Who Pays for Airport Development?

Airport Financing: Funding Sources for Airport Development

U.S. General Accounting Office Report RCED-98-71, March 12, 1998.

To ensure the safe and continuing operation of the national airport system, airports across the country -- from large passenger facilities like Chicago O'Hare to small general aviation airports--plan a wide range of capital development projects, including new runways, passenger terminals, navigational aids, and roadway access. In 1996, the 3,304 airports in this system obtained about $7 billion for capital development, more than 90 percent of which came from airport and special facility bonds, funding made available from the Airport and Airway Trust Fund, and passenger facility charges paid on each airline ticket.

However, this amount falls short of the $10 billion that airports anticipate that they will need annually for development planned through 2001. Several proposals have been made in recent years to boost funding for airports, including increasing the size of the federal grant program, raising the ceiling on passenger facility charges, and leveraging existing funding sources. GAO believes that the Federal Aviation Administration's 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. However, using federal airport grants to capitalize state revolving funds might prove more successful in expanding airport investment. The GAO summarized this report in testimony before Congress (see "Airport Financing: Comparing Funding Sources With Planned Development," below).

Airport Financing: Comparing Funding Sources With Planned Development

Testimony by Gerald L. Dillingham, Associate Director for Transportation Studies, U.S. General Accounting Office, before the Aviation Subcommittee, House Committee on Transportation and Infrastructure, summarizing the GAO report "Airport Financing: Funding Sources for Airport Development" (see above), Report T-RCED-98-129, March 19, 1998.