[Senate Hearing 117-777]
[From the U.S. Government Publishing Office]
S. Hrg. 117-777
AVIATION INFRASTRUCTURE
FOR THE 21ST CENTURY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON AVIATION SAFETY, OPERATIONS, AND INNOVATION
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
JUNE 23, 2021
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
54-181 PDF WASHINGTON : 2023
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota ROGER WICKER, Mississippi, Ranking
RICHARD BLUMENTHAL, Connecticut JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts TED CRUZ, Texas
GARY PETERS, Michigan DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois DAN SULLIVAN, Alaska
JON TESTER, Montana MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona TODD YOUNG, Indiana
JACKY ROSEN, Nevada MIKE LEE, Utah
BEN RAY LUJAN, New Mexico RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado SHELLEY MOORE CAPITO, West
RAPHAEL WARNOCK, Georgia Virginia
RICK SCOTT, Florida
CYNTHIA LUMMIS, Wyoming
David Strickland, Staff Director
Melissa Porter, Deputy Staff Director
George Greenwell, Policy Coordinator and Security Manager
John Keast, Republican Staff Director
Crystal Tully, Republican Deputy Staff Director
Steven Wall, General Counsel
------
SUBCOMMITTEE ON AVIATION SAFETY, OPERATIONS, AND INNOVATION
KYRSTEN SINEMA, Arizona, Chair TED CRUZ, Texas, Ranking
TAMMY DUCKWORTH, Illinois JOHN THUNE, South Dakota
JON TESTER, Montana ROY BLUNT, Missouri
JACKY ROSEN, Nevada JERRY MORAN, Kansas
JOHN HICKENLOOPER, Colorado MIKE LEE, Utah
RAPHAEL WARNOCK, Georgia SHELLEY MOORE CAPITO, West
Virginia
C O N T E N T S
----------
Page
Hearing held on June 23, 2021.................................... 1
Statement of Senator Sinema...................................... 1
Statement of Senator Cruz........................................ 29
Statement of Senator Rosen....................................... 48
Witnesses
Danette Bewley, President and CEO, Tucson Airport Authority...... 3
Prepared statement........................................... 5
Paul Cullen, Vice President of Real Estate, Southwest Airlines... 11
Prepared statement........................................... 13
Paul Rinaldi, President, National Air Traffic Controllers
Association.................................................... 15
Prepared statement........................................... 16
Dr. Benjamin Miller, The RAND Corporation........................ 30
Prepared statement........................................... 32
Sean Donohue, CEO, Dallas Fort Worth International Airport....... 41
Prepared statement........................................... 42
Appendix
Letter dated June 25, 2021 to Hon. Maria Cantwell, Hon. Roger
Wicker, Hon. Kyrsten Sinema and Hon. Ted Cruz from Matt
Atkinson, President, Alaska Air Carriers Association and Jane
Dale, Executive Director, Alaska Air Carriers Association...... 53
Response to written question submitted by Hon. Tammy Duckworth
to:
Danette Bewley............................................... 55
Paul Cullen.................................................. 55
Sean Donohue................................................. 56
AVIATION INFRASTRUCTURE
FOR THE 21ST CENTURY
----------
WEDNESDAY, JUNE 23, 2021
U.S. Senate,
Subcommittee on Aviation Safety, Operations, and
Innovation,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The subcommittee met, pursuant to notice, at 3:16 p.m., in
room SR-253, Russell Senate Office Building, Hon. Kyrsten
Sinema, Chairman of the Subcommittee, presiding.
Present: Senators Sinema [presiding], Rosen, and Cruz.
OPENING STATEMENT OF HON. KYRSTEN SINEMA,
U.S. SENATOR FROM ARIZONA
Senator Sinema. Welcome to the Senate Subcommittee on
Aviation Safety, Operations, and Innovation. In our first
subcommittee hearing, this subcommittee looked at how the U.S.
aviation system has addressed its most significant challenge in
many years, COVID-19. To overcome that challenge, we saw all
aviation stakeholders, including airports, air carriers, labor,
manufacturers and concessionaires work together with Democrats
and Republicans to keep our aviation system functioning and
ready to rebound as we vaccinate Americans from COVID-19.
As we start to see air travel recover, this subcommittee
will now turn its focus to aviation infrastructure. Over the
past month, I have been leading bipartisan negotiations with
Senator Portman to invest broadly in our Nation's
infrastructure. Our bipartisan proposal has the support of 21
Senators, including 10 Democrats and 11 Republicans. As we
continue to negotiate that package, this is an appropriate time
for our subcommittee to consider our aviation system and its
infrastructure needs.
We have over 3,300 public airports in the United States,
including 200 just in Arizona. Throughout this vast system, we
need to ensure that we have the aviation infrastructure to
remain the world leader on safety, to improve the efficiency of
air travel, and to modernize air travel for the 21st century.
Studies on the current state of aviation infrastructure show
that we need to do better. For example, the American Society of
Civil Engineers report card on America's infrastructure gave
our country's aviation structure--infrastructure a D+. And
other reports have indicated there are over $100 billion of
aviation infrastructure projects necessary over the coming
years.
Before the pandemic, we saw record levels of airline
passenger traffic, which put pressure on our existing
infrastructure. This increased demand highlighted the need to
improve runways and taxiways, terminals and air traffic control
towers, to prevent overcrowding and delays. While COVID
temporarily decreased passenger traffic, the pandemic set us
further behind in our efforts to address our aviation
infrastructure needs. I was proud that the bipartisan Air Act I
introduced with Senator Fischer was included in the December
coronavirus relief bill. Our law helped stabilize Federal
funding for airports during the pandemic.
But despite congressional relief efforts, the abrupt
collapse of passenger traffic cut off many airport resources
and halted or delayed many projects scheduled to begin last
year. As passenger traffic rebounds, we will again see the
concerns associated with increased demand for passenger and
cargo flights. To address these concerns, we have to understand
what improvements are needed for our tarmac, terminals, and
towers, whether the structure to help pay for these
improvements needs to be revised, and how to ensure that all
airports can meet their needs regardless of whether they serve
a city like Tucson or smaller communities like Tombstone or
Tuba City.
Additionally, Congress should consider other options to
encourage aviation infrastructure development. For example, I
just reintroduced, along with Senator Young and Senator Cruz,
the Expedited Delivery of Airport Infrastructure Act. This
bipartisan legislation would allow airports to use airport
improvement program funds to incentivize contractors to finish
airport construction projects ahead of schedule. Currently,
airports cannot use AIP funds to incentivize early completion
of airport projects, even if the early completion would result
in significant capacity or efficiency gains for the airport.
Our bill allows airports to use up to $1 million in AIP money
to incentivize contractors to complete projects early,
resulting in cost savings and efficiency gains.
We have an excellent panel joining us today, with
representatives from airports, air carriers, air traffic
controllers, and an economist who has studied aviation
infrastructure to provide the Subcommittee with their testimony
about how to improve our aviation infrastructure, how to pay
for those improvements, and how to ensure that the U.S.
aviation system remains the best in the world. In particular, I
want to welcome an Arizonan to our panel today, Danette Bewley,
the President and CEO of the Tucson Airport Authority. I am
pleased that she is here to describe the infrastructure needs
at Tucson International Airport, and the comprehensive airfield
safety enhancement project underway at the airport. Thank you
all so much for being here today. And I turn the time over to
Senator Cruz for his opening statement.
If we are still waiting for Senator Cruz, then what I will
do is go ahead and introduce our panel and allow Senator Cruz
to provide his opening statement upon his availability. So I
would like to now recognize Senator Cantwell, if she is with
us, for her opening remarks. Alright, we are going to continue
to wait for Senator Cantwell as well. Senator Wicker--I just
want to check. Senator Wicker is not with us yet. Great.
So when they join we will allow them to do their opening
remarks. And we will move right to our introduction of our
witnesses. So I will introduce our witnesses for today's
hearings. Our first witness is Danette Bailey, the President
and CEO of the Tucson Airport Authority, which operates Tucson
International Airport and Ryan Airfield. She served as the
President and CEO of the Airport Authority since 2019, and she
has over 30 years of experience in airport management.
Thank you so much for your work and for joining us today.
And now you are recognized for your opening statement.
STATEMENT OF DANETTE BEWLEY, PRESIDENT AND CEO, TUCSON AIRPORT
AUTHORITY
Ms. Bewley. Good afternoon, Chair Sinema, Ranking Member
Cruz, and members of the Subcommittee. Thank you for holding
this important hearing to examine America's aviation
infrastructure needs. I think we all agree that America's
airports are fundamental component of our Nation's
transportation infrastructure and are essential to our Nation's
economic success.
We have a footprint in every community, annually supporting
$1.4 trillion in economic output and over 11 million jobs. To
meet the capacity demands of the future with safe, efficient,
and modern facilities that passengers and cargo shippers
expect, airports need to make new investments to maintain and
upgrade their infrastructure. Airport infrastructure suffered
from chronic underfunding even before the pandemic forced the
delay or postponement of many planned projects.
For far too long, instead of investing in larger, higher
impact projects that would improve facilities and increase
capacity, airports have been forced to prioritize smaller,
immediate needs, like maintenance of aging structures and
systems. Inadequate airport infrastructure that fails to meet
basic needs puts in jeopardy economic recovery in American
cities, states, and regions. In addition to creating jobs, new
investments in airports can be valuable tools in helping local
communities attract air service, which increases competition
and leads to lower airfares for passengers.
Airports Council International North America, the trade
association representing airports throughout the country,
released an updated infrastructure needs report detailing the
more than $115 billion in infrastructure needs over the next 5
years across the national airport system. Since this survey was
conducted in the middle of the pandemic, it does not fully
account for all of the new public health infrastructure
upgrades airports need to make, such as HVAC improvements,
physical distancing space near gates, and touchless technology
to assist passengers through the airport.
Coupled with the current debt burden of nearly $90 billion
from past projects, the report shows that our airports are
falling further behind in their efforts to upgrade their
facilities and improve the overall experience for their
customers. We need your help. At Tucson International, we
support a complex mix of aircraft, including commercial,
commuter, general aviation, and military. This airport is the
home of the Arizona Air National Guard's 162nd Wing.
In addition to providing national security, the Wing trains
our allied nation partners in the F-16 aircraft. To safely
support the needs of our many operators and meet current FAA
safety and standards, the TAA broke ground last fall on the
Airfield Safety Enhancement Project. That groundbreaking,
however, was a product of years of planning and preparation and
only a small step forward in the overall project. The $330
million project in today's dollars took nearly a decade to
clear Federal hurdles, including a planning study, EIS process,
record of decision, and multiparty negotiations with a myriad
of stakeholders.
This is one of several multimillion dollar infrastructures
that the TAA has on its list. However, without a committed and
reliable stream of Federal funding that is delivered
efficiently, it will be years before we can accomplish these
essential projects. As you know, airports are economic engines
for their respective communities. Small and medium hub airports
feed the national aviation system and serve the needs of
millions of travelers each year.
Unfortunately, many small and medium hub airports have
infrastructure that has long outlived their useful life spans
and are now operating in a rent to fail mode because they lack
reliable sources and streams of funding. Terminal improvements
at large hub airports through which many of our passengers
connect also helps smaller airports become--because greater
capacity at those hubs allows for greater service to smaller
communities. If the hubs are constrained, incumbent carriers
will maximize profit on routes between large cities and new
entrants will not be able to access the market.
These market distortions drive up airfares and reduce
flight choices for consumers. Implementing the following policy
recommendations for infrastructure legislation will help
airports pay for their growing list of capital projects, as
well as support jobs, stimulate local economies, and prepare
for rising passenger levels in the recovery ahead. Provide
direct funding, Federal funding for airport infrastructure
projects by providing at least $50 billion in new funding over
the next 5 years for all sized airports. That includes broad
flexibility to allow for a variety of needed projects.
Direct Federal investment in this period of economic
recovery would help airports pay for the growing list of
capital projects while other funding sources remain
constrained. Modernize the outdated Federal cap on airport
local user fees by considering a gradual phased in approach
that would restore the original purchasing power of the $4.50
PFC. To that end, bipartisan legislation has been introduced in
the House that starting in 2023 would allow airports to
increase the PFC by $1 annually for 4 years and then index it
annually for inflation.
This would provide America's airports a long term, locally
controlled, and reliable funding source to maintain and upgrade
their aging facilities and remain competitive. Help airports
finance critical infrastructure projects by allowing airports
to continue to finance critical infrastructure projects with
tax exempt municipal bonds and private activity bonds and
eliminate the alternative minimum tax penalty on airport
private activity bonds.
Expand the Transportation Infrastructure, Finance and
Innovation Act for airport development projects. Exclude
airport private activity bonds--funds completely from the
alternative minimum tax. Reinstate advanced re-funding on all
municipal bonds, including private activity bonds. Restore the
interest exemption for banks investing in airports. And support
and fund the contract tower program. TAA and the Nation's
airports are in critical need of infrastructure funding.
On behalf of the TAA and our great Nation's airports, thank
you for inviting me to speak today about airport infrastructure
needs. Your support is appreciated. Thank you.
[The prepared statement of Ms. Bewley follows:]
Prepared Statement of Danette Bewley, President and CEO,
Tucson Airport Authority
Chair Sinema, Ranking Member Cruz, and members of the subcommittee,
thank you for holding this important hearing to examine America's
aviation infrastructure needs. I am Danette Bewley, President and CEO
of the Tucson Airport Authority. The TAA operates Tucson International
Airport (TUS), the region's major commercial airport, and Ryan Airfield
(RYN), a general aviation airport west of Tucson. Our authority is a
unique nonprofit created and developed by community business leaders
and established by Arizona state charter in 1948.
Airports Can Build the Runway to Economic Recovery and Growth
As we have demonstrated in Tucson, America's airports are a
fundamental component of our Nation's transportation infrastructure and
are essential to our Nation's economic success. We have a footprint in
every community, annually supporting $1.4 trillion in economic output
and 11.5 million jobs. To meet the capacity demands of the future with
safe, efficient, and modern facilities that passengers and cargo
shippers expect, airports need to make new investments to maintain and
upgrade their infrastructure.
Airport infrastructure suffered from chronic underfunding even
before the steep decline in air travelers and airport revenue during
the COVID-19 pandemic forced the delay or postponement of many planned
projects. For too long instead of investing in larger, higher-impact
projects that would improve facilities and increase capacity, airports
have been forced to prioritize smaller, immediate needs like
maintenance of aging structures and systems.
Inadequate airport infrastructure that fails to meet the growing
needs of local businesses and tourists puts in jeopardy economic
recovery in American cities, states, and regions. In addition to
creating jobs, new investments in airports can be valuable tools in
helping local communities attract air service, which increases
competition and leads to lower airfares for passengers. Airports need
additional resources to build the terminals, gates, runways, and ramps
necessary to attract new air carriers and entice existing ones to
expand service. The traveling public gets more choices and lower
airfares when airports can build the facilities that provide more
airline options and more service alternatives.
Airports Continue to Face Substantial Infrastructure Needs
As travelers begin to return to America's airports, one thing has
not changed: our airports continue to face substantial infrastructure
needs. In March, Airports Council International--North America (ACI-
NA), the trade association representing airports throughout the
country, release an updated infrastructure needs report detailing the
more than $115 billion in infrastructure needs over the next five-year
across the national airport system. Since this survey was conducted in
the middle of the pandemic last summer, it does not fully account for
all the new public-health infrastructure upgrades airports need to
make, such as HVAC improvements, physical distancing space near gates,
and touchless technology to assist passengers through the airport.
