U.S. airports will need $71.3 billion of capital through 2017, a funding goal they will not be able to meet unless the passenger facilities charge cap is lifted and the tax-exempt status of municipal bonds is protected, an airport group said Tuesday.
Airports Council International-North America's 2013 Capital Needs Survey identified Texas, Florida, and California as the states with the most capital-needy airports over the next five years, requiring $8.3 billion, $7 billion, and $6.6 billion, respectively. Dallas-Fort Worth International Airport is the single neediest airport by ACI-NA's estimate, with more than $1.5 billion of capital requirements.
Other airports that need capital include Philadelphia International Airport, Orlando International Airport, Chicago O'Hare International Airport, Fort Lauderdale-Hollywood International Airport, Los Angeles International Airport, New York John F. Kennedy International Airport and Salt Lake City International Airport, ACI-NA data showed.
Airport renovations and expansions are funded by the federal airport improvement program, or AIP, as well as the per-passenger passenger facilities charge, or PFC.
PFCs have been federally capped at $4.50 since 2000, despite airport lobbying to raise or eliminate the cap in order to offset inflation.
"This is a federal limit on a local revenue stream," state ACI-NA President Greg Principato, who added that airports might soon have to cut back on debt issuance and find new revenue streams to back bonds. The under-funding ranges from about 35% to about 19%, depending on the size of the airport.
"They're not going to be able to just wash their hands of it," Principato said, meaning airports will need to make improvements somehow.
Deborah McElroy, ACI-NA executive vice president for policy and external affairs, said the continued lack of inflation adjustment for PFCs will restrict the ability of airports to back new debt.
"A number of airports are very concerned," she said.
Principato also said airports need the tax-exempt status of munis to be protected, pointing to a 150 basis point gap between comparable tax-exempt and taxable bonds.
"It's pretty significant," he said.