Hit hard by coronavirus, airports look to the future

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Airport executives are looking hopefully for future federal investment as they suffer serious revenue declines due to the coronavirus pandemic.

During a United for Infrastructure webinar Wednesday, Rep. Richard Larsen, D-Wash., member of the House Transportation and Infrastructure Committee and chair of its aviation subcommittee, said the House’s passage of its Moving Forward Act in July is part of an investment in infrastructure-based recovery that will be needed as the COVID-19 pandemic eases.

“That fact is, is that this is an important piece of legislation,” Larsen said. “I believe we need to have an infrastructure-based recovery in place. We need to have that ready for when the number of positive (COVID-19) cases comes down.”

Rep. Richard Larsen, D- Wash., member of the House Transportation and Infrastructure Committee and chair of its aviation subcommittee said an infrastructure based recovery is needed during a United for Infrastructure webinar on Wednesday.

When asked if he knew what the Senate may have in store and if they may move their own infrastructure package, Larsen said it wasn’t his place to guess. The Senate Environment and Public Works Committee has a smaller surface transportation reauthorization infrastructure bill.

“If we don’t get something done this year, we fully expect that we will be back at it because we believe in infrastructure investment-based recovery,” Larsen said.

In July, House Democrats passed their $1.5 trillion infrastructure bill that would give $37.5 billion for airports through the Federal Aviation Administration’s Airport Improvement Program and additional supplemental funds. The House bill includes muni bond provisions such as the reinstatement of tax-exempt advance refunding, an increase in the bank-qualified bond cap and a new kind of direct-pay bond.

Airports have struggled during the pandemic. In an Airlines for America study updated on Aug. 18, domestic air travel was down 68% and international travel down by 88%.

At the start of the pandemic, the Cincinnati Northern Kentucky International Airport had a drop of about 95% in normal operations and they are now wavering closer to 70%, its CEO, Candace McGraw, said during the webinar.

CVG has a significant cargo operation that picked up during the pandemic, which has helped the airport through, McGraw said.

The $10 billion given to airports through the CARES Act helped airports like Cincinatti, which was given $43 million. McGraw said CVG is doing well on the airfield side, but added that its terminals need help.

“It’s at the terminals where we have a very aging infrastructure,” McGraw said.

So far, CVG has been able to keep up with day to day maintenance, but still has its eyes set on future investments.

“We don’t want to lose track of the future and planning for the future as we come out of this pandemic and over the next few years,” McGraw said, “Traffic will come back and we’ll rebuild. During the pandemic, we finalized our 2015 master plan study on what we’ll do and the infrastructure we’ll need to do over the next 25-30 years.”

McGraw said some projects have had to be delayed or deferred. The airport isare building a rental car facility and McGraw said CVG is working with its contractor on how to keep it going.

In San Luis Obispo County, California, Director of Airports Kevin Bumen said it has been able to stay on track with future capital projects.

Bumen said San Luis Obispo County Regional Airport is planning for projects after the pandemic, whether in the short or long term.

The county completed a new terminal two years ago, but the airport is still carrying debt from it, Bumen said. The new $39.5 million terminal was funded through FAA grants, passenger facility charges and airport revenues.

Increasing the PFC would help retire that debt sooner, he said. The PFC is a user charge determined by the local airport authority or whichever government operates the airport. Airports pay for operations and capital improvements through the PFC, which is capped by federal law at $4.50 per passenger.

Some federal lawmakers have been trying to increase the cap of the PFC to $8.50, saying it would give airports more flexibility and local control to finance projects. Airlines oppose an increase in the PFC as they see it as a way to shift responsibility for airports away from Washington.

“Debt is a concern in airports of all sizes as we’ve seen our finances change very quickly,” Bumen said.

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Coronavirus Washington DC State and local finance Kentucky California Transportation industry Airport revenue bonds
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