1). Today, those monies come from Airport  Improvement Program (AIP) grants. General aviation flights also contribute to the trust fund  through a tax on noncommercial jet fuel. Airports in the national airport  system may receive AIP entitlement grants based on the number of  passengers and amount of cargo carried and may also compete for AIP  discretionary grants. AIP grants can only be  used for eligible projects, generally those that enhance capacity, safety,  or environmental concerns, such as runway construction and  rehabilitation, airfield lighting, and airplane noise mitigation. In addition, according to the most recent FAA forecast, air traffic demand  is projected to increase 2.7 percent per year from 2014 through 2034. Similarly, airport-generated revenues are also tied to aviation activity and  the number of passengers who use airport-related services. Aviation Activity at Airports Has Slowed or Declined Since 2007

Since 2007, economic pressures—including record-high fuel prices and  the recession of 2007 through 2009—helped spark a wave of  consolidation across the airline industry. FAA attributed the decline to several factors,  including airport sponsors choosing to defer projects due to reductions in  aviation activity, having identified other funding sources for projects, and  projects’ having been completed. ACI-NA also estimated airports’ costs of planned development for the  fiscal years 2013–2017 period for projects eligible for federal funding as  well as those not eligible. The total estimated costs of planned  development for fiscal years 2013–2017 are $68.2 billion (2012 dollars) or  approximately $13.6 billion per year on average. First, while FAA’s estimates cover projects for every airport in  the national system, ACI-NA surveyed its member airports in the U.S. (117 of which  responded, consisting mostly of large, medium, and small hub airports) and then  extrapolates a total based on cost-per-boarding calculations for large, medium, and small  hub airports that did not respond. ACI-NA’s estimates for these categories of airports are drawn directly from FAA’s estimate. Federal Support for Airport Development Declined, While Alternative Revenue Sources at Airports Have Grown

		Federal Support for Airport Development Has Declined

Regarding AIP grants, annual appropriations decreased from about $3.5  billion for fiscal years 2007 through 2011 to about $3.4 billion for fiscal  years 2012 through 2014. Therefore, the extent to which the gap between airport funding  and planned airport development costs has changed since we last  reported on this in 2007 is unknown. As discussed above, for the 2013  through 2017 period, the total estimated annual costs for airports’ planned  development projects is about $13.1 billion, $8.5 billion of which is eligible  for AIP grants and PFCs. FAA also allows airports with  excess available land to use the land for certain types of commercial   Airport operators must  development, pending approval by the FAA.obtain FAA’s concurrence prior to leasing airport land or facilities to  private developers to help ensure, among other things, that the  developer’s plans will be compatible with airport operations and that the  airport receives fair market value for the use of its property.
Why GAO Did This Study

U.S. airports are important contributors to the U.S. economy, providing mobility for people and goods both domestically and internationally and often contributing to the economic success of the communities served. Since 2007 when GAO last reported on airport funding and its sufficiency to meet planned development of airport infrastructure, there have been significant changes in the aviation industry. During this time, federal support for airport development has declined. As deliberations begin in advance of FAA's reauthorization in 2015, Congress will consider the most appropriate type, level, and distribution of federal support for development of the national airport system.
This testimony discusses trends in (1) aviation activity at airports since 2007, (2) costs of airports' planned development, and (3) federal funding and airport revenues that may be available to finance development costs. This testimony is based on previous GAO reports on aviation from June 2007 through June 2014, updated through June 2014 with interviews with key FAA and trade association officials and FAA airport funding data from 2005-2013. GAO shared the information it used to prepare this statement with FAA and incorporated its comments as appropriate.

What GAO Found

Since 2007, economic pressures—including high fuel prices, the financial crisis, and the ensuing recession of 2007–2009—contributed to airline restructuring which has resulted in reductions in the number of commercial flights at airports, especially at medium- and smaller-sized airports. General aviation activity, which includes all forms of aviation except commercial and military, has also declined over the last decade. Because many sources of airport funding, including federal support and locally generated revenue, are tied to aviation activity, for many airports these trends mean less funding available for infrastructure development.
According to Federal Aviation Administration's (FAA) estimates, airports' total costs of planned infrastructure development eligible for federal support from FAA's Airport Improvement Program (AIP) grants are about $42.5 billion for the 2013 through 2017 period, or about $8.5 billion per year on average which was down 18 percent from $52.2 billion for the 2011 through 2015 period. FAA attributed the decline to airports' choosing to defer projects due to reductions in aviation activity or having identified other funding sources, among other factors. Airports in the national airport system receive AIP entitlement grants for eligible projects, generally those that enhance capacity, safety, or environmental conditions. The U.S. airport association, Airports Council International—North America, estimated costs of other planned development not eligible for federal support, such as parking structures, totaled $4.6 billion per year for the 2013 through 2017 period. Therefore, the total costs of planned development for the most current period are estimated to be approximately $13.1 billion per year.