Coupled with a current debt burden of nearly $90 billion from past
projects, the report shows that our airports are falling further behind
in their efforts to upgrade their facilities and improve the overall
experience for their customers.
Tucson International Airport (TUS) Infrastructure Projects
Tucson International Airport (TUS) supports a complex mix of
aircraft: commercial air carrier, commuter, general aviation, and
military. TUS is the home of the Arizona Air National Guard 162nd Wing.
In addition to providing national security, the Wing trains our allied
nations in the F-16 aircraft.
Airfield Safety Enhancement Project
To safely support the needs of our many operators and meet
current FAA safety and standards, the TAA broke ground on the
largest project in its history last fall. That groundbreaking,
however, was a product of years of planning and preparation,
and only a small step forward in the overall project. The
Airport Safety Enhancement Project, an approximate $330M
project (in todays' dollars), took nearly a decade to clear
Federal hurdles, including a Planning Study, Environmental
Impact Statement (EIS) and Record of Decision (ROD), and multi-
party negotiations with a myriad of stakeholders.
The project was born out of the exceptionally high number of
runway incursions, wrong surface landings and pilot deviations
due to confusion in various areas, referred to as ``hot
spots,'' which compromise the safety of all operators and
users, and have the potential to cause loss of life. To
mitigate these issues, the project includes bringing portions
of the airfield up to current FAA safety standards. In essence,
the project will demolish and relocate a parallel runway (to
ensure adequate safety separation between the two parallel
runways), add a center taxiway between the parallel runways for
added safety, and adds new taxiways to support the new airfield
layout and infrastructure. Successful completion of this
project is contingent on a committed source and steady stream
of Federal funding that will allow the project to proceed
efficiently and minimizes excessive project costs that come
with a longer, multi-year process. As you know, time is money.
Optimally, our plan is to complete this essential safety and
infrastructure project within 4-6 years. That timing is
entirely dependent on Federal funding. This is an aggressive
schedule; however, safety is paramount.
Terminal Infrastructure
Integrated In-Line Explosive Detection System
The Tucson Airport Authority is engaged in a Terminal
Study to outline a phased approach to improve the
terminal to meet the long-term needs at TUS. The first
phase of work includes the construction of an
Integrated In-Line Explosive Detection System (security
screening for passenger checked baggage) to replace
five (5) outdated, disconnected and undersized pods
that the TSA utilize. The existing stand-alone system
is outdated, and because of its' age has multiple
points of failure that require regular heavy
maintenance. In addition, the system forces the TSA to
staff these individual areas, which is an inefficient
use of labor resources. The new Integrated In-Line
Explosive Detection System will provide an updated and
efficient approach to checked baggage security
screening and decrease TSA labor costs. The cost for
this project will not be determined until the study is
complete. However, without available infrastructure
funding it could be years before the TAA can invest in
this essential security project.
Concourse Expansion
To meet passenger growth and demand, future phases of
terminal improvements require concourse expansions to
both Concourse A and Concourse B at TUS. This includes,
and is not limited to, gate additions with appropriate
hold room space to meet capacity demand and airline
fleet requirements (aircraft size), concessions space
to provide passengers with expected amenities and allow
the airport with a source of revenue generation,
airline support space, etc. The cost for expansion will
not be determined until the study is complete. However,
without available infrastructure funding it could be
years before the TAA can invest in this essential
capacity project.
Landside
The TAA is a stakeholder in a Transit Study underway by the
City of Tucson. The project will evaluate ways to improve
multi-modal access between downtown Tucson and TUS through Bus
Rapid Transit or Light Rail. The TAA will need to plan and
construct a transit center close to the terminal. Cost
estimates are not yet available. However, without available
infrastructure funding it could be years before the TAA can
invest in this multi-modal project.
Cargo Infrastructure
A result of the COVID-19 pandemic is a significant increase in
air cargo traffic at TUS (and nationwide). TUS is in the
planning stage for additional Cargo Apron space (construction)
to meet the demand. While the air cargo operators have
traditionally paid for their building and sortation facilities,
airports must pay for the basic infrastructure costs (concrete,
utilities, etc.) through Airport Improvement Program (AIP)
funds, other grant sources or other funding sources.
Preliminary estimates for the first phase of cargo apron
expansion range between approximately $15-$20M dollars (in
todays' dollars), depending on capacity.
Roadway Infrastructure
To meet both the anticipated growth in multi-modal cargo needs
and improve passenger access to the TUS terminal, TAA is in the
process of preliminary design to extend Country Club Road, a
main access road, to the south. This $15-$20M project (in
todays' dollars) will also provide access to airside and
landside parcels which will increase economic development
opportunities. Related to this project is the current ADOT Tier
1 study to construction the Sonoran Corridor. The Corridor will
provide a connection between I-19 and I-10 south of TUS and
will relieve congestion at the current interchange, improve
access to TUS for passengers traveling from south side of the
region, and enhance the cargo and logistic flow coming from
Mexico to the entire county.
Other Airports
In addition to being economic engines for their respective
communities, small-and medium-hub airports feed the national aviation
system and serve the needs of millions of travelers each year. Yet many
small-and medium-hub airports have infrastructure that has long
outlived their useful lifespans and are now operating in a ``run to
fail'' mode because they lack reliable sources and streams of funding.
These airports are forced to deal with infrastructure issues related to
facility age, exceeded design capacities, outdated technology,
congestion, environmental issues, etc., which causes inefficiencies,
higher costs, lower levels of service, and loss of business through
missed opportunities. The delivery of sound and reliable airport
infrastructure is an essential factor for economic growth and for the
health of the national aviation system.
Terminal improvements at large-hub airports, through which many of
our passengers connect, also help smaller airports because greater
capacity at those hubs allows for greater service to smaller
communities. If the hubs are constrained, incumbent carriers will
maximize profit on routes between large cities and new entrants will
not be able to access the market. These market distortions drive up
airfares and reduce flight choices for consumers.
I also want to highlight a few of the airport infrastructure
projects slated to be underway over the next few years at airports
across the country. The needs are great at all airport hub sizes and
collectively as an industry the needs are greatest for terminal
construction. The ACI-NA infrastructure study shows $40 billion in
terminal projects alone.
Salt Lake City International Airport (SLC)
The Salt Lake City International Airport has a $768 million new
terminal project that will allow for more efficient and
sustainable state-of-the art facility with the ability to meet
changing passenger needs for decades to come. It consolidates
all air-carrier passenger-processing operations into a single,
multi-level terminal building, replacing three older unit
terminals. Accommodating both domestic and international
flights, the terminal includes areas for all essential spaces
needed for passenger and airline operations.
The terminal building also includes a new baggage system that
will cost $199 million and consists of both inbound and
outbound baggage-handling equipment. The new consolidated
outbound system has baggage entry points at the ticketing level
of the terminal, the terminal curb, and remote check-in
counters. The outbound baggage system includes a fully
integrated centralized in-line baggage screening matrix
including six explosive detection system machines. The second
phase of construction will extend the outbound sortation system
to remote Concourse B via high-speed conveyors.
Kansas City International Airport (MCI)
My colleagues in Kansas City are also working on a new $1.5
billion terminal. The new terminal is over one-million square
feet, making it the largest single infrastructure project in
the city's history. It will have a lasting economic impact on
the region in the form of supporting new jobs and opportunities
for local and small businesses, as well as creating a first-
class traveler experience for airport users. The terminal will
open with 39 gates, with the ability to expand to 50 gates in
the future. When complete, the facility will replace the
airport's dated and aging terminals, which opened in 1972.
The shift in consumer buying to e-commerce has presented a unique
opportunity for airports to expand cargo capacity and operations.
Airports of all sizes need the necessary infrastructure in place to
capitalize on these opportunities.
Savannah-Hilton Head International Airport (SAV)
Savannah Hilton Head Airport has a $60 million project that
will offer growth opportunities for the airport's current air
cargo providers, as well as provide additional space for new
tenants. It will allow expanded ramp parking to handle up to
five Boeing 767 aircraft with room for ground service equipment
storage, in addition to the 60,000 square feet of cargo tenant
space. With close access to local highways, businesses could
expect to have shipments sorted and on the road within two
hours of a flight landing. Additionally, the facility will be
situated close to the local Customs and Border Protection
office, allowing for quick access to shipment clearance.
Other projects detailed in the ACI-NA infrastructure report include
COVID-related HVAC and smart-restroom upgrades at Dallas-Fort Worth, a
new international arrivals facility in Seattle, and a terminal
expansion in Atlanta.
Airport Priorities for Infrastructure Legislation
Given these significant needs across the country, it is time to
find the means to rebuild our Nation's aviation infrastructure and
improve the passenger experience for millions of travelers. The cost of
doing nothing is further paralysis of the aviation system as we seek to
rebuild our economy from the devastating impacts of the COVID-19
pandemic. Implementing the following policy recommendations for
infrastructure legislation would go a long way towards helping airports
pay for their growing list of capital projects, as well as support
good-paying jobs, stimulate local economies, and prepare for rising
passenger levels in the recovery ahead.
Provide Direct Federal Funding for Airport Infrastructure Projects:
As airport capital needs and the list of necessary repairs for aging
facilities continue to mount, Congress can help by providing direct
Federal funding for new airport capital projects in the infrastructure
package. Specifically, we urge you to provide at least $50 billion in
new funding over the next five years for all-sized airports that
includes broad flexibility to allow for a variety of needed projects,
such as runways, taxiways, terminal upgrade/expansions, public health
improvements, security enhancements, and roadway/transit access
improvements. Direct Federal investment in this period of economic
recovery would go a long way toward helping airports pay for their
growing list of capital projects while other funding sources remain
constrained. We appreciate that crucial funding for airport
infrastructure projects has been included in proposals put forward by
President Biden and Senators from both sides of the aisle who are
seeking a final agreement on a comprehensive infrastructure package.
Modernize the Outdated Federal Cap on Airport Local User Fees: To
ensure continuity in funding airport infrastructure projects once the
additional Federal funding is exhausted, airports urge Congress to
adjust the outdated Federal cap on local Passenger Facility Charges
(PFCs). Since PFCs are local user fees (not taxes) imposed by states or
units of local government, they are not collected by the Federal
government, not spent by the Federal government, and not deposited into
the U.S. Treasury. Instead, PFCs go directly to fund local airport
projects approved by the FAA--with input from airlines and local
communities--at no cost to the Federal government.
Last changed more than 20 years ago, the PFC cap has not kept pace
with rising construction costs and inflation since it was last adjusted
to $4.50 in 2000, and its purchasing power has eroded by 40 percent.
Modernizing the outdated Federal cap on the PFC in this time of scare
Federal resources would give airports the self-help they need to invest
in the terminals, gates, and ramps necessary to attract new air
carriers and entice existing ones to expand--thereby promoting
competition and lowering airfares for their communities.
TAA's PFC authorization, used for a $33M terminal infrastructure
project in 2015, and other purposes, is currently burdened for
approximately 2.5 or more years of collection, assuming a steady return
of passengers. You understand how that limits TAA's ability to utilize
this more flexible local funding mechanism to address TAA's ongoing
infrastructure needs.
Considering the pandemic, Congress must consider a gradual, phased-
in approach that would restore the original purchasing power of the
$4.50 PFC. To that end, bipartisan legislation has been introduced in
the House that starting in 2023 would allow airports to increase their
PFC by $1.00 annually for four years and then index it annually for
inflation. This would provide America's airports a long-term, locally
controlled, and reliable funding source to maintain and upgrade their
aging facilities, plan for the future, and remain competitive in an
increasingly interconnected world.
Help Airports Finance Critical Infrastructure Projects: With
limited Federal funds available and an outdated Federal cap on local
user fees, airports often turn to the bond market to help finance their
infrastructure projects. To help lower airport borrowing costs,
Congress should ensure that airports can continue to finance critical
infrastructure projects with tax-exempt municipal bonds and private
activity bonds and eliminate the alternative minimum tax penalty on
airport private activity bonds. While not a substitute for new, direct
investment in airports, we suggest the following modifications to tax
and lending law to help facilitate greater airport infrastructure
upgrades nationwide
Expand the Transportation Infrastructure Finance and
Innovation Act (TIFIA) to airport development projects.
Exclude airport private activity bonds completely from the
alternative minimum tax.
Reinstate advance refundings on all municipal bonds,
including private activity bonds.
Restore the interest exemption for banks investing in
airports.
Airports often use bonds to construct and renovate terminals,
maintenance facilities, parking garages, and other facilities. Over the
past decade, about 60 percent of bonds issued to finance airport
capital projects were issued as private activity bonds, a special type
of municipal bond that is issued to finance a facility that serves a
public purpose for the benefit of a private user like an airline.
Without access to cost-efficient financing many airports will be unable
to undertake many needed infrastructure-improvement projects--and as a
result, the anticipated job creation and economic activity from these
activities will not be realized.
PFC Is the Long-Term Solution to Address Airports' Infrastructure
Funding Shortfalls
With America's airports facing over $115 billion in infrastructure
needs across the system, it is time to find the means to rebuild our
Nation's aviation infrastructure and improve the passenger experience
for millions of air travelers.
It is a common misconception that airports are funded with taxpayer
dollars or a general tax on all citizens. Though, infrastructure
projects at U.S. airports are funded primarily with Federal grants
through the FAA's AIP, the PFC, and airport-generated revenue from
tenant rents, non-aeronautical development, and fees on other
commercial activity at airport. Airports often turn to private-capital
markets to debt-finance projects, using both PFC-revenue and airport-
generated revenue to repay the bonds.
Traditionally AIP grants--which prioritize safety improvements--
have been used on airfield projects, while PFC user fees--with greater
funding flexibility--have gone towards terminal, ground-access, and
major-runway projects. Both are essentially reimbursement programs used
to pay for past or existing projects. In the case of PFCs, airports
often have committed this revenue-stream for years or decades into the
future to repay past projects, meaning they have no new money coming
into the system to fund future projects. Federal law requires airports
to be self-sustaining, yet it also artificially distorts and constrains
the very funding mechanisms designed to ensure market competition and
airport-infrastructure growth, as the Federal cap on the PFC has been
in place since 2000, and Federal entitlement grants through the AIP
have remained stagnant for over a decade.
Thus, under the industry's current financing-funding model airports
lack stable, predictable funding sources that keep pace with travel
growth, rising construction costs, and inflation for these intensive
capital projects. The PFC cap--last adjusted twenty years ago--has seen
its purchasing power eroded by 40 percent in the past two decades. And
Federal airport grants through the AIP remain stagnant each year under
the most recently enacted FAA reauthorization legislation. Moreover,
many airports--even those with sterling credit ratings--have reached
their debt capacity and either cannot finance new projects or have had
to phase in their projects over a longer timeframe, increasing the
costs and delaying the benefits for passengers
Fortunately, we can rebuild America's airports without raising
taxes or adding to deficit spending by modernizing the Federal cap on
the PFC. Modestly adjusting the anti-competitive Federal cap on local
PFCs would allow airports to take control of their own investment
decisions and become more financially self-sufficient. Airports could
build the appropriate facilities--terminals, gates, baggage systems,
security checkpoints, roadways, and runways--to meet the travel demands
and customer expectations of their community.
