Airport grants provide short-term relief
Hundreds of airports were notified Tuesday by the Federal Aviation Administration of their share of the $10 billion in emergency federal grants that can be used for debt service and operating expenses such as payroll.
The FAA announcement came several hours before the Treasury Department said it has reached an agreement with most of the major passenger air carriers to provide $25 billion in payroll support under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
Moody’s Investors Service said Wednesday the airport grants represent between 20% and 115% of pre-outbreak revenue at the airports it rates, with the median at 31%.
“Though the majority of rated airports had ample liquidity to manage through the downturn, the additional cash on hand will allow airports to extend greater relief to airlines and concessionaires while their business is impacted and support those users operating after the worst of the closures are over,” said Earl Heffintrayer, Moody’s vice president and senior analyst.
S&P Global said at the time that $10 billion received final congressional approval last month that the money will “alleviate immediate liquidity pressures, as well as assist with near-term operational funding requirements including debt service.”
However, S&P also said that “long-term credit implications across all sectors have yet to unfold, and we expect greater visibility on the broader impacts on issuers' financial and business profiles in the coming months.”
Kevin Burke, president and CEO of Airports Council International – North America, said in a press statement the grants “will help airports offset some of the financial damage from the abrupt, unexpected drop in air travel that resulted from necessary precautions to limit the spread of COVID-19.”
Top recipients include Hartsfield-Jackson Atlanta International Airport with $338.5 million, Los Angeles International Airport at $323.6 million, Dallas-Fort Worth in Texas at $299.2 million and Chicago O’Hare at $294.4 million.
Other major grants include San Francisco International with $254.8 million, McCarran International in Las Vegas at $195.5 million, Logan International in Boston with $141.3 million, Orlando International at $170.7 million, George Bush Intercontinental in Houston at $149.2 million, Fort Lauderdale/Hollywood International at $134.9 million and Minneapolis-St Paul International at $125.2 million.
In the New York metropolitan area, Newark Liberty International in New Jersey will get $147.5 million, John F. Kennedy International Airport will get $193.4 million and LaGuardia will receive $102.9 million.
The FAA said that its normal requirement for local matching funds has been suspended for these grants.
The distribution of funds covers all commercial service airports, all reliever airports and some publicly owned general aviation airports, the FAA said.