GAO releases airport finance report

The U.S. Governmental Accountability Office (GAO) released a report Wednesday that details funding sources and information on capital development for airports.

The report found that airports on the national system were able to average $10 billion on an annual basis between 2009 and 2013, and that large airports obtained over half of their capital development funding from net income generated by the hubs. Smaller airports were found to be more reliant on grants from the Airport Improvement Program (AIP).

The GAO also found that planned capital development is likely to exceed funding levels reported in the past. For calculation purposes, past funding was adjusted to inflation so that it matches 2013 dollars. With this in mind, capital development funding amounted to $10.3 billion and future costs are estimated to be at $13 billion on an annual basis.

Enhancements would include renovations, reconstructions, and design updates that align with Federal Aviation Agency standards and enhancements to airfield capacity. They state that airports have a number of options in order to meet this expected shortfall, including increasing net income or borrowing funds.

President Barack Obama's recent budget proposal reduces the amount of funding that would decrease to approximately $2.9 billion in terms of AIP financing, his proposal does include potential for increased passenger facility charges (PFC) maximums. PFCs are used by many airports to service debts.