It is important to remember PFCs are not taxes (the Tucson Airport
Authority has no taxing authority and cannot impose a tax as airport
sponsor on passengers)--they are local user fees determined locally and
used locally to help defray the costs of building airport
infrastructure that benefits customers by improving the passenger
experience and spurring airline competition. PFCs are imposed by states
or units of local government; so, they are not collected by the Federal
government, not spent by the Federal government, and not deposited into
the U.S. Treasury. Instead, PFCs go directly to fund local airport
projects approved by the FAA, with input from airlines and local
communities.
At a time of mounting pressure on our Federal budget, modernizing
the Federal government's cap on the PFC is the simplest and most free-
market option for providing airports with the locally controlled self-
help they need to fund vital infrastructure projects. It would give
airports more flexibility to self-finance and leverage private
investment without the need for additional taxpayer dollars, thereby
allowing airports of all sizes to generate more local revenue for
terminals, gates, runways, and taxiways that would increase capacity,
stimulate competition, enhance safety and security, and improve the
overall passenger experience. Ultimately, modernizing the PFC is the
best way to meet the travel challenges of today and build for a strong
economy in the 21st century.
Separating Fact from Fiction on the PFC
Finally, I would like to correct the record on numerous
misstatements being made about the current state of U.S. airports. The
truth is that modernizing airport facilities, growing air service
options, cultivating new economic prospects, and improving the
passenger experience is the best interest of every local community.
CLAIM: We should not be raising taxes during a pandemic.
FACT: First, the PFC is a user fee, not a tax. The fee is
collected by the airline and then sent right back to
the airport that the passenger utilized. The money
never goes to the Federal treasury or the FAA trust
fund in Washington. It is collected locally and spent
locally.
Second, airports are leading the COVID-19 recovery,
investing in a range of projects to move swiftly to
respond to and mitigate the spread of COVID-19. For
the long haul, airports must continue to be leaders
in health infrastructure, and they will need adequate
funding to ensure they are well-equipped to handle
similar crises in the future. COVID-19 may have
caused a temporary drop-off in passenger levels, but
we must prepare for their return. With the current
trajectory of cases and vaccinations, we expect
passenger levels to increase in the months and years
ahead. Airports must be ready to support the
increased movement of people and goods to enable a
stronger economy. Without these much-needed
investments, limited capacity and outdated facilities
will hold back airports and our economic recovery.
CLAIM: It is unfair to price-sensitive passengers to raise
the cap on the PFC.
FACT: Despite the pandemic, airports need to repair aging
facilities, invest in critical infrastructure, and
prepare for the recovery ahead. To help with those
ongoing efforts, airports are continuing to urge
Congress to raise or eliminate the outdated PFC cap.
Because of the challenges presented by the pandemic
Congress could also consider a gradual, phased-in
approach to adjusting the Federal cap on the PFC.
Under either scenario, adjusting the local user fee
will lead to improved airports by:
CLAIM: We do not need to raise the cap on the PFC because
airports have either halted many construction
projects, or there is not the need for these projects
post-pandemic.
FACT: Many airports have deferred projects due to the
pandemic, but once travel resumes many of these
projects will need to be completed. Airports need a
long-term source of revenue to make necessary
improvements to the health, safety, security, and
physical infrastructure of our facilities. These
projects are not about fancy terminals, but about
making necessary upgrades to decades-old terminals,
increasing capacity for the rapid rise in passenger
travel, and contributing much-needed growth to local
and regional economies. Airports can be either an
accelerator to growth or a bottleneck to it. We need
to ensure that airports can withstand similar
emergencies in the future by investing in important
technologies and expanding capacity at our airports
to safely accommodate many passengers. Better airport
infrastructure can not only help us recover more
quickly but can also make that recovery stronger and
more sustainable.
CLAIM: Airports are flush with cash.
FACT: Airports are projected to experience at least $40
billion in lost revenue and increased costs from
March 2020--March 2022 because of the pandemic, and
airports hold about $87 million in old debt. Prior to
the pandemic airports did maintain cash reserves to
comply with bond covenants and save in rainy-day
accounts. With that rainy day here, airports have had
to tap into these cash reserves to make debt payments
and maintain operations. Additionally, airports have
reduced costs to airlines and provided millions in
relief to renters and concessionaires to help them
stay afloat during the pandemic. As a result,
airports have had spent down their reserves and seek
emergency relief funds from Congress just to stay
open, maintain operations, and keep their staff.
CLAIM: If there are infrastructure needs at airports,
airlines will pay for them.
FACT: While most airport infrastructure projects were not
financed by airlines before the pandemic, they
certainly are in no financial position to improve
airport infrastructure now. In fact, nearly 90
percent of all airport funding comes from airport-
generated income, Federal grants, and PFC
collections. Even in previous cases when airlines did
``fund'' airport infrastructure projects it was
rarely direct money, rather payments that came from
their regular landing fees and use-and-lease
agreements at airports. Moreover, the airlines tend
to focus their investments on their hubs while
providing little to no infrastructure investment at
smaller commercial service airports around country.
Senator Sinema. Thank you so much. Our next witness is Paul
Cullen, the Vice President for real estate at Southwest
Airlines. He has been with Southwest for over 15 years and is
responsible for managing Southwest airport and facility assets,
including long-term airport and facilities planning,
development, design and construction. Mr. Cullen, thank you for
joining us today. And you are now recognized for your opening
statement.
STATEMENT OF PAUL CULLEN, VICE PRESIDENT OF REAL ESTATE,
SOUTHWEST AIRLINES
Mr. Cullen. Thank you. Good afternoon, Chair Sinema,
Senator Cruz, and members of the Aviation subcommittee. My name
is Paul Cullen and I serve as Vice President of Real Estate for
Southwest Airlines. Today, I am excited for the opportunity to
share how Southwest continues to partner with airports to
invest scores of billions into airport infrastructure. Before
the pandemic, from a real estate perspective, anyway, the wind
was at our back. We had just launched our inaugural service to
Hawaii, and we had recently moved in to brand new facilities in
La Guardia and in New Orleans.
Furthermore, we were excited about our upcoming moves into
new facilities that were being constructed in airports such as
Natural, Salt Lake City, Los Angeles LAX, and Portland, Oregon.
Putting aside the projects that were already under
construction, we are also actively engaged with our airport
partners on future terminal projects, projects that we are
still in the planning or concept phase.
In aggregate, those projects total the pipeline of well
over $50 billion, and that is just airports that Southwest
serves. When the pandemic hit, passengers essentially
disappeared overnight, and the financial gravity of the
situation quickly became apparent. At Southwest, our focus
immediately turned to two key concerns. Number one, protecting
our employees and our customers, and number two, preserving and
generating cash. To that second point, I want to express our
gratitude to leaders on this committee for the support provided
to both airports and airlines during the pandemic to save jobs
and support the survival of our industry. Concerning the
airlines, we will be forever grateful for Congress--for the
Congress's enactment of the payroll support program, or PSP.
Southwest takes considerable pride in never having had a
furlough or lay off during our 50 year history. That streak was
in serious jeopardy of being broken if not for PSP. So on
behalf of my 56,000 fellow employees, I want to extend my
heartfelt appreciation for you being there during our darkest
hour. I am also happy to report that Southwest did not cease
service to any of our domestic airports at any point during the
pandemic. In fact, not only do we not cease service, we
actually welcomed 18 new airports to our route map, and in
doing so, millions more Americans now have access to our low
fares and our legendary customer service and hospitality.
Today, passengers are starting to return, but please don't
interpret that to mean that everything is back to normal. At
Southwest, our revenues remain well below 2019 levels, and we
have yet to break even in any month since the pandemic began.
Going back to those new airport facilities that were under
construction before the pandemic began, those largely continued
as planned. And by way of example, earlier this month, we
celebrated the on time opening of the new terminal 1.5 at LAX.
Looking to next year, we are particularly excited about the
growth opportunities provided by the soon to be completed
terminal expansions in Phoenix and in Denver and Las Vegas. And
looking into 2023, we are excited about future growth
opportunities in Nashville and Kansas City, where multibillion
dollar terminal investments are scheduled to complete.
Regarding the over $50 billion pipeline of airport projects
that were in the planning or concept phase before the pandemic,
progress there understandably paused as airports and airlines
wanted to see what the post pandemic environment might look
like. But that temporary pause is over, and momentum is
starting to pick back up.
Turning quickly to financing, we believe that the current
system of funding airport investment through multiple streams
of dedicated revenue has been highly successful in meeting
airports' infrastructure improvement needs. At Southwest, we
strongly believe that increased taxes and fees on passengers
does the most harm to price sensitive customers and to smaller
markets. Furthermore, we cannot lose sight to the fact that the
vast majority of airline consumers today are flying for
leisure, and leisure passengers have always been very price
sensitive.
Thankfully, similar to the last decade, none of the future
projects included in the over $50 billion pipeline is dependent
or contingent upon an increase to the passenger facility charge
or PFC. In closing, Southwest Airlines appreciates this
committee's commitment to a thriving aviation sector and your
recognition of the importance of air travel.
And we thank you for your support you provided to both
airports and airlines during the pandemic. Thank you again for
the opportunity to testify. I will await your questions.
[The prepared statement of Mr. Cullen follows:]
Prepared Statement of Paul Cullen, Vice President of Real Estate,
Southwest Airlines Co.
Good afternoon Chair Sinema, Senator Cruz, and members of the
Aviation Subcommittee. My name is Paul Cullen, and I have the privilege
of serving as the Vice President of Real Estate at Southwest Airlines.
My Team's responsibility includes activities such as long-term planning
and development, facility design and construction, and lease and
contract negotiations. I'm excited for the opportunity to share how
Southwest is partnering with our airports to invest scores of billions
into airport and aviation infrastructure, as we collectively work to
keep costs low while we recover from the pandemic.
PRE-PANDEMIC
Before the pandemic, from a real estate perspective, the wind was
at our back. We had just launched our inaugural service to Hawaii--a
major milestone for us. And we had recently moved into brand new
facilities in LaGuardia Airport and Louis Armstrong New Orleans
International Airport. Furthermore, we were excited about our upcoming
moves into new facilities that were being constructed in airports such
as Nashville, Salt Lake City, Los Angeles, and Portland, Oregon.
Putting aside those projects that were already under construction,
we were also actively engaged with our airport partners on future
terminal projects--projects that were still in the planning or
conceptual stage. In aggregate, those projects totaled a pipeline of
well over $50 Billion--and that's just at airports served by Southwest
Airlines. For reference, this pipeline includes projects such as the
new terminal at Pittsburgh International, and the terminal replacement
in Burbank/Hollywood, California.
THE PANDEMIC
When the pandemic hit, passengers essentially disappeared
overnight. Bustling terminals became ghost towns, and the financial
gravity of the situation quickly became apparent. It is certainly no
exaggeration to say that the past 15 months (and counting) have been
the worst financial period in the history of commercial passenger
aviation.
To illustrate the devastating impacts of the pandemic, Southwest
Airlines' operating revenues in April 2020 decreased by 92 percent
year-over-year. While our financial situation steadily improved since
then, it is important to note that our last public earnings release
reported that our March 2021 operating revenues were still down 54
percent compared with March 2019.
When the pandemic first hit and we realized the severity of the
situation, Southwest's focus quickly turned to two overarching
concerns: 1) protecting our Employees and our Customers, and 2)
preserving and generating cash.
To that point, I want to express our gratitude to leaders on this
Committee for the support provided to both airports and airlines during
the pandemic to save jobs and support the survival of our industry.
Concerning the airlines, we will be forever grateful for the Congress's
enactment of the Payroll Support Program (or PSP). Southwest takes
considerable pride in never having had a layoff or furlough during our
50 year
history. That streak was in serious jeopardy of being broken this
year if not for PSP. So, on behalf of my 56,000 fellow Employees, I
want to extend my heartfelt appreciation for you being there during our
darkest hour.
I am also happy to report that Southwest did not cease service to
any of our domestic airports at any point during the pandemic. In fact,
not only did we not cease service, we actually welcomed 18 new airports
to our route map. We added smaller markets like Bellingham, Washington;
Eugene, Oregon; Bozeman, Montana, and Jackson, Mississippi, while also
opportunistically adding larger airports like Chicago O'Hare, Houston
Bush Intercontinental, and Miami International Airports.
Growing our network during the pandemic may seem counterintuitive,
but demand across our pre-pandemic network was significantly depressed.
At these depressed levels of travel demand, leisure travelers have
outpaced business travelers, and adding these new airports allowed us
to keep our Employees working and our idle aircraft productive, while
generating new revenue in many leisure-oriented destinations. And, as
an added bonus, millions more Americans now have access to our low
fares, and our award winning Customer Service and Hospitality.
Today, passengers are starting to return--still primarily leisure
passengers--but please don't interpret that to mean everything is back
to normal. At Southwest, our revenues remain at significantly depressed
levels relative to 2019, and we have yet to breakeven in any month
since the pandemic began. Per data supplied by our trade association--
Airlines for America--revenues for the U.S. airlines collectively
during the month of May 2021 were down 45 percent from May 2019 levels.
AIRPORT CONSTRUCTION TODAY & LOOKING FORWARD
Going back to those new airport facilities that were under
construction before the pandemic--those largely continued as planned
and we made considerable progress throughout the past 15 months. In the
case of LAX, for example, we just celebrated the opening of the new
Terminal 1.5 earlier this month. This was a project that Southwest
Airlines led, and it was completed on-time, and well below budget.
Looking to next year, we are particularly excited about the growth
opportunities provided by the soon to be completed terminal expansions
at Denver International, Phoenix Sky Harbor International, and Las
Vegas McCarran International Airports. And looking into 2023, we are
excited about future growth opportunities in Nashville and Kansas City,
where multi-billion dollar terminal investments are scheduled to come
online on-time and on-budget. These are all examples of construction
projects occurring right now.
Regarding the $50-plus billion pipeline of airport projects that
were in the planning or concept phase before the pandemic--progress
there understandably paused as airports and airlines waited to see what
the post-pandemic world might look like. But that temporary pause is
over as project teams have been reengaging, and momentum continues to
pick up. That's not to say that airports and airlines will agree on
everything--like many things--we'll debate ``the needs'' and ``the
wants'', but we have a long track record of finding a common ground.
Turning quickly to financing, we believe that the current system
for funding airport improvements through multiple streams of dedicated
revenue has been highly successful in meeting airports' critical
infrastructure improvement needs--be those related to safety, security,
the environment, the customer experience, or capacity for future
growth. We strongly believe that increased taxes and fees on passengers
does the most harm to price-sensitive Customers and to smaller markets,
such as many of the 18 new airports we have added or announced since
the pandemic began.
We cannot lose sight of the fact that that the vast majority of all
airline consumers today are flying for leisure or personal reasons, and
those types of passengers have always been incredibility price-
sensitive and thus the reason for historically low airfares since the
pandemic began. Until business traffic returns to pre-pandemic levels--
which no one can confidently predict when that will occur--we expect
average airfares to remain relatively low for the foreseeable future.
Thankfully, none of the over $50 billion in the pipeline is dependent
or contingent upon an increase in the Passenger Facility Charge (PFC).
I want to again recognize the importance of the financial support
that Congress has provided airports and airlines throughout the
pandemic, including $8 billion in untapped airport grants stemming from
the American Relief Act, which became law in February. That money has
yet to be distributed by the FAA and will go a long way to support the
aviation ecosystem as we continue to climb out of the hole created by
COVID.
In closing, Southwest Airlines appreciates this Committee's
commitment to a thriving aviation sector and your recognition of the
importance of air travel. We thank you for the support you've provided
to both airports and airlines during this pandemic.
