The Government Funding Of Airports Essay

916 words - 4 pages

The Federal government has played very key roles in the funding of Airports. It has done this in two different ways. First, through the Airport Improvement Program (AIP) as well as discretionary grants which are funded by international departures, freight, aircraft fuel, as well as waybills. Secondly, the funding is done through the exemption of the airports from payment of federal tax upon interest income for individuals holding airport bonds.
Similarly, funds are usually generated by the Passenger Facility Charge program (PFC). This is usually under the administration of FAA. The local funds generated by this program ensure that there are improvements in the airports (Federal Aviation Administration, 2010).
Despite the fact that the capital investment of most of the airports are presently funded by cash reserves by the airports, commercial loans, debt capital which are raised through municipal bonds, as well as grants from Federal and state governments, sale of bonds which are exempted from tax as well as Federal grants which are provided through AIP program are the major financers of the main capital projects within the airports (Federal Aviation Administration, 2010).
Airport Improvement Program (AIP)
Airport Improvement Program (AIP) ensures that grants are provided to the public airports. In a number of instances, the grant covers private entities. The funding is majorly to ensure that there are significant developments of the airports that are used by the public.
Since the year 1980, a number of airports have attained significant developments. The capital developments were made possible through funding boosts made by the Federal government. This is through grants. The grants are usually given through the Airport Improvement Program (AIP). This program ensures that funds are available for terminal developments, construction projects, safety equipment, snow removal equipment, as well as numerous other significant projects. Generally, the grants provide about 90% of the net costs of the projects. For the 10% of the total cost that remains, the county is usually held responsible. Funding is also got from State of California Division of Aeronautics. This usually covers approximately 5% of total cost. It therefore reduces participation of the County to 5%. From 1985 to 1995, AIP financed about 14% of the total capital spending at big commercial airports, 28% at the commercial airports that are medium-sized as well as 41% at the relatively smaller airports. From the AIP funding, every airport within Trinity County gets $10,000 every year for maintenance, insurance as well as for minor improvements (Federal Aviation Administration, 2011).
Airport Improvement Program (AIP) ensures that federal grants are provided to airports. This is to ensure that there is effective and efficient planning and development of the airports. AIP is both for the large commercial airports that are publicly owned as well as the small...

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