American airports have asked the U.S. Congress for $10 billion in immediate aid to help offset the massive drop in travel levels caused by the COVID-19 pandemic.
The proposal being discussed would see funds flow through the existing FAA Airport Improvement Program (AIP). Eligible spending, normally limited to infrastructure projects, would be expanded to include operational expenses and debt payments to help airports weather the temporary fall in revenues caused by fewer passengers.
The plan was presented to lawmakers by the American Association of Airport Executives (AAAE) and the Airport Council International-North America (ACI-NA), working jointly under the Airports United moniker.
Writing to Congressional leaders on Mar. 18, the groups noted that airports have nearly $100 billion in collective debt, with approximately $7 billion in bond principal and interest payments due this year.
“No U.S. commercial service airport has ever defaulted on a bond payment. Allowing a default now would be devastating for any affected airport, and the entire industry, as future borrowing costs would increase significantly,” the groups wrote.
ACI-NA estimates that U.S. airports will lose $8.7 billion in 2020, a number that a spokeswoman said is “likely to grow as the fundamentals continue to erode.” The group forecasts passenger traffic at U.S. commercial airports falling by 68% in the March to June period, with total enplanements falling by 222 million year-over-year.
“The swift drop in air travel has forced airports to get creative by cutting budgets and lowering their operating costs as quickly as possible, all while stepping up their efforts to clean facilities and ensure the health and safety of passengers and employees alike,” said ACI-NA president and CEO Kevin Burke. “But with financial losses topping at least $8.7 billion and counting, there are limits to that belt-tightening”…