Dive Brief:

• The U.S. Department of Transportation announced on Thursday that the Federal Aviation Administration (FAA) will award $230 million in Airport Improvement Grants to 104 U.S. airports, according to an FAA press release.  
• The money will go toward upgrades and repairs to runways, lighting, markings, signage and other infrastructure projects. The FAA said the grants, which are determined each year according to passenger volume, will generate thousands of jobs.
• The agency will disburse funds in time for construction to be completed or underway before the winter weather settles in.

Dive Insight:

This grant announcement comes on the heels of a June AIP outlay in the amount of $527.8 million for improvements at 574 airports across the U.S. The June announcement also indicated that grants would also go to 38 airports where capital needs had surpassed current funding allocations. One of the largest disbursements — $60 million — will help finance the sixth and final $649 million runway at Chicago's O'Hare International Airport.

According to an Airports Council International–North America (AIC) report, it would take approximately $100 billion over five years to fund the country's airport repairs and improvements. However, the FAA's current AIP budget is only $3 billion annually, and it doesn't include money for the big terminal replacement projects that have become popular in the industry during the last two or three years.

At the end of last month, Congress got the ball rolling on multiyear bills that could result in a modest increase in AIP funding when the House and Senate introduced legislation specifying phased-in increases to the FAA's construction coffers. The four-year Senate bill would increase the agency's budget by 8%, and the six-year House bill would increase funding by 6%.

Neither bill addresses the hot-button issue of the passenger facility charge, which has been capped at $4.50 per passenger since 2000. The AIC and other airport advocates are in favor of eliminating the cap, as it is a main source of airport AIP revenue.

Some airport officials have also chosen public-private partnerships (P3) to finance their major renovations and additions. Such was the case for the Port Authority of New York and New Jersey, which opted for a P3 delivery for construction of the new $4 billion terminal at LaGuardia Airport, with LaGuardia Gateway Partners financing, designing and building the facility, as well as maintaining and operating it when complete.