Thank you again for inviting me to testify. I'll await your
questions.
Senator Sinema. Thank you so much. Our third witness is
Paul Rinaldi, the 6th President of the National Air Traffic
Controllers Association. He served in this role since October
2009 and is currently serving a fourth term as NATCA's
President. In this position, he represents nearly 20,000
aviation safety professionals. Mr. Rinaldi, thank you for
joining us today. And you are recognized for your opening
statement.
STATEMENT OF PAUL RINALDI, PRESIDENT, NATIONAL AIR TRAFFIC
CONTROLLERS ASSOCIATION
Mr. Rinaldi. Good afternoon, Chair Sinema, Ranking Member
Cruz, and members of the Subcommittee. Thank you for the
opportunity to participate in this hearing on behalf of the
20,000 aviation safety professionals that NATCA represents.
Over the years, we have highlighted that a stop and go funding
stream negatively affects the national airspace system. It
undermines the Air Traffic Control Service's staffing, hiring,
training, and prevents timely implementation of a long term
modernization projects. It also negatively affects preventive
maintenance for the FAA's physical infrastructure.
As we were recovering from the long Government shutdown in
2019, we then faced the unthinkable, the COVID-19 pandemic. The
pandemic was devastating to aviation systems worldwide,
including here in this country and all the things I just
mentioned about stop and go funding. But over the last 16
months, the FAA and NATCA, through collaboration, have
accomplished some remarkable things to keep the frontline
workforce safe and the aviation system up and running during
this pandemic. Now, with a vaccinated workforce, traffic levels
are quickly returning to roughly 80 percent of pre-pandemic
levels.
So out of the chaos of COVID-19, we have this historic
opportunity to invest in our Nation's aviation system, both in
the physical infrastructure and technology, to ensure that the
United States remains the gold standard in aviation worldwide.
Airspace physical infrastructure is aging, and it is in
desperate need of attention. Our enroute centers are almost 60
years old. Many of our towers and TRACONs are in need of major
repairs and replacement. Many of these facilities have exceeded
their life expectancy.
Some of these facilities need critical replacement of
systems such as roofs, windows, HVAC systems, elevators, and
plumbing. For example, at Dallas Fort Worth International
Control Tower, there are several areas where the drywall is
crumbling and falling apart due to water leaks that have been
repaired for over the years. In the same facilities, several of
the restroom fixtures no longer work and are leaking. This
building frequently does not have hot water.
Additionally, the West Tower at Dallas Fort Worth has large
gaps in the foundation of the building, which allows rodents to
get into the building and nest. More examples at Phoenix Sky
Harbor Air Traffic Control Tower, the elevator fails more than
once per month, leading to frequent outages. Requiring
controllers to climb up over 20 flights of stairs to report for
duty in a tower cab is just completely unacceptable.
Additionally, at this facility, the countertops in the
operational area are falling apart.
The staff has improvised with the solution of duct tape and
pool noodles to cover sharp edges of the countertops to prevent
injury and clothing being torn. At Falcon Field in Mesa,
Arizona, this facility has a serious roof issue, an elevator
that is in disrepair because the parts are no longer made, has
an air conditioning heating problem, and ongoing plumbing
issues. These are just a few examples of the aging
infrastructure that is in desperate need of attention.
As far as technology infrastructure or next gen, NATCA has
collaborated with the FAA for over 12 years in modernizing and
making the system safer. We have many successes, and we
continue to anticipate to have many more. Moving forward in new
technology, our top priorities are maintaining and upgrading
our automation platforms, including ERAM for enroute, TAMRA for
terminals, ATOP which is our oceanic procedures.
Some of our other priorities is to find a replacement for
micro-EARTS systems, enhance our long range radar service, a
new voice communication system, and support tools in automation
and decisionmaking.
Again, I thank you for the opportunity to participate
today, and I look forward to your questions and a continued
dialog to improve the FAA's infrastructure.
[The prepared statement of Mr. Rinaldi follows:]
Prepared Statement of Paul Rinaldi, President, National Air Traffic
Controllers Association, AFL-CIO (NATCA)
Thank you for the opportunity to testify on behalf of the National
Air Traffic Controllers Association, AFL-CIO (NATCA) at today's hearing
titled ``Aviation Infrastructure for the 21st Century.'' NATCA is the
exclusive representative for nearly 20,000 employees, including the
Federal Aviation Administration's (FAA) air traffic controllers,
traffic management coordinators and specialists, flight service station
air traffic controllers, staff support specialists, engineers and
architects, and other aviation safety professionals, as well as
Department of Defense (DOD) and Federal Contract Tower (FCT) air
traffic controllers.
I. Executive Summary
As NATCA has been highlighting for years, a stop-and-go funding
stream negatively affects all aspects of our National Airspace System
(NAS). It undermines air traffic control services, staffing, long-term
modernization projects, preventative maintenance, and ongoing
modernization to the physical infrastructure. It also slows the hiring
and training process while preventing the timely implementation of
modernization programs and the integration of new users into the
system.
Without a stable, predictable funding stream, the FAA will be hard-
pressed to maintain pre-pandemic capacity, let alone modernize the
physical and technological infrastructure of the system while expanding
it for new users including unmanned aircraft systems, commercial space
launches, and supersonic aircraft. NATCA's testimony will focus on
NATCA's greatest priorities in the areas of physical infrastructure as
well as the modernization and technological needs of the system.
The FAA's physical infrastructure needs immediate attention and
upgrading our aging air traffic control (ATC) facility infrastructure
is a top priority for NATCA. The FAA's Air Route Traffic Control
Centers (ARTCC) are almost 60 years old, and many of the towers and
Terminal Radar Approach Control facilities (TRACONS) are in desperate
need of repair or replacement. Many of these facilities have exceeded
their life expectancy, while others need replacement of critical
physical infrastructure systems including roofs, windows, HVAC systems,
elevators, and plumbing.
In addition, NATCA and our front-line controller members have been
collaborating with the FAA to implement NextGen modernization programs
for the past 12 years. We have had many successes and we anticipate
many more. Our top priorities are to maintain and upgrade our
foundational air traffic automation platforms in our en route and
terminal facilities that deliver flight plan and surveillance
information to controllers on a real-time basis. Our other top
priorities include replacing the antiquated automation platform that
supports Alaska, Hawaii, Puerto Rico, and Guam as well as the continued
operability and future enhancement of long-range radar surveillance.
Our other technological modernization priorities are in the areas
of communications, notices to airmen, which disseminate critical safety
information to airspace users, support tools in automation, and traffic
management tools for existing users and new entrants including UAS and
commercial space.
We now have an historic opportunity to invest in our Nation's
aviation system, both its physical infrastructure and technology, to
ensure the NAS remains the gold standard around the world.
II. NATCA Urges Support for a Robust Funding Authorization for Air
Traffic Control Facility Infrastrucure
The FAA operates more than 300 air traffic control facilities of
varying ages and conditions all across the United States. The FAA's 20
Air Route Traffic Control Centers (ARTCCs) located in the continental
United States were built in the 1960s and are almost 60 years old. The
FAA's large, stand-alone Terminal Radar Approach Control facilities
(TRACONs) are, on average, more than 25 years old. In addition, the FAA
has 132 combined TRACON/Towers, which average about 35 years are old.
Finally, the FAA has another 131 stand-alone towers, which average more
than 30 years old. Many of these facilities have exceeded their life
expectancy. Please see the Appendix for a breakdown of the ages of the
FAA's air traffic facilities.
Many of these facilities have identifiable defects that require
immediate attention. These issues range from workplace safety issues to
airspace safety concerns. Some of these issues have led to periodic
airspace shutdowns and many others lead to health and safety concerns
for the workforce. When major systems fail or facilities have integrity
problems, it can lead to a less efficient airspace. Although the FAA
has begun the process of addressing its aging infrastructure through a
combination of realignments, sustaining and maintaining some
facilities, and replacing a handful of others, that process has been
slow and hampered by the stop-and-go funding stream.
NATCA believes that over one-third of FAA's facilities have only
minor concerns or no concerns. For the most part, these facilities need
only maintenance of their current physical infrastructure in order to
continue to provide a safe environment for the workforce and a
functional building to perform the FAA's mission.
However, on the other end of the spectrum, there are roughly 10
percent of facilities that are of our highest concern and another
approximately 20 percent of facilities that have major concerns
regarding overall facility condition. To this end, NATCA has identified
seven general areas of facility infrastructure needs across the FAA:
building integrity, HVAC conditions, restrooms, elevator/stairs,
building security, lighting, and OSHA issues.
1. Building Integrity
NATCA defines building integrity as the condition of the building's
roof, windows, doors, and ceiling. NATCA believes that over 25 percent
of all facilities have an immediate need regarding building integrity.
For example, at David Wayne Hooks Air Traffic Control Tower (ATCT,
DWH) near Houston, the tower cab roof has continued to leak water into
the inside of the tower cab windows for days after every significant
rainstorm. It is unknown where this water drains, but it goes into the
area under the consoles where the wiring is located. Since 2011, at
least five of the 12 tower cab windows have rivulets of water going
down them after moderate to heavy rainstorms. Further, the tower cab
infrastructure cannot support double shades for the windows. The
building is not secure against small pests and rodents. Multiple times
each year employees will encounter snakes, large spiders, and mice
inside the building. The tower cab roof access ladder is dangerous as
well.
At Falcon Field ATCT (FFZ), in Mesa, Ariz., the roof lifts off the
building when the wind is at or above 15 knots. The building shakes,
the floor vibrates, and controllers can hear the room moving.
At Peoria ATCT (PIA) in Illinois, when it rains, water leaks
through the ceilings and down the walls. Rainwater splashes over and
around the windows to the point that controllers use towels to absorb
it. Although the FAA has patched the roof, the water finds its way
inside. Almost every room and hallway in the basement shows signs of
water damage, including standing water in many locations. In the
basement, there is asbestos-laden piping insulation that has degraded
and crumbles from the ceiling. Electrical boxes and extension cords in
the basement needed for operation of the lights are exposed to standing
water and water leaks. Bird carcasses are not uncommon in a room
regularly used by employees. The roof of the mechanical room is
settling, creating gaps for water to find its way inside. Even after
roof patching and asbestos containment measures, more leaks have
developed on a floor with many sensitive electronics that are essential
for providing air traffic control services.
These types of building integrity issues are not limited to the
smaller air traffic facilities. For instance, at Newark Liberty
International Airport (EWR), there are leaks in the roof of the tower
and the main building. There are buckets in the hallways to catch the
water falling, which constitutes hazards for walking, the break room
windows leak, and sheetrock is crumbling.
2. HVAC Systems
NATCA defines HVAC systems as air conditioner, heater, and exhaust
vents. Approximately one-third of all facilities have significant HVAC
system issues. NATCA has identified roughly 30 facilities of the
highest concern for HVAC system condition and an additional 75 with
HVAC systems as a major concern.
For example, at Wilmington International Airport ATCT (ILM) in
Delaware, the HVAC unit breaks several times a year causing the
temperature inside the tower to rise to almost 90 degrees during the
summer and drop to the mid-50s in the winter. Even when operational,
the system fails to hold a consistent temperature, requiring
controllers to alternate between employing fans or multiple space
heaters, which pose their own hazards in the operational area.
At McClellan-Palomar ATCT (CRQ) in Carlsbad, Calif., the air
conditioner unit was recently replaced. However, jet fuel exhaust from
the fixed base operator at the base of the tower and the terminal ramp
enters the tower stairwell through the unprotected fire suppression
exhaust system. This fills the tower cab, offices in the tower, and
tower break rooms with the smell of jet fuel. Floating particulates
inside the tower cab often gather on the tower shades, creating
visibility issues. When employees or contractors attempt to clean the
shades, the particulates leave permanent scratches on the shades. The
air intake in the center of the tower cab is caked with dirt and
debris.
At Seattle-Tacoma International Airport ATCT (SEA), controllers in
the tower cab and on the 12th floor periodically experience headaches
and dizziness as a result of the strong smell of jet fuel.
3. Restroom Conditions
Restroom conditions include fixtures, stalls, door locks, and
plumbing. NATCA has the highest concern about restroom conditions at
more than 20 facilities. We consider about 50 facilities' restroom
conditions a major concern. Based on our observations, over 20 percent
of all facilities have serious issues regarding their restroom
conditions.
For example, at Buchanan Field ATCT (CCR) in Concord, Calif., there
is only one toilet. When testers arrive at the facility to perform
random drug and alcohol screenings of employees, the restroom is
unavailable for any other purposes for periods of approximately three
hours.
At Washington ARTCC (ZDC) in Leesburg, Va., there are consistent
plumbing issues. As a result of issues with the main plumbing stack
identified by a plumbing contractor, the men's restroom in one wing of
the building has the constant smell of sewage. The main women's
restroom in the facility has been closed several times because of the
similar sewage smell. Since at least 2006, the basement men's restroom
sinks clog regularly. Additionally, when the town of Leesburg had a
water main break in 2020, ZDC lost the use of all water and restrooms
for multiple days and restroom trailers were brought on site. Although
that issue was corrected, since then, ZDC's water pressure has
significantly decreased, causing additional plumbing issues.
At Jacksonville International Airport ATCT (JAX), there is sewage
smell in the main men's restroom at least once a month. The s-trap
dries up and allows the gas to back up into the restroom. The women's
primary restroom had a sewer backup earlier this year and flooded the
women's restroom with sewage. The tower cab restroom and tech ops
restroom have similar sewage smells.
4. Elevators/Stairs
NATCA defines elevator and stairs problems as those affecting
elevator panels, emergency phones, stair lighting, stair steps, and
head clearance. NATCA has identified nearly 20 facilities where either
elevators or stairs are of the highest concern. NATCA has identified
more than 40 additional facilities with elevators/stairs as a major
concern. Approximately 20 percent of facilities have significant issues
regarding their elevators or stairs.
For example, at Fayetteville Regional Airport ATCT (FAY) in North
Carolina, the elevator has never been operational.
At Memphis International Airport ATCT (MEM), like many towers,
there is a single elevator that accesses the tower cab. The elevator
breaks down frequently. Multiple employees have been trapped in the
elevator on different occasions. When the elevator is non-operational,
the only option is a long, 330-foot vertical climb up the stairs, which
is a particular problem in the summer because the stairs are not
climate controlled.
5. Building Security
NATCA has identified over 20 facilities for which we have the
highest concern for the building's security. We identified more than 40
additional facilities where building security is a major concern. Just
under approximately 20 percent of all facilities have significant
building security concerns.
For example, at Juneau International Airport ATCT (JNU) in Alaska,
the cipher lock system is provided by the city and it automatically
unlocks all of the doors in the event of a power outage. Additionally,
tower access is located in the main airport lobby area, outside of TSA
security, meaning anyone could come into the control tower. When
employees relayed their concern to the airport, they said that is by
design so they could use the control tower stairwell as a fire exit.
Additionally, the tower security camera fails often and the door
intercoms do not work well.
At General Mitchell International Airport (MKE), in Milwaukee, the
front gate to the employee parking lot malfunctions frequently. On many
occasions, the gate is left open and there have been several instances
of unauthorized vehicles driving into the lot, posing security
concerns.
6. Lighting
NATCA is aware of internal and external lighting condition issues
at several facilities. NATCA has identified three facilities where
lighting is at the highest concern level. We also have identified more
than 20 additional facilities in which lighting is a major concern.
