Insights

Insights: The CARES Act – How to Strategically Prepare Your Airport for Life Post-Pandemic

As we navigate the unprecedented circumstances precipitated by the coronavirus pandemic, C&S’s professionals remain steadfast in providing our aviation clients expertise they can trust. We understand that many in the aviation industry may have questions surrounding recent legislation that was passed to alleviate some of the impacts of the pandemic. Our experts have broken this information down to its key elements, and in this article, share insights on what airports can do now to strategically prepare their airports for life post-pandemic.

Dollar folded into plane

What is the CARES Act?
The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed by Congress and enacted into law when signed by the President on Friday, March 27, 2020. This is the third in a series of bills in response to the impacts of the pandemic. The efforts of many in the aviation industry led to $10 billion being allocated for airports out of the $2.2 trillion total in this stimulus package to address the impacts of the ongoing global pandemic. Airlines also benefit with a total of $61 billion to be allocated to passenger and cargo carriers as well as contractors that support those carriers.

While many questions remain and the mechanics of the money being allocated to individual airports are currently being developed by the FAA, what we do know now is the $10 billion is divided as follows:

  • $500 million is dedicated to funding the non-federal portion of all Airport Improvement Program (AIP) grants awarded in federal fiscal year 2020
  • $2 billion for “any purpose for which airport revenues may be lawfully used.”
  • $100 million for general aviation airports distributed based upon NPIAS development costs
  • $7.4 billion will be available to commercial service airports for “any lawful purpose” to be distributed by:
    • Allocating 50% ($3.7 billion) based upon a commercial service airport’s percentage of the national calendar year 2018 enplanements.
    • The remaining 50% will be based upon “a sponsor’s fiscal year 2018 debt service as a percentage of the combined debt service for all commercial service airports and each sponsor’s ratio of unrestricted reserves to their respective debt service.”

The FAA is authorized to retain up to 0.1% of the total ($10 million) for award and oversight of the funding.

A post on FAA’s web site on March 31, 2020 indicates the intent to begin issuing CARES Act grants in April. We’ve also learned that early stage talks about a fourth relief bill are ongoing amongst members of Congress. It is believed there may be significant infrastructure stimulus funding in this bill should it move forward.

What can our airport do right now?

Image showing items on the list below

  • Contact your local FAA staff if you haven’t done so recently. While they are likely consumed with FY 2020 AIP activity and now with added burden to process this additional funding, staying in contact with your FAA contacts is critical at this time. If you planned to carryover FY 2020 entitlement dollars ask your FAA contact about any potential relaxation of the April 1, 2020 deadline.
  • Be prepared to provide updated information to the FAA to help them place the money as soon as possible. If you operate a commercial service airport, you’ve likely already been asked to update your Operating and Financial Summary, FAA Form 5100-127. However, if you haven’t now would be a good time to do so.
  • FY 2020 VALE and ZEV grants may be eligible for 100% funding. Airports with approved pre-applications should contact their ADO as soon as possible to confirm the federal share percentage prior to submitting final applications (due to FAA Headquarters by June 15).
  • Consider gaining approval now from your legislative body to be able to accept funds that may flow from the CARES Act. It is likely the pace of grants being offered will be such that pre-approval authority to accept these funds will be critical. Placing the provision in the legislative resolution that accepting the funds is contingent upon it being 100% federal dollars may temper concerns of the decision makers.
  • Consider accelerating current construction or maintenance projects to capitalize on low activity levels where possible without jeopardizing the safety or wellbeing of staff. This may be a unique opportunity to address items that may normally impact daily operations.
  • Continue to progress ongoing projects. Early discussions have been held about potentially postponing the May 18 grant application deadline for FY 2020 AIP dollars. But, so far FAA has not altered that deadline.
  • GA airports can expect to receive dedicated funding based upon NPIAS category. Based upon the language in the Act, it appears the funds will be distributed by NPIAS category. Preliminary calculations indicate the largest grants for National GA airports may be about $158,000 with smaller amounts for each of the other categories (Regional, Local, Basic and Unclassified).
  • Revisit your ACIP— the funding to transform AIP grants into 100% federal dollars may relieve some stress on your capital budgets.
  • Start planning for life after the pandemic. We all anticipate the world will be very different once we’ve moved past this crisis. It may seem difficult to see beyond this period with any clarity. But, thinking about that timeframe may likely pay dividends in terms of preparedness.

We’re here to help
The aviation experts at C&S are here and ready to assist you with your questions or needs. We can help you with numerous items including:

  • ACIP review and revisions
  • Project cost estimates
  • AIP grant applications and reimbursements
  • Project planning
  • Aircraft parking plans
  • Non-aeronautical land use planning
  • Virtual meeting hosting and facilitation
  • FAA coordination and communications
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