U.S. airports estimate they need almost $100 billion for capital projects during the next five years and can only fund about half of that on their own, according to a study by a group representing commercial airport owners.
Airports are coping with a number of changes that have stretched existing facilities, including higher passenger and cargo activity, aging infrastructure, and consolidation in the airline industry that has increased the demand for hubs, the Airports Council International-North America said in a bi-annual study released Tuesday. The cost projections for 2017 through 2021 are 32 percent higher than the group’s five-year estimate in 2015.
The group’s report comes as President Donald Trump seeks to invest $1 trillion in U.S. infrastructure. Trump has called for a “national rebuilding’’ of roads, bridges, tunnels and airports, and has said he’ll be asking Congress to approve legislation that leverages both public and private capital. The president met with airline executives and airport managers at the White House on Feb. 9 and said U.S. airports are part of an “obsolete’’ transportation system.
“Airports stand ready to work with the Trump administration and Congress to address airport needs in the most cost-effective and sustainable way possible,’’ Kevin Burke, president and chief executive of the Airports Council, said in the report.
U.S. airports have an average of $10 billion available annually for capital work from existing funding sources, the council said. They currently receive about $3.5 billion a year in Airport Improvement Program grants from the Federal Aviation Administration for work including new runways and other construction. That money comes from taxes and fees levied on fuel and passengers. Airports also generate revenue by charging airlines and other businesses rent, and can raise funds by issuing bonds.
Commercial airports operated by a public agency can also opt to charge a separate fee of as much as $4.50 per passenger to fund FAA-approved projects, according to the agency’s website. Airports are asking Trump to raise this fee, known as the Passenger Facility Charge.
Airlines for America, the trade group representing most large carriers, has objected to any airport-charge increases, arguing that it will tamp down sales and that the need for new construction at airports isn’t as dire as the airports claim.
“The longer we delay, America’s airports will fall behind, and our infrastructure needs become more expensive to fix,’’ Burke said in the report.
©2017 Bloomberg L.P.