Approximately 8 percent of facilities have significant lighting
concerns.
For example, at Dallas-Fort Worth International Airport ATCT (DFW),
NATCA identified lighting issues in the tower cab. DFW has focused
cannister lights for overhead lighting with shielding panels that
should be able to control both the intensity and coverage area for each
individual light. The placement of these cannister lights occurred when
the towers were built more than 25 years ago. Their placement was based
on the equipment and operational practices in use at that time.
A great deal has changed since then, but the lighting system and
associated issues have not. There are several areas where controllers
must supplement the lighting system with hand-held flashlights due to
the deficiencies in lighting coverage. The under-counter lighting has
similar issues, and is also prone to breaking due to the many space
heaters that get stored beneath the countertops as well as deficiencies
in the quality of installation. In the emergency stairwells, there are
frequent lighting outages due to inattention to required maintenance,
often resulting in a trip hazard due to the reduced visibility.
7. OSHA Concerns
NATCA defines OSHA concerns as including noise, water quality,
indoor air quality, and appropriate number of emergency exits. There
are approximately 25 facilities that NATCA has identified as having the
highest concern for OSHA issues. We identified more than 60 additional
facilities at which OSHA issues are a major concern. Approximately 30
percent of all facilities have significant OSHA concerns.
For example, at the Great Lakes Regional Office in Des Plaines,
Ill. the water has had high lead readings for three years requiring
employees to use bottled water for drinking.
At San Diego International Airport (SAN), approximately 10 years
ago, it was discovered that the drinking water was not potable. The FAA
has attempted various fixes over the years, but has been unsuccessful.
Today, the FAA is forced to provide hand sanitizer stations because the
water is not safe enough for hand washing, but the dishwasher and
showers are somehow considered acceptable. Drinking water is provided
via a bottled water contract, however the water dispensers are not
cleaned or tested regularly. And, these water bottles must be carried
up the tower steps by the controllers, leading to risk of injury.
At Pittsburgh International Airport ATCT (PIT), when there is heavy
precipitation, water leaks into the facility near electrical fixtures.
Ultimately, it pools on the floor creating multiple safety hazards.
Portions of the break room ceiling as well as restroom ceiling are
crumbling and falling near employees.
At El Paso International Airport ATCT (ELP) in Texas, there are
several occupational safety and health concerns. Several times in
recent years water lines to the tower cab have failed leaving
controllers without access to fresh, clean drinking water. The latest
occurrence was earlier this year and lasted for about two weeks. The
elevator is of equal concern. It has been failing at an alarming rate
over the past few years and has left multiple controllers stranded
inside of it for several hours. ELP has had to call the local fire
department and the contractor responsible for the maintenance and
repair of the elevator to help free stuck employees. The building
itself contains both friable and non-friable asbestos and there have
been several occurrences where work projects have been suspended upon
its discovery. A simple carpet installation was delayed for over 18
months due to finding non-friable asbestos in the mastic of the floor
tiles underneath the existing carpeting.
In summary, aviation is a critical part of our Nation's
infrastructure, and the repair or replacement of aging air traffic
control facilities will be essential to allow the United States to
maintain the safest, most efficient airspace system in the world. NATCA
strongly supports legislative efforts to bring air traffic control
facilities up to standard. President Biden has also called on Congress
to invest in upgrades to FAA assets to ensure safe and efficient air
travel and as part of his American Jobs Plan. Most recently, he
indicated his support for modernizing the air traffic control system in
his FY 2022 budget proposal. Providing additional funding for the
repair or replacement of aging air traffic control facilities will
result in more jobs for the American people and deliver benefits to our
struggling economy and the flying public alike.
III. Modernization and Maintenance of Key Programs and Platforms
Modernization to air traffic control technology also has been
hampered as a result of an unstable, unpredictable funding stream,
which has jeopardized the safety and efficiency of the NAS. To that
end, NATCA believes that the following platforms and programs are the
most critical to maintaining and upgrading the system. We have sorted
these platforms and programs into five tiers based on their
relationship and necessity to the continued safe and efficient
operation of the NAS.
1. Tier 1 Funding Priority--Automation Platforms and Surveillance
En Route Automation Modernization (ERAM), Terminal Automation
Modernization Replacement (TAMR), and Advanced Technologies & Oceanic
Procedures (ATOP) are all automation platforms that deliver flight plan
and surveillance information to air traffic controllers on a real-time
basis. These platforms are the foundational systems that keep our NAS
operating safely day and night. The FAA must be able to sustain and
upgrade each of these automation platforms. For instance, the base
equipment (hardware, monitors, and servers) used to operate ERAM will
reach its end of lifecycle (i.e., the manufacturer-determined date upon
which the equipment will need to be replaced based on its anticipated
use) by 2025 and NATCA is concerned with funding constraints that could
jeopardize the program. These systems operate 24 hours a day, 7 days a
week and, therefore, the hardware must be monitored and replaced at
scheduled intervals.
Microprocessor En-Route Automated Radar Tracking System (Micro-
EARTS) is the automation platform that supports Guam, Puerto Rico,
Hawaii, and Alaska. The FAA has identified the need to replace Micro-
EARTS with ERAM and/or TAMR. These replacement programs will improve
NAS interoperability and reduce cost by standardizing the training,
maintenance, and development efforts by bringing these facilities under
the NextGen automation umbrella.
Long-Range Radar services for both en route and terminal
environments remain critical to the safe and efficient operation of the
NAS. Even with the wide deployment of ADS-B Out, there is still a need
for non-cooperative surveillance tools such as Long-Range Radar
services, which allow controllers to see aircraft that are not ADS-B
Out equipped. These services are critical to controllers fulfilling
their safety functions.
2. Tier 2 Funding Priority--Communications
Voice over Internet Protocol Communications Enterprise (VoICE) is
the program and new equipment that will replace the aging (physical)
communications technology that controllers use to communicate with
pilots and other air traffic facilities. The current equipment is
outdated, is approaching end of lifecycle on multiple systems, and
replacement parts are getting harder to acquire because the existing
systems are no longer supported by their manufacturers.
Time Division Multiplexing (TDM)--to--Internet Protocol (IP) (TDM-
to-IP) is the program that will upgrade all copper wiring
infrastructure with fiber optic cable wiring. This program is critical
because major U.S. telecommunications carriers have communicated their
intention to discontinue current TDM-based services (supported by the
current copper wiring) as early as this year. The FAA is highly
dependent on these services to receive and transmit information at
approximately 6,000 sites. Any discontinuation or disruption of TDM
services without first transitioning to IP communication services would
lead to potential safety risks and/or delays in air traffic services.
Operational and Supportability Implementation System (OASIS II) is
a critical piece of the communications system that is used at all 17
Flight Service Stations (FSS) throughout Alaska. OASIS II must be
maintained until a replacement system can be implemented. OASIS II is
used by Flight Service Air Traffic Control Specialists in Alaska to
provide weather briefing and flight planning services to general
aviation pilots. However, OASIS II is beyond its end of lifecycle and
is beginning to experience system failures.
3. Tier 3 Funding Priority--NOTAMS
The Federal Notice to Airmen (NOTAM) System (FNS) provides critical
information to controllers and pilots about issues in the NAS, for
which timely knowledge of the issue is essential for personnel
concerned with flight operations. NOTAM modernization is an FAA Top 5
safety priority and requires appropriate funding levels to sustain and
upgrade the system.
4. Tier 4 Funding Priority--Support Tools in Automation
The legacy weather systems must be maintained until NextGen Weather
Processor (NWP) can be implemented. NWP is a program that will
consolidate multiple weather systems into one, while also incorporating
new weather products. The consolidated program will allow air traffic
managers to evaluate weather effects and plan initiatives.
Funding for legacy Information Display Systems must be maintained
until the Enterprise Information Display Systems (E-IDS) can be
deployed in approximately 2025-27. E-IDS will provide a wide variety of
information to air traffic controllers such as current weather,
airspace delegation, access to approach plates, NOTAMS, SIGMETS, flight
route verification and aircraft information. However, FAA facilities
currently utilize several different systems that are beyond the ``end
of lifecycle'' stage and replacement parts are becoming harder to
acquire.
5. Tier 5 Funding Priority--Decision Support Tools and Commercial Space
Operations
Traffic Flow Management System (TFMS), which is a strategic
planning tool for identifying and managing air traffic flow constraints
in NAS related to congestion in certain geographical areas, must be
maintained until a replacement system can be implemented. TFMS
processes all available data sources such as flight plan messages,
flight plan amendment messages, and departure and arrival messages.
TFMS identifies constraints such as a weather event or major sporting
event and helps the FAA plan for and execute that plan to minimize its
negative effects on the NAS. However, due to contractual issues related
to a recent court ruling that will limit new enhancements to the
system, TFMS will need to be replaced with a new system to ensure
minimal disruption to the NAS. Maintaining and upgrading TFMS will be
necessary to Commercial Space operations. By providing the FAA with
these critical decision support tools, the agency can minimize the
disruption to the NAS during the launch and scheduled re-entry of
Commercial Space vehicles, rather than segregating approximately 1,000
square miles of airspace with temporary flight restrictions for each
launch and recovery.
Funding must be maintained for the development, testing, and
deployment of Terminal Flight Data Manager (TFDM), which will provide
improvements to flight data coordination and management for air traffic
users, as well as enhanced surface traffic flow management
capabilities. Among other things, TFDM will replace ATCT paper
flight strips with electronic flight strips, provide automation for
electronic flight and airport data management, and interface with other
NAS systems to share electronic flight data. In order for TFDM to
deliver its proposed benefits for air traffic controllers and the
industry, the FAA must maintain the original list of facilities
scheduled to get electronic flight strips. NATCA is concerned that any
decreased functionality or reduction to that list of facilities may
affect the improvements that will be relied upon by other NAS systems.
IV. FAA Would Benefit from Reformed Procurement System
NATCA continues to urge Congress and the FAA to take a close look
at the FAA's procurement rules, which are fundamentally flawed in
regard to planning and funding for technology and modernization
programs, and to consider further procurement reform for the FAA.
Twenty-five years ago, the FAA Reauthorization Act of 1996 (Pub. L.
104-264) included procurement reform, which granted the FAA the
authority to create its own acquisition management system and adopt its
own procurement rules to allow the FAA to be more nimble in this area.
However, in practice, the FAA merely created a set of procurement rules
that mirror the rest of the Federal government, which defeated the
purpose of the reform.
V. Conclusion
NATCA believes that we must take this opportunity to secure the
critical funding necessary to maintain, repair, and replace the FAA's
ailing physical infrastructure, as well as to modernize the NAS to meet
both today's needs and those of the future. Without these investments,
the FAA will be hard-pressed to maintain pre-pandemic air traffic
capacity, let alone modernize the system or expand it for new users
such as UAS and commercial space operators.
NATCA thanks Chair Sinema and Ranking Member Cruz, as well as Chair
Cantwell and Ranking Member Wicker, for the opportunity to offer
testimony on these critical issues.
