Airport Operators Worry That Furloughs Deal Will Reduce Capital Spending

Posted May 6, 2013 at 1:40pm

Airport operators were relieved that Congress enacted legislation before the recess rolling back air-traffic-controller furloughs — though they were less than pleased about where lawmakers found the money to offset the cuts.

The law allows the Transportation Department to transfer as much as $253 million from other accounts —including Airport Improvement Program grants — to keep the towers fully staffed. That ended delays and congestion at major airports but set a precedent of tapping capital improvement funds supported by user fees to pay for operations.

President Barack Obama — who reluctantly signed the bill into law (PL 113-9) — said the deal amounts to “using our seedcorn” and threatens to make American airports less competitive. Airport operators say it had better be a one-time fix.

“Airports agree that passenger delays and inconvenience cannot continue,” said David N. Edwards Jr., chairman of the Airports Council International – North America. “But raiding capital improvement funding to pay for Federal Aviation Administration operations is unprecedented and does not take into account the need to make critical safety, security and capacity improvements.”

Airport Improvement Grants were created by the 1982 Federal Aviation Administration authorization (PL 97-248) to fund runways, taxiways and other airport infrastructure critical for passenger and cargo operations. The money is raised by user fees, including taxes on airline tickets and aviation fuel.

While there is still more than $3 billion available annually for Airport Improvement Program grants, some are worried that further diversions from the fund to operations accounts will further erode the ability of American airports to compete with modern jetports around the world.

Even before the furloughs stemming from across-the-board budget cuts mandated by the 2011 deficit reduction agreement (PL 112-25) threatened to snarl aviation traffic through the busy summer travel period, U.S. airports were struggling to keep up with European, Asian and Middle Eastern nations that were sinking billions of dollars into expanding and improving their own facilities.

Obama noted at his White House news conference last week that not a single U.S. airport cracked the top 25 in the annual ranking of world airports based on traveler surveys conducted by the British aviation consultants Skytrax.

Cincinnati/Northern Kentucky International Airport fared best at No. 30, and just three other American facilities — Denver, San Francisco and Atlanta — made the top 50. The top 10 airports were all in Asia or Europe, with Singapore and Seoul claiming the No. 1 and No. 2 spots.

Those surveys focused on a variety of criteria in evaluating airports — availability and quality of smoking lounges, for instance, was one criteria — but airport operators worry that cutting Airport Improvement grants could hurt competitiveness at a basic service level.

An FAA report in February showed that a wide variety of projects were supported by the program in 2012. Baton Rouge Metropolitan Airport in Louisiana, for example, used $5.77 million in Airport Improvement Program funds to rebuild a runway. Dallas/Fort Worth International, the major American Airlines hub in Texas, snagged $9 million to rebuild a runway.

Smaller general aviation facilities also benefited. The municipal air strip in Truth or Consequences, N.M., spent $388,982 in Airport Improvement Program funds last year to rebuild a taxiway and was able to add new lighting, too.

Supporters of tapping the Airport Improvement Program funds to reverse the furloughs contended that some of the funding has gone unspent. While that is true, airport operators worry that using the dedicated funding to pay for operations will end up forcing more costs onto consumers.

For big passenger hubs, that could mean increased passenger facility charges in the future, a move the White House has proposed in recent years to help trim the budget. At smaller general aviation facilities, aircraft operators could end up paying higher fees in the future to offset greater shares of capital costs.

Ultimately, advocates worry the deal might start a trend of paring down federal investment in air facilities of all sizes.

Last week, the airports council group sent FAA Administrator Michael P. Huerta a letter warning his agency to be extremely cautious in how it spends the reallocated funds. Meanwhile, the group will urge lawmakers to fully restore Airport Improvement Program funding levels in fiscal 2014.

“Given that airports will be sacrificing needed capital improvements to keep the National Airspace System running this summer, it is critical for FAA to ensure every dollar of the $253 million is used directly on these critical operational priorities, and not on other non-operational expenses,” the airports group wrote.