Agreement Reached on $2 Trillion COVD-19 Response Bill; $10 Billion in Airport Grants Included; $56 million for Essential Air Service

Top leaders in the House, Senate and Administration reached agreement on a compromise COVID-19 response bill last night. The Senate is anticipated to vote on the bill today, and then somehow the House of Representatives, which is currently on recess, will need to act on the bill to send it to the President for signature.

Generally, the additional $10 billion can be used for a wide variety of activities at airports, and reports indicate that it will likely be used to backfill revenue lost by airports due to the decline in traffic, including debt service and to help pay for operations and additional COVID-19 response activities. There is already discussion around the possibility of a fourth COVID-19 bill in May, in the form of a massive infrastructure package that could include airports.

The $10 billion in grants to airports is funded through the Treasury’s General Fund “to prevent, prepare for and respond to coronavirus.” Below are key parameters around the funding:

• The funding is made available until expended;
• Provides $500 million to pay for a 100 percent federal share for AIP grants issued under FY 2020 appropriations;
• Includes $7.4 million “for any purpose for which airport revenues may lawfully be used.” Of this amount:
• 50 percent shall be allocated among all commercial service airports based on the airport’s calendar year 2018 enplanements as a percentage of total 2018 enplanements at all airports;
• The remaining 50 percent distributed based on an equal combination of each airport’s 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 federal share of this funding shall be 100 percent.
• Contains an additional $2 billion for large, medium and small hub airports for any purpose for which airport revenues may be lawfully used, based on a modified apportionment formula:
• Preserves double entitlements and retains the $1 million minimum entitlement threshold for smaller primary airports;
• Also preserves the $600,000 apportionments for airports between 8,000-10,000 enplanements;
• Eliminates the PFC “turnback” for large and medium hub airports; and
• Removes the maximum apportionment cap;
• $100 million shall be used for general aviation airports;
• The FAA may retain 0.1 percent of the funding for administrative support.

The bill includes a provision in the House version that requires airports that receive this funding to continue to employ “at least 90 percent of the number of individuals employed by the airport.” The US DOT could provide a waiver to this requirement if an airport proves “economic hardship” or adverse effects on safety and security.

Finally, the House and Senate also agreed to $56 million in additional funding for the Essential Air Service program, to be derived from the General Fund.