______
Appendix
Air Traffic Control Facility Age
FAA's Air Route Traffic Control Centers (ARTCCs)
----------------------------------------------------------------------------------------------------------------
Code Facility Name Age
----------------------------------------------------------------------------------------------------------------
ZAB Albuquerque Air Route Traffic Control Center 58
ZAN Anchorage Air Route Traffic Control Center 52
ZTL Atlanta Air Route Traffic Control Center 61
ZBW Boston Air Route Traffic Control Center 58
ZAU Chicago Air Route Traffic Control Center 59
ZOB Cleveland Air Route Traffic Control Center 60
ZDV Denver Air Route Traffic Control Center 59
ZFW Fort Worth Air Route Traffic Control Center 59
ZHU Houston Air Route Traffic Control Center 56
ZID Indianapolis Air Route Traffic Control Center 59
ZJX Jacksonville Air Route Traffic Control Center 60
ZKC Kansas City Air Route Traffic Control Center 59
ZME Memphis Air Route Traffic Control Center 59
ZMA Miami Air Route Traffic Control Center 65
ZMP Minneapolis Air Route Traffic Control Center 59
ZNY New York Air Route Traffic Control Center 58
ZLA Los Angeles Air Route Traffic Control Center 58
ZOA Oakland Air Route Traffic Control Center 61
ZLC Salt Lake Air Route Traffic Control Center 59
ZSE Seattle Air Route Traffic Control Center 59
ZDC Washington Air Route Traffic Control Center 58
----------------------------------------------------------------------------------------------------------------
Average Age: 58.9
----------------------------------------------------------------------------------------------------------------
FAA's Large TRACONs
----------------------------------------------------------------------------------------------------------------
Code Facility Name Age
----------------------------------------------------------------------------------------------------------------
A80 Atlanta TRACON 20
A90 Boston TRACON 17
C90Chicago TRACON 25
D10 Dallas--Ft Worth TRACON 25
D01 Denver TRACON 29
JCF High Desert TRACON 60
I90 Houston TRACON 8
N90 New York TRACON 43
NCT Northern California TRACON 19
P31 Pensacola TRACON 12
PCT Potomac TRACON 19
S46 Seattle TRACON 17
SCT Southern California TRACON 28
T75 St Louis TRACON 19
----------------------------------------------------------------------------------------------------------------
Average Age: 24.4
----------------------------------------------------------------------------------------------------------------
Core 30 Airport Towers and Tower/TRACONs
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
ATL Atlanta Tower 15
BWI Baltimore Tower 71
BOS Boston Tower 48
CLTCharlotte Tower 43
ORD Chicago O'Hare Tower 25
ORDA O'Hare North Tower 12
ORDB O'Hare South Tower 6
DFW Dallas Fort Worth Tower Center 47
DFWA Dallas Fort Worth Tower MA2 27
DFWB Dallas Fort Worth Tower MB2 27
DEN Denver Tower 26
DTW/D21 Detroit Tower & TRACON 29
IAD Dulles Tower 14
FLL Fort Lauderdale Tower 30
HNL Honolulu Tower 20
IAH Houston Intercontinental ATC Tower 24
JFK Kennedy Tower 27
LGA La Guardia Tower 11
LAS/L30 Las Vegas Tower & TRACON 5
LAX Los Angeles Tower 25
MEM/M03 Memphis Tower & TRACON 10
MIA Miami Tower 19
MDW Midway Tower 24
MSP/M98 Minneapolis Tower & TRACON 26
EWR Newark Tower 18
MCO Orlando Tower 19
PHL Philadelphia Tower 40
PHX/P50 Phoenix Tower & TRACON 14
SLC/SSalt Lake City Tower & TRACON 22
SAN San Diego Tower 25
SFO San Francisco Tower 5
SEA Seattle Tower 17
TPA Tampa Tower 49
DCA Washington National Tower 24
----------------------------------------------------------------------------------------------------------------
Average Age: 24.8
----------------------------------------------------------------------------------------------------------------
Remaining ATC Towers/TRACONs
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
ABI Abilene Tower 9
ADS Addison Tower 16
CAKAkron-Canton Tower 59
ALB Albany Tower 22
ABQ Albuquerque Tower 27
AGC Allegheny Tower 79
ABE Allentown Tower 26
AFW Alliance Tower 29
AMA Amarillo Tower 62
ANC/AAnchorage Tower & TRACON 46
ADW Andrews Tower 55
ARB Ann Arbor Tower 48
AVL Asheville Tower 40
ASE Aspen Tower 48
ACY Atlantic City Tower 34
AGS Augusta Tower 46
ARR Aurora Tower 45
AUS Austin Tower 23
BFL Bakersfield Tower 46
BGR Bangor Tower 25
BAD Barksdale RAPCON 53
BTR Baton Rouge Tower 39
BPT Beaumont Tower 17
BIL Billings Tower 15
BGM Binghamton Tower 70
BHM Birmingham Tower 20
BIS Bismarck Tower 48
BFI Boeing Tower 60
BOI Boise Tower 8
LOU Bowman Tower 58
POC Brackett Tower 56
BDL/Y90 Bradley Tower & TRACON 22
BJC Broomfield Tower 9
BUF Buffalo Tower 27
BUR Burbank Tower 30
BTV Burlington Tower 32
CDWCaldwell Tower 43
CMACamarillo Tower 30
CPRCasper Tower 67
CIDCedar Rapids Tower 40
APA Centennial Tower 36
F11 Central Florida TRACON 38
CMIChampaign Tower 61
CHSCharleston Tower (N.C.) 42
CRWCharleston Tower (WVa.) 74
CHAChattanooga Tower 39
PWK Chicago Executive Tower 24
CNOChino Tower 28
CVGCincinnati Tower 25
CKBClarksburg Tower 35
CLECleveland Tower 6
COSColorado Springs Tower 42
CAEColumbia Tower 53
CMHColumbus Tower (Ohio) 17
CSGColumbus Tower (Georgia) 30
CCRConcord Tower 60
CRPCorpus Christi Tower 19
MIC Crystal Tower 58
DAL Dallas Love Tower 29
DAY Dayton Tower 10
DAB Daytona Beach Tower 35
DVT Deer Valley Tower 14
PDK DeKalb--Peachtree Tower 33
DSM Des Moines Tower 46
MKC Downtown Tower (Kansas City) 34
CPSDowntown Tower (St. Louis) 13
DLH Duluth Tower 70
DPA Dupage Tower 24
EMT El Monte Tower 48
ELP El Paso Tower 54
ELM Elmira Tower 61
OMA Eppley Tower 46
ERI Erie Tower 64
EUG Eugene Tower 34
EVV Evansville Tower 45
FAI Fairbanks Tower 44
FFZ Falcon Tower 37
FAR Fargo Tower 42
FRG Farmingdale Tower 38
FAY Fayetteville Tower 48
FNTA Flint Tower 46
FLO Florence Tower 47
FCM Flying Cloud Tower 58
FXE Fort Lauderdale Executive Tower 7
RSW Fort Myers Tower 39
FSM Fort Smith Tower 22
FWA Fort Wayne Tower 14
FAT Fresno Tower 59
SEE Gillespie Tower 59
GCN Grand Canyon Tower 18
GFK Grand Forks Tower 34
GRR Grand Rapids Tower 57
MWH Grant County Tower 22
GTF Great Falls Tower 57
GRB Green Bay Tower 48
GSO Greensboro Tower 47
GSP Greer Tower 59
GPT Gulfport Tower 9
BED Hanscom Tower 18
MDT Harrisburg Intl Tower 32
HWD Hayward Tower 60
HLN Helena Tower 25
HIO Hillsboro Tower 55
ITO Hilo Tower 42
HOU Hobby Tower 21
HCF Honolulu CERAP 21
DWH Hooks Tower 42
HTS Huntington Tower 60
HSV Huntsville Tower 13
IND Indianapolis Tower 15
ISP Islip Tower 10
JAN Jackson Tower 58
JAX Jacksonville Tower 53
SNA John Wayne Tower 39
JNU Juneau Tower 35
AZO Kalamazoo Tower 7
MCI Kansas City Tower 25
TYS Knoxville Tower 35
LFT Lafayette Tower (Louisiana) 46
LAF Lafayette Tower (Indiana) 35
LCH Lake Charles Tower 60
NEW Lakefront Tower 34
LAN Lansing Tower 63
LEX Lexington Tower 52
LNK Lincoln Tower 48
LIT Little Rock Tower 20
LVK Livermore Tower 47
LGB Long Beach Tower 53
GGG Longview Tower 44
LBB Lubbock Tower 45
MSN Madison Tower 53
HEF Manassas Tower 29
MHT Manchester Tower 15
MFD Mansfield Tower 47
OGG Maui Tower 33
FTW Meacham Tower 56
NMM Meridian TRACON 60
MRI Merrill Tower 22
MAF Midland Tower 38
MKE Milwaukee Tower 35
MOB Mobile Tower 32
MSY Moiusantt Tower (New Orleans) 26
MLU Monroe Tower 26
MRY Monterey Tower 59
MYF Montgomery Tower (San Diego) 56
MGM Montgomery Tower (Alabama) 25
MMU Morristown Tower 61
MKG Muskegon Tower 54
MYR Myrtle Beach Tower 40
ACK Nantucket Tower 61
APC Napa Tower 57
BNA Nashville Tower 40
ORF Norfolk Tower 28
VGT North Las Vegas Tower 19
PNE Northeast Philadelphia Tower 48
OAK Oakland Tower 8
OKCA Oklahoma City Tower 54
R90 Omaha TRACON 56
ONT Ontario Tower 35
ORL Orlando Executive, FL ATCT Tower 27
PAE Paine Tower 18
PBI Palm Beach Tower 7
PSP Palm Springs Tower 8
PAO Palo Alto Tower 53
CRQPalomar Tower 48
PSC Pasco Tower 48
PHF Patrick Henry Tower 14
PNS Pensacola Tower 26
PIA Peoria Tower 62
PIT Pittsburgh Tower 36
PTK Pontiac Tower 24
PDX Portland Tower (Ore.) 23
PWM Portland Tower (Maine) 47
P80 Portland TRACON (Ore.) 63
POU Poughkeepsie Tower 48
PRC Prescott Tower 33
PVD Providence Tower 31
PUB Pueblo Tower 56
MLI Quad City Tower 47
RDU Raleigh-Durham Tower 34
RDG Reading Tower 55
RHV Reid-Hillview Tower 54
RNO Reno Tower 11
RIC Richmond Tower 17
RVS Riverside Tower 56
ROA Roanoke Tower 17
ROC Rochester Tower (N.Y.) 38
RST Rochester Tower (Minn.) 61
RFD Rockford Tower 63
ROWA Roswell Tower 23
SMF Sacramento Tower 54
MBS Saginaw Tower 56
SATA San Antonio Tower 35
SJC San Jose Tower 27
SJU San Juan Tower 26
SFB Sanford Tower 24
SBA Santa Barbara Tower 23
SMO Santa Monica Tower 55
SRQ Sarasota Tower 3
SAV Savannah Tower 16
SDL Scottsdale Tower 32
SHV Shreveport Tower 45
FSD Sioux Falls Tower 55
SUX Sioux Gateway Tower 29
STS Sonoma Tower 59
SBN South Bend Tower 41
SUS Spirit Tower 35
GEG Spokane Tower 14
SGF Springfield Tower 43
SPI Springfield Tower 41
STL St Louis Tower 22
FPR St Lucie Tower 30
STP St Paul Tower 22
PIE St Petersburg Tower 27
STT St Thomas Tower 37
SDF Standiford Tower 23
SCK Stockton Tower 64
SYR Syracuse Tower 22
TLH Tallahassee Tower 25
TMB Tamiami Tower 53
HUF Terre Haute/Hulman ATCT/TRACON 64
TEB Teterboro Tower 47
TOL Toledo Tower 66
TOA Torrance Tower 60
TVC Traverse City Tower 8
TRI Tri-Cities Tower 35
TUS Tucson Tower 4
U90 Tucson TRACON 41
TUL Tulsa Tower 63
TWF Twin Falls Tower 46
VNY Van Nuys Tower 54
VRB Vero Beach Tower 18
ACT Waco Tower 39
ALO Waterloo Tower 34
HPN Westchester Tower 52
ICT Wichita Tower 40
AVP Wilkes-Barre Tower 9
YIPA Willow Run Tower 34
ILM Wilmington Tower 34
ILG Wilmington Tower 20
YNG Youngstown Tower 51
----------------------------------------------------------------------------------------------------------------
Average Age: 38.1
----------------------------------------------------------------------------------------------------------------
Senator Sinema. Thank you so much. Now, before I introduce
our next witness, I would like to recognize our Ranking Member
of the Subcommittee, Senator Cruz. Senator Cruz, you are
recognized for your opening statement.
STATEMENT OF HON. TED CRUZ,
U.S. SENATOR FROM TEXAS
Senator Cruz. Thank you, Madam Chair. It is good to be with
you. Thank you for holding today's hearing on aviation
infrastructure for the 21st century. Over a year ago, we held
the first congressional hearing on the role of global aviation
in containing the spread of what was then a relatively new
infectious disease, COVID-19.
At that time, none of us could have imagined the ultimate
scope of this public health emergency, how quickly it would
snowball into a crisis, and the pain it would inflict upon the
United States, including our aviation system.
At the lowest point last year, barely 100,000 passengers
were flying each day, compared with over 2 million at the same
time the year before. To address the crisis at hand, Congress
acted quickly through the CARES Act to provide relief to the
nation, including the aviation sector, and to preserve millions
of jobs, and to ensure that when America got back up and
running, it could do so without delay. What a difference a year
makes.
Today, more than half of the U.S. population has received
at least one dose of COVID vaccine. More than 60 percent of
adults have received at least one dose. And more than 40
percent have been fully vaccinated. And it shows. Get on an
airplane going almost anywhere in the country, and it is highly
likely that the plane will be almost completely full, bookings
are up, losses are down, and airports have started to hum with
activity once again. This is good news and deserves to be
celebrated.
As welcomed as this light at the end of the tunnel is
though, we would be remiss if we walked away from this crisis
without learning several important lessons, especially as we
undertake discussions on an infrastructure package, something
the chair of this subcommittee is all too familiar with. As I
said back in April, during the first hearing of our
subcommittee, COVID showed us clearly just how important it is
that we are prepared to deal with a fast moving, far reaching
crisis, especially our aviation enterprise.
Now that we are rounding the corner on COVID, Government
and industry need to sit down and strategize about how we make
our aviation enterprise even more resilient across the board,
from carriers to concessionaires and air traffic control to
airports themselves. Although none of us could have predicted
how quickly COVID would devastate aviation, I very much believe
we will have missed an important opportunity to bolster our
aviation enterprise, making it more resilient and capable of
addressing an unforeseen crisis if we go about business as
usual once we are fully back to normal.
And the time is right to begin discussing how to do that in
earnest. With FAA authorization coming up for renewal in 2023,
we can and should really begin discussing how to best modernize
our aviation enterprise, including infrastructure, not just for
the next 5 years, but for the next 50. And I firmly believe
that no idea should be off the table in these discussions. For
too long, we have done things much the same way as we always
have, especially when it comes to how we pay for projects and
what our air traffic control system looks like.
And for too long we have just accepted that business as
usual is the only way things will get done. But I believe that
in the Nation that gave the world the first airplane and put
the first man on another celestial body, it is not too much to
think that we are capable of asking the tough questions,
challenging existing paradigms and coming up with bold and
creative solutions.
So I look forward to hearing the perspectives each of our
witnesses brings to today's hearings, as well as their ideas
for how we can move aviation in the United States into the
future. Thank you.
Senator Sinema. Thank you, Senator Cruz. Thank you for
joining today and thank you for your opening comments. I will
move now to our fourth witness. Our fourth witness is Dr.
Benjamin Miller, an economist at the Rand Corporation and a
professor at the Pardee Rand Graduate School. His research
includes the study on airport infrastructure funding and
financing mandated by Section 122 of the Federal Aviation
Administration Reauthorization Act of 2018. Dr. Miller, thank
you for your patience and thank you for joining us today. You
are recognized for your opening statement.
STATEMENT OF DR. BENJAMIN MILLER, THE RAND CORPORATION
Dr. Miller. Thank you. Good afternoon, Chair Sinema,
Ranking Member Cruz, and distinguished members of the
Committee. Thank you for inviting me to testify on the funding
and financing of infrastructure at our Nation's airports. In
the FAA Reauthorization Act of 2018, Congress directed the
Secretary of Transportation to engage an independent research
organization to make recommendations regarding the funding and
financing of infrastructure commercial service airports.
The FAA awarded the contract to conduct this study by the
Rand Corporation. The Rand Corporation is a nonprofit,
nonpartisan research institution and I lead this particular
study. The study was informed by a diverse panel of
stakeholders, including representatives from airports of all
sizes, as well as airlines, travelers, and other stakeholder
groups. We also analyzed data from the FAA, the Bureau of
Transportation Statistics, and other sources. My remarks today
are drawn from the study, which my team and I published in
January 2020. We made seven recommendations in our report.
I will focus my comments today on three of those
recommendations given their relevance and importance. Those
recommendations include, first, increasing the passenger
facility charge cap and indexing it to inflation. Second,
removing the automatic doubling of primary entitlements in the
airport improvement program. And third, establishing a rainy
day reserve for the airport and airways trust fund. Our first
recommendation is for Congress to increase the PFC cap and
index it to inflation. With the approval of the FAA, commercial
service airports concurrently applied to collect $4.50 from
each passenger boarding a plane, similar to drivers paying a
toll to use a highway.
The PFC is also a user fee that ensures airport
infrastructure is paid for by the individuals who use it. The
PFC does not currently adjust with inflation, so the value per
passenger has declined over time. We are not aware of any
compelling justification for a particular level for a new cap,
but if the PFC indexed to inflation when last updated in 2001,
it would be approximately $7.50 today. Regardless of what level
is selected, indexing the PFC cap to inflation is important for
ensuring that it remains a stable source of funds for airport
infrastructure in the long run.
Raising the PFC cap does not automatically increase
collections, but rather allows commercial service airports to
apply for permission to collect a higher PFC. If the cap is
raised, ticket prices for passengers will likely increase at
airports where applications for PFC collections are approved.
Overall, we found that disagreements around whether to increase
the PFC cap came down to differences of opinion regarding the
urgency of pending infrastructure projects. We found that while
the most critical projects will likely be built eventually,
increasing the PFC cap will enable airports to complete
essential projects sooner and at lower cost.
We also found that existing guardrails are sufficient and
effective in requiring airports to demonstrate that the
benefits of PFC funded projects justify increase in
collections. For these reasons, we recommend increasing the PFC
cap. Our second recommendation is that Congress should move the
automatic doubling of primary entitlements in the airport
improvement program. Under current law, whenever Congress
appropriates at least $3.2 billion to the AIP, primary
entitlements per passenger double. This decreases the amount of
money available for other AIP funds, including discretionary
grants.
As a consequence of this policy, annual AIP funding has
spread across all primary airports according to their
employments, and the FAA has less discretion to effectively
direct funds to current high priority projects in specific
airports. This discretion is important because the expensive
and long term nature of infrastructure investments means that
well-timed but less frequent large grants may be of more
practical use than station small grants, particularly for
smaller airports.
Our third recommendation is that Congress establish a rainy
day fund to serve as a backstop within the Airport and Airways
Trust Fund. The AATF is funded by taxes and fees related to air
travel and is used to fund the AIP and many other FAA programs.
A rainy day fund of approximately $4 to $6 billion would be
valuable for ensuring that AATF outflows remain stable through
common downturns such as recessions or other periods of low air
travel.
Such a backstop may be particularly important as the
diminished trust fund is reestablished after having been drawn
down considerably during the pandemic. These changes in policy,
along with other recommendations detailed in our report, could
help make airports--could help airports make the infrastructure
investments needed to better position themselves for the
future.
