, I think we will see another stimulus package come out very, very quickly,” said Chris Spann, national director of aviation at developer Burns & McDonnell. Spann does not expect airports to see as much money “this go around” as with the first major COVID-19 stimulus package, the $2.5 trillion CARES Act. However, the new package’s likely focus on airlines is seen as a welcome lifeline by the aviation industry as a whole. Aeroterm’s Rose touted Biden’s recognition of the improvements needed at New York airports during his vice presidential tenure as a catalyst for passenger terminal initiatives there. “The Biden administration is likely to take a proactive approach toward government assistance for the redevelopment of passenger terminals and other airport infrastructure efforts across the country in anticipation of a passenger volume recovery in the coming years,” said Rose. Public airport-improvement funding originates from taxes on ticket sales that are pooled federally and redistributed to airports based on their needs, with planning around infrastructure improvement, Spann explained. The pooling of funds allows for grant distribution to smaller airports that have less funding generated from ticket taxes. With the last round of stimulus from the CARES Act, airport funding launched a number of “shovel ready projects,” Spann said. These infrastructure projects “were in the pipeline,” and “nearly ready to go,” and had been greenlighted or started earlier because of the stimulus funding boost. With the redistributed ticket tax funds fueling the bulk of most airport infrastructure projects, the airports — depending on their size — tend to cover 10% to 25% of the overall cost. The stimulus funds enabled some airports to divert funds budgeted for infrastructure projects to cover maintenance and other operational projects while, in parallel, “a lot more projects moved forward,” Spann said. The speed of private infrastructure development has also progressed during the pandemic. With far fewer passenger flights at many airports, there is “a whole lot more opportunity to get some things built without interfering with the operation of the airport on a day to day basis,” said Spann. Most of the major e-commerce and express companies in the United States, including Amazon, FedEx and UPS, have seized this opportunity to accelerate hub improvement or expansion projects, he added. The impact of the COVID-19 pandemic on passenger aviation is also directly affecting how funding is likely to be allocated for infrastructure investment, Rose said. “While Aeroterm welcomes additional infrastructure funding being made available to support air cargo and related support-facility redevelopment, we anticipate the main investment focus will be to make the passenger perception of flying safe,” said Rose. “Supporting a broad, societal return to air travel means more aircraft flying, thereby increasing much needed belly-cargo capacity.” Other initiatives likely under a Biden administration could include a focus on sustainability and climate-friendly design aimed at reducing the industry’s carbon footprint, said Rose. “We expect government mandates to phase in new technologies to improve air quality, including competitive grants to be awarded based on sustainability and low-emission initiatives,” he said. Apart from federal funding, there is more airport investment ahead on the part of local governments and private entities. At Miami International Airport (MIA), billions of dollars in infrastructure improvements were approved before the pandemic by Miami-Dade County. Jimmy Nares, section chief of aviation marketing for the Miami-Dade Aviation Department at Miami International Airport, noted that with local governmental support, MIA is less dependent on federal grants for infrastructure improvement funds. In terms of private investment, U.S.-based Oaktree Capital Management and Netherlands-based airport operator Royal Schiphol Group announced on Nov. 11 a partnership for airport investment and management opportunities, with a focus on U.S. airports. Such a venture could also utilize public funding through the FAA’s AIP Program, but Oaktree has a large investment portfolio itself, with $140 billion in assets under management as of Sept. 30. Aviation’s recovery is going to be a long, multiyear slog before it returns to “what the industry calls ‘normal,’” said Spann. Given the promising news regarding late-stage vaccine trials, “ we're starting to see a little bit more light at the end of the tunnel.”

Biden likely to boost airport infrastructure funding

CAGS: Turkish Cargo leverages dual hub in COVID-19 response

Boeing WACF: E-commerce lifts North American cargo growth prospects

Related Posts

Western Sydney International preps for launch of 737-800BCF, A321P2F ops this month

SFO targets Asia-North America growth with new cargo terminal

Lufthansa Cargo completes 1st phase of FRA hub upgrade

Boeing WACF: E-commerce lifts North American cargo growth prospects

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password