Thank you for inviting me to testify, and I am happy to
answer any questions.
[The prepared statement of Dr. Miller follows:]
Prepared Statement of Benjamin M. Miller\1\--The RAND Corporation\2\
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\1\ The opinions and conclusions expressed in this testimony are
the author's alone and should not be interpreted as representing those
of the RAND Corporation or any of the sponsors of its research.
\2\ The RAND Corporation is a research organization that develops
solutions to public policy challenges to help make communities
throughout the world safer and more secure, healthier and more
prosperous. RAND is nonprofit, nonpartisan, and committed to the public
interest. RAND's mission is enabled through its core values of quality
and objectivity and its commitment to integrity and ethical behavior.
RAND subjects its research publications to a robust and exacting
quality-assurance process; avoids financial and other conflicts of
interest through staff training, project screening, and a policy of
mandatory disclosure; and pursues transparency through the open
publication of research findings and recommendations, disclosure of the
source of funding of published research, and policies to ensure
intellectual independence. This testimony is not a research
publication, but witnesses affiliated with RAND routinely draw on
relevant research conducted in the organization.
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Funding and Financing Infrastructure at U.S. Airports: Overview of the
2020 RAND Report Recommendations
Good afternoon, Chairwoman Sinema, Ranking Member Cruz, and
distinguished members of the subcommittee. Thank you for inviting me to
testify on the funding and financing of infrastructure at our Nation's
airports. Billions of dollars are spent every year on infrastructure at
U.S. airports; aviation connects our country by moving millions of
people and hundreds of millions of pounds of cargo every day. In the
Federal Aviation Administration (FAA) Reauthorization Act of 2018,
Congress directed the Secretary of Transportation to engage an
independent research organization to consider issues concerning the
status of airport infrastructure and issues of funding and finance at
commercial service airports.\3\ The FAA awarded the contract to RAND to
conduct this study. My remarks today are drawn from our study,
published in January 2020.\4\ I will focus my discussion on
highlighting how needs, available resources, and the impacts of the
coronavirus pandemic differ across airports of different types and
sizes. Our recommendations, which I detail below, include increasing
the Passenger Facility Charge (PFC) cap and indexing it to inflation,
removing the automatic doubling of Airport Improvement Program (AIP)
entitlements, and establishing a rainy day reserve for the Airport and
Airway Trust Fund (AATF).
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\3\ Per Section 122 of the Federal Aviation Administration
Reauthorization Act of 2018 (Pub. L. 115-254).
\4\ Benjamin M. Miller, Debra Knopman, Liisa Ecola, Brian Phillips,
Moon Kim, Nathaniel Edenfield, Daniel Schwam, and Diogo Prosdocimi,
U.S. Airport Infrastructure Funding and Financing: Issues and Policy
Options Pursuant to Section 122 of the 2018 Federal Aviation
Administration Reauthorization Act, Santa Monica, Calif.: RAND
Corporation, RR-3175-FAA, 2020 (https://www.rand.org/pubs/
research_reports/RR3175.html).
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The Nation's Airports
There are more than 19,000 landing areas within the United States
of varying size and type, 5,099 of which are considered public-use
airports.\5\ The FAA includes 3,321 public-use airports in the National
Plan of Integrated Airport Systems (NPIAS), which is an FAA-managed
plan to develop an integrated system of public-use airports and
identify priorities for Federal airport infrastructure funding.
Notably, an airport must be included in the NPIAS to receive Federal
grants.
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\5\ FAA, National Plan of Integrated Airport Systems (NPIAS): 2019-
2023, Washington, D.C., 2018. A public-use airport is defined as
publicly owned, privately owned but designated by the FAA as a
``reliever'' for congestion at commercial service airports, or
privately owned but having scheduled service and at least 2,500 annual
enplanements. Enplanements is the industry's term for the number of
passengers boarding aircraft at an airport.
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Almost all commercial service airports in the United States are
publicly owned. Large-, medium-, and small-hub airports served 96
percent of commercial passenger traffic in 2018. However, the vast
majority of airports in the NPIAS are general aviation (GA) airports,
which do not focus on commercial transportation of passengers. GA
airports serve a wide variety of users (typically, small noncommercial
transport of people, cargo, or mail); support emergency preparedness
and response, local economic activity, and access for local or remote
areas; and provide a safety net for the National Airspace System.\6\
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\6\ FAA, ``Interim Guidance on Land Uses Within a Runway Protection
Zone,'' memorandum to Regional Airports Division Managers, 610 Branch
Managers, 620 Branch Managers, and ADO Managers, September 27, 2012.
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Types of Airport-Related Infrastructure
Airport infrastructure is typically distinguished by the categories
of airside and landside. Airside infrastructure includes runways,
taxiways, aprons, aircraft gates, barriers, lighting, and other
facilities necessary for aircraft operation. Landside infrastructure
includes airport terminals, parking lots and garages, transportation
access roads and rails, rental car facilities, baggage facilities, and
other facilities for processing passengers, cargo, and ground
transportation. Airports reported spending $12.8 billion on capital
projects for these sorts of infrastructure in 2017 alone. Although not
a focus of our study, air traffic control (ATC) infrastructure includes
towers and other vital facilities, which are not owned and operated by
airports, and not all of which are located on airport property.\7\
---------------------------------------------------------------------------
\7\ Congressional staff made clear to RAND that the Section 122
study was not intended to address the infrastructure needs of the more
than 300 ATC facilities operated by the FAA and for that reason was not
included within the scope of the study.
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Areas Where Infrastructure Investment Is Needed
Airport runways are generally in good repair. This reflects the
priority given to airside infrastructure in Federal grants provided
under the AIP and the effectiveness of funding from all sources to meet
airside needs. However, terminals and control towers are widely viewed
as needing modernization, repair, or replacement. The growth in the
number of enplanements led to crowded terminals at some airports prior
to the pandemic, and many aging control towers and other ATC facilities
require rehabilitation and upgrading. Smaller airports, which are
reliant on Federal grants, struggle to generate sufficient revenues for
spending on landside infrastructure for ground transportation vehicles,
the processing of passengers, and other purposes.
These infrastructure limitations are one of several factors
contributing to delays in the National Airspace System that were
evident before the pandemic. These infrastructure-related delays are
not spread evenly across the system. Rather, a small number of
capacity-constrained airports appeared to be responsible for the
majority of delays that could be partially (but not fully) addressed by
sound infrastructure investment. Twenty airports (19 large hubs and one
reliever) accounted for 96 percent of delays measured by the FAA's
Operations Network in 2018.
Funding Sources Vary with Airport Sizes
Although airports across the Nation face many of the same
challenges, the financial capabilities and local context of each
airport can vary widely. Airports of all sizes face a broadly similar
distribution of operating expenses, nonoperating expenses, and capital
expenses. However, the funding sources used to finance these expenses
differ depending on the airport's size, as shown in Figure 1. Further,
how financial risks are distributed between airports and airlines
depends on the particulars of use-and-lease agreements between
individual airports and their tenant airlines. Airports also entered
the pandemic with widely varying amounts of cash reserves, airline
competition, and infrastructure-related delays.
The difference in the proportion of AIP grants and PFC funds by
airport size is particularly noteworthy, as these are the two funding
sources most directly affected by Federal policy. Larger airports
generally choose to forgo a large portion of their AIP entitlements in
order to collect additional PFC funds. This is because their larger
passenger volumes cause the revenue collected from PFCs to easily
exceed the forgone AIP entitlements. In contrast, smaller airports
often perceive the potential revenue from PFCs to be too small to
justify the administrative costs of applying.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SOURCE: ``Certification Activity Tracking System (CATS),'' webpage,
undated (https://cats.airports.faa.gov).
362 airports were collecting PFCs as of August 2019, including 98
of the Nation's largest 100 airports. As shown in Table 1, the vast
majority of these airports collect the maximum allowable fee of $4.50
per flight segment.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SOURCE: FAA, ``Key Passenger Facility Charge Statistics,'' May 31,
2019.
NOTE: Data are as of August 31, 2019; the number of airports in
each hub-size category is from FAA, ``Voluntary Airport Low Emissions
Program (VALE),'' webpage, updated November 13, 2018 (https://
www.faa.gov/airports/environmental/vale/).
Smaller airports by definition have a smaller user base that offers
fewer opportunities for raising revenue and are therefore more reliant
on Federal (and to a much lesser extent, state) grants than larger
airports for paying the high fixed costs related to runways, taxiways,
aprons, safety, and security. GA airports are not eligible to collect
PFCs, a mechanism that Congress authorized exclusively for use by
commercial service airports, nor do GA airports have sufficient
passenger volume to support such a user fee. Instead, GA and nonprimary
commercial service airports rely on AIP funding, which is
redistributive by design; smaller airports receive a larger share of
AIP dollars than they generate in excise tax revenues to the Airport
and Airway Trust Fund (AATF), which funds the AIP and many other FAA
programs.
The Pandemic and Its Impact on Demand for Air Travel
Prior to the coronavirus pandemic, the demand for air travel was
steadily increasing, leading to questions about whether the flow of
funds supporting airport infrastructure was sufficient to keep pace
with the growing demands placed on airport infrastructure. The severity
and duration of the reduction in demand for commercial passenger air
travel caused by the coronavirus pandemic was unprecedented, even in
comparison to past disruptions, such as the September 11 attacks, which
were previously considered by the industry to represent a worst-case
scenario. The Airports Council International-North America forecasts
that U.S. airports will lose $23.3 billion in revenues as a result of
the COVID-19 pandemic.\8\ At least four regional airlines collapsed,\9\
and airports in dozens of small cities lost almost all commercial
passenger air service because the remaining demand for passenger air
travel was no longer sufficient to support regularly scheduled
service.\10\
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\8\ Airports Council International-North America, ``Economic Impact
of Coronavirus on U.S. Commercial Airports,'' fact sheet, April 29,
2020 (https://airportscouncil.org/resource/economic-impact-of-
coronavirus-on-u-s-commercial-airports/).
\9\ Justin Bachman, ``Another Regional Airline Falls to the Covid-
19 Recession,'' Bloomberg, August 4, 2020 (https://www.bloomberg.com/
news/articles/2020-08-04/another-regional-u-s-airline-falls-to-the-
covid-19-recession).
\10\ Ian Duncan, ``American Airlines to Cut Service to 15 Cities
Once Terms on Billions in Pandemic Aid Expire,'' Washington Post,
August 20, 2020; Peter Buffo and Sandra Jones, ``Grounded: Some Cities
Lost More Than Half Their Flights amid COVID-19,'' WAGM, March 29,
2021.
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Passenger Service
Passenger volumes have been recovering very slowly after bottoming
out, with approximately 95 percent fewer passengers in April 2020 than
in April 2019, as shown in Figure 2. This decline in passenger traffic
was experienced by airports of all sizes. As of mid-June 2021, demand
reached approximately 70 percent of 2019 levels. Recent trends appear
to point to domestic passenger counts returning to 2019 levels within
the next year, although international travel may take longer. As
passenger travel resumes its previously forecasted growth, the question
of sufficiency of funding will reemerge.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SOURCE: Transportation Security Administration, ``TSA Checkpoint
Travel Numbers (Current Year(S) Versus Prior Year/Same Weekday),''
webpage, last updated June 17, 2021 (https://www.tsa.gov/coronavirus/
passenger-throughput).
NOTE: Both lines show seven-day rolling averages. The orange line
shows the average number of passengers on the corresponding date in
2019.
Cargo
The quantity of cargo being flown across the country reached record
highs during the pandemic.\11\ Demand for air transportation of cargo
spiked in May 2020, as shown in Figure 3.
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\11\ Our report in response to Section 122 of the FAA
Reauthorization Act of 2018, focused on commercial passenger service
rather than cargo. However, understanding the pandemic's impact on
cargo is important for understanding how the pandemic's impact varies
across different types of airports.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SOURCE: Bureau of Transportation Statistics, ``Air Cargo Summary
Data (All): October 2002-March 2021,'' webpage, undated (https://
www.transtats.bts.gov/freight.asp).
The Impacts of the Pandemic Have Varied Across Airports
The pandemic has been devastating for airports of all sizes, just
as it has been for airlines and all industries involved in air travel.
The increase in cargo is not a substitute for the revenue lost from the
decline in passengers. Because different types of airports may focus on
serving different customers, the rate at which the number of flights is
returning to prepandemic levels varies across airports of different
types. Figure 4 shows that smaller airports, where a larger fraction of
flights are cargo, have returned to their prepandemic number of flights
more quickly than larger airports, which typically focus on commercial
passengers. However, even if an airport were to replace lost passenger
flights with cargo flights, that might not fully replace lost revenue
from such sources as parking garages and terminal leases.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: FAA, ``The Operations Network (OPSNET),'' database, undated
(https://aspm.faa.gov/opsnet/sys/main.asp)
Recommendations
Since our report was published in January 2020, the pandemic has
severely disrupted air travel. Demand for air travel will--eventually--
return to previous levels and previous rates of growth. When that
happens, the same infrastructure funding issues will reappear. For this
testimony, the study team reviewed our recommendations in light of the
pandemic's impacts and considered whether changes were warranted. We
concluded that, despite the coronavirus pandemic, our recommendations
remain sound and require little modification.
Changes to the PFC Program
The PFC is a federally authorized user fee paid by passengers at
the time of ticket purchase and remitted to the airport at which the
passenger boards a plane. With the approval of the FAA, an airport can
choose to collect up to $4.50 from each passenger boarding a plane,
similar to drivers paying a toll to use a highway. Congress determines
the maximum allowable fee per passenger boarding; an airport may apply
to collect that amount or a lower fee. The vast majority of these
airports collect the maximum allowable fee of $4.50 per flight segment.
There is an ongoing debate over whether the maximum allowable PFC
should be increased above $4.50, the amount it has been since April
2001, when the cap increase included in the 2000 FAA reauthorization
took effect.
The PFC does not currently adjust with inflation, so the value per
passenger has declined over time. The total amount of PFC funds
collected has increased over time due to three factors: (1) an increase
in the number of airports that impose a PFC, (2) an increase in the
average PFC charged by these airports, and (3) an increase in
enplanements. At the same time, increases in enplanements and
operations also increase demands on infrastructure.
Airport sponsors cannot unilaterally impose a PFC. Rather, they
must apply to the FAA to request approval to collect a PFC.\12\ The
application must identify specific PFC-eligible projects that the
collected funds will support, as well as provide other documentation.
During the application process, airport sponsors must consult with air
carriers and submit formal responses to any formal comments made by air
carriers or other members of the public.
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\12\ The application process is detailed in FAA Order 5500.1, and
the instructions for preparing a PFC application are available on the
FAA's website. See FAA Order 5500.1, Passenger Facility Charge,
Washington, D.C.: Federal Aviation Administration, August 9, 2001; FAA,
``Instructions for Preparing Attachments for PFC Application Form:
Section 6 of FAA Form 5500-1,'' undated.
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PFC revenues are attractive to airports because they can be used
for a wider range of projects than can AIP grants, and they can also be
used to pay for debt service and financing costs.
Congress Should Increase--but Not Remove--the PFC Cap and Index It to
Inflation
This option will improve airports' ability to make timely and
efficient capital investments to meet growing future demand while
leaving in place FAA oversight of project justification and costs on
passengers.
Specifically, we recommend that Congress
raise the current PFC cap of $4.50 to approximately $7.50
for origin passengers only
index the new PFC cap to inflation
eliminate 100 percent of AIP primary entitlements for
medium-and large-hub airports that choose to raise their PFC
above $4.50.
We are not aware of compelling evidence or data justifying a
particular level for a new cap. Any number could be chosen, but we note
that if the $4.50 cap had been indexed to inflation in 2000 using the
Producer Price Index for construction materials, it would now be set at
$7.44. For this reason, we suggest that the cap in this option be
around this value, perhaps rounded up to $7.50, although other levels
could be chosen. Although an increase in the PFC cap would likely
result in higher ticket prices for passengers traveling through
airports that raised their PFC collections, there remains in place a
set of guardrails to weigh the public benefits of PFC-funded projects
relative to the costs imposed on passengers. Airports will continue to
be required to justify the net benefits of projects proposed for PFC
funding to the FAA, and the FAA retains its discretion to approve or
disapprove applications for these projects. Further, airports will
still need to be responsive to comments from airlines and other
stakeholders when requesting a PFC increase.
To ensure that airports have sufficient and stable sources of
revenue commensurate with present and future capital needs, the PFC cap
should be indexed to inflation, regardless of whether the PFC cap is
otherwise changed. Indexing the PFC to a construction index, such as
the Producer Price Index for construction materials, would stabilize
the parity of purchasing power at the current cap or a new cap set by
Congress for airports making infrastructure investments. In contrast,
indexing to the Consumer Price Index would hold constant the impact of
PFC increases on passenger ticket prices.
Not all airports may choose to seek an immediate or longer-term PFC
increase. To increase transparency regarding the intentions of airports
in maintaining cash reserves beyond those required by bond-rating
agencies, we suggest that the FAA consider an airport's cash reserves
and broader financial status when determining whether to approve an
airport's request for an increase in its PFC. Prior to the coronavirus
pandemic, there was significant variation in airports' levels of cash
reserves.
We further recommend that large-and medium-hub airports that raise
their PFC above $4.50, indexed to inflation, should forgo their AIP
primary entitlements, dollar for dollar, for each dollar of PFCs they
collect up to 100 percent of these entitlements. Instead, that money
could more efficiently achieve the redistributive purpose of the AIP
program by either being focused on needs of national significance among
smaller airports or directed to other priorities affecting the safety
and sustainability of the National Airspace System. Airports that raise
their PFC above $4.50 would remain eligible for other categories of AIP
funding, including discretionary grants and cargo entitlements.
We recommend that any increase in the PFC cap apply only to
passengers who originate at that airport and that the PFC for layover
passengers remain capped at $4.50, indexed to inflation. The rationale
for restricting future PFC increases to origin passengers only is to
ensure that airports that increase their PFCs do so at their own
expense, rather than at the expense of other airports. Under current
law, passengers with one or more layovers must pay two PFCs, one to the
origin airport and one to the first layover airport. If an airport's
PFC increase applies to layover passengers, demand for flights that
have layovers at that airport would decrease. This would be
particularly problematic for small airports, where almost all routes go
through one or two larger ``feeder'' airports to connect the community
to the national and international system. Because origin passengers
represent the majority of passengers at most airports, and because
layover passengers can still be charged PFCs at currently approved
rates, all commercial service airports would still receive a meaningful
increase in their ability to raise revenue through PFCs.
Implications of the Pandemic
The need to increase the PFC and index to inflation remains--
indeed, the need is greater, if anything. Airports have $16.6 billion
in debt service payments to make over the next two years,\13\ much of
which was to be paid with PFC funds collected over that time. With
passenger volumes down, those PFC funds will be far less than
anticipated. Because revenue from other funding sources, such as retail
and parking, is also down, many airports will need to draw on PFC
revenues from future years to pay off debts. However, many airports
have already borrowed against PFCs that will be collected decades into
the future and hence may have limited ability to obtain additional PFC
funds. This will delay airports' ability to finance future
infrastructure projects.
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\13\ Airports Council International-North America, 2020.
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That said, it is unclear whether airports would make immediate use
of a PFC increase in today's environment. Keeping costs down has been a
focus of both industry and policy responses to COVID-19, with the hope
of luring back travelers. As explained above, raising the PFC cap does
not directly raise PFCs--it simply provides airports the option to
apply for permission to raise their PFC at the appropriate time.
Changes to the AIP
AIP grants represent the largest, most direct involvement of the
Federal government in funding airport infrastructure. AIP grants are
funded by the AATF, a Federal trust fund that receives excise tax
revenues from passenger and cargo travel and fuel purchases and that is
used exclusively to fund aviation-related activities. The annual AIP
funding appropriation limitation is set by Congress. AIP grants are
distributed to public-use airports listed in the NPIAS via a complex
set of apportionment formulas and percentage set-asides.
There are two general types of AIP grants: entitlements and
discretionary. The FAA uses discretionary grants to target specific
projects at individual airports according to need and benefit to the
system as a whole. The FAA awards entitlement grants to most airports
in the NPIAS, although airports that receive approval for PFC-funded
projects forgo a portion of their entitlement. Under current
congressionally mandated funding formulas, GA and nonprimary commercial
service airports are each eligible to receive entitlement grants of up
to $150,000 per year, an amount too small to support airport
construction of any consequence. Airports, however, are permitted to
defer their annual entitlements over several years to accumulate
sufficient funds to undertake a project.
Importantly, large-and medium-hub airports forgo a portion of their
primary entitlements if they impose a PFC. Virtually all of them choose
to do so because their passenger volumes ensure that revenue collected
from PFCs dwarfs forgone AIP entitlements. Large and medium hubs that
charge a PFC of $3 or less forgo AIP apportionments equal to 50 percent
of their projected PFC revenues for the year, up to 50 percent of their
primary apportionment, while those that charge a PFC of more than $3
forgo an amount equal to 75 percent of projected PFC revenues, up to 75
percent of their primary apportionment.\14\ By statute, 87.5 percent of
these forgone AIP entitlements go to the Small Airport Fund,\15\ while
the remaining 12.5 percent are available as discretionary funds.\16\
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\14\ 49 U.S.C. Sec. 47114.
\15\ Funds in the Small Airport Fund are awarded competitively to
specific categories of small airports.
\16\ 49 U.S.C. Sec. 47116.
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Congress Should Remove the Automatic Doubling of AIP Primary
Entitlements
Under current law, whenever Congress appropriates at least $3.2
billion to the AIP, primary entitlements per passenger double (subject
to a cap), with those increases resulting in less money available for
other AIP funds, including discretionary grants. As a consequence of
this policy, annual AIP funding is spread across all primary airports
according to their enplanements, and the FAA has less discretion to
effectively direct funds to current high-priority projects at specific
airports.
In our report, we recommend that Congress remove the triggered
primary entitlement increase that occurs when Congress appropriates at
least at $3.2 billion to the AIP. Those airports not voluntarily
forgoing AIP entitlements in return for the ability to collect PFCs
could still receive comparable levels of AIP funding over time, but the
timing and magnitude of annual grants would be better aligned with the
timing and magnitude of needs. Airports could compete to receive more
funds in the form of larger grants from the pool of discretionary
funding, when needed, but would receive fewer guaranteed funds in the
form of annual entitlements.
Congress Should Consider Removing Nonprimary Entitlements
As with primary entitlements, under current law, whenever Congress
appropriates at least $3.2 billion to the AIP, each nonprimary airport
in the NPIAS receives an entitlement of up to $150,000 instead of those
funds going to more-flexible state apportionments for nonprimary
airports. This amount is insufficient for major construction projects,
and the existing state apportionment mechanism is better suited to meet
nonprimary airports' needs and has sufficient oversight mechanisms in
place. We recommend that Congress eliminate nonprimary entitlements
that occur under current law when the AIP appropriation is at least
$3.2 billion. As with the previous recommendation, airports could still
compete to receive comparable levels of funding over time, but the
timing and magnitude of individual distributions would be better
aligned with the timing and magnitude of needs.
It is important to emphasize that the purpose of removing
nonprimary entitlements is to reconfigure how nonprimary airports are
supported and not to reduce overall support for nonprimary airports.
These changes--combined with the PFC reforms that would increase the
amount of forgone AIP primary entitlements going to the Small Airport
Fund--would ensure that nonprimary airports have access to more
resources when they are needed.
Changes to the AATF
Congress Should Establish a Rainy Day Reserve Fund to Serve as a
Backstop for the AATF
Prior to the pandemic, we had suggested that Congress use what had
been a large uncommitted balance in the AATF to establish a rainy day
fund to support the air travel industry in the event of unusually low
air travel. A few months after we published our report, the pandemic
caused an unprecedented decline in demand, and Congress reacted to the
decline by temporarily waiving the taxes associated with air travel.
This change eliminated the flow of revenues to the AATF, thereby
draining the funding source for many FAA programs.
Now that the flow of funds to the AATF has resumed, the AATF will
likely replenish, albeit slowly. Establishing a rainy day fund remains
a sound idea to ensure that funding levels for FAA programs and
activities can remain stable over time as the fund replenishes. Our
report had estimated that a rainy day fund containing $4 billion to $6
billion would be sufficient to ensure that AATF outflows would remain
stable even in the face of two to three years of severe revenue
shortfalls. Although such a rainy day fund would not be sufficient to
provide stability during disruptions of the magnitude of the current
pandemic, we continue to believe that it would be sufficient to provide
stability in the face of two to three years of severe revenue
shortfalls, as might occur in a severe recession. Once the AATF is
fully funded and a rainy day fund is in place, any additional AATF
revenues should be appropriated to meet clearly identified needs, as
determined by the FAA.
Congress Should Include Ancillary Fees in the Domestic Passenger Ticket
Tax
Ancillary fees are charges for airline-provided services or
products that some airlines sell separately from tickets, such as
checked baggage, advance seat assignments, and priority boarding. These
fees are excluded from the 7.5 percent Domestic Passenger Ticket Tax
that helps fund the AATF. This policy favors airlines that separate
ancillary fees from their base ticket price over those that do not.
Airlines should be free to separate ancillary fees if they wish, but
the Domestic Passenger Ticket Tax should not incentivize one business
model over another by taxing ancillary services differently from
bundled ticket prices.
Conclusions
In our analysis, we concluded that sufficient guardrails are in
place within the PFC program and the marketplace to prevent airports
from making inappropriate use of PFC revenues. The PFC program
represents a near-ideal example of the user-pays principle of
infrastructure funding and has proved to be a valuable source of
revenues for medium and large airports. Paired with a healthy market
for airport bond issues, PFCs help provide airports with access to the
capital they need to keep up with changing and growing demands. Smaller
airports could also gain from changes that improve the flexibility and
timeliness of AIP grants. Such changes could enable small airports to
access funds at the time they are needed to serve their communities.
Finally, Congress has an opportunity to make some changes in the AATF
to make it even more resilient to future shocks and provide assurances
of sustainability to the airport sector for years to come.
Before the pandemic, the airport sector was generally healthy and
poised for continued growth. In the coming months and years, airports
will regain their passenger volumes. In the meantime, changes in policy
could help airports make the investments needed to better position
themselves for the future.
Senator Sinema. Thank you so much. And our fifth witness, I
would like to invite Senator Cruz to introduce Sean Donohue.
Senator Cruz, are you still with us? Oh, you are. Great. I turn
over to you to introduce our final witness.
Senator Cruz. Thank you, Madam Chair. I would like to
introduce Sean Donohue. Sean currently serves as Chief
Executive Officer of Dallas Fort Worth International Airport, a
role that he has held since October 2013. Prior to this, he
served as the Chief Operating Officer for Virgin Australia
Airlines, where he led the day to day operations for
Australia's second largest air carrier, and in a variety of
executive roles at United Airlines that included operations,
sales, and commercial startups.
In his role as CEO of DFW, the fourth busiest airport in
the world, Mr. Donohue is responsible for the management,
operation, and future strategy and development of the airport.
He manages an organization with 1,800 employees and an annual
operating budget of $800 million, as well as a $3 billion
capital improvement program, which produces more than $37
billion in annual economic impact for the Dallas Fort Worth
region, hosting pre-COVID around 64 million customers each
year.
Mr. Donohue graduated from Boston College with a Bachelor
of Science degree in Marketing and Economics, and he is married
with five children. And although he is a native of
Massachusetts, he has certainly made Texas his home.
STATEMENT OF SEAN DONOHUE, CEO, DALLAS FORT WORTH INTERNATIONAL
AIRPORT
Mr. Donohue. Good afternoon and thank you, Chair Sinema, a
special thanks to Ranking Member Cruz for your kind comments,
and also greetings to the members of the Subcommittee. Thank
you for the invitation to discuss our perspective on aviation
infrastructure. Senator Sinema, I just wanted to comment, I
hope you have had a chance to meet the new Director of Aviation
in Phoenix Airport, Chad McClosky. Chad spent the last 4 years
at DFW, and along with Danette, the state has two excellent
aviation leaders at your largest airports in Arizona.
Before I begin my remarks on infrastructure, I want to
express my gratitude to Congress for the tremendous support of
the aviation sector during the pandemic crisis. In my 35 plus
years in the industry, this is by far the most consequential
financial support airports, airlines, and importantly airport
business partners such as small, women, and minority owned
concessionaires have ever witnessed. My sincere thanks. At DFW,
we realized we have been fortunate compared to some of our
other airport colleagues in weathering the impact of COVID-19.
While we saw our revenues drop by over $200 million just in
the last 6 months of last year, we have recently seen a faster
recovery and forecast our 2021 summer traffic to be 85 to 90
percent [technical problem.]--2019. We also made the deliberate
decision to proceed with a handful of key infrastructure
projects during the pandemic. One of them was the
reconstruction of one of our main arrival runways, which was
funded in part by AIP funding. This effort, along with a few
other key projects, created over 4,000 new jobs during the
pandemic. I note these projects to highlight, while DFW Airport
plays a critical role in the U.S. aviation system, we also had
the responsibility, as Senator Cruz highlighted, of being a $37
billion annual economic engine for North Texas that supports
over a quarter of a million jobs.
As it relates to airports and our dual aviation and
economic driver roles, infrastructure remains our biggest
challenge and we are pleased that airports are included as part
of the national infrastructure discussions. As has been
highlighted, U.S. airports have over $100 billion in
infrastructure needs over the next several years. Why is that
number so large? First and stating the obvious, we have very
old airports in the United States. Take DFW, we are nearly 50
years old, and we are the second youngest large airport in the
country.
And we need to be realistic. There are very few
opportunities for Greenfield airport projects in the U.S. Like
Denver Airport, the last one, which, by the way, is now 25
years old. Coupled with growing traffic, which I believe all of
us on this call, in this discussion would agree is going to
return, our aging airports will primarily require projects that
reconstruct older facilities. Those type of projects are more
expensive, and they take considerably more time than Greenfield
projects.
Having spent the majority of my career working for
airlines, I am very sensitive to the needs of the airlines as
they recover from the greatest financial shock in modern
aviation history. Despite the significant support of Congress,
the airline balance sheets have been severely impacted. Since
airlines ultimately pay for the majority of airport
infrastructure projects through fees and charges,
understandably, I would suggest we are looking at a lost decade
of airport infrastructure support from many of our airline
partners, hence the criticality of airports being considered in
the current infrastructure discussions.
I commend the Senators working on various infrastructure
proposals related to airports. All U.S. airports, regardless of
size, are critical to the ecosystem of aviation. I am confident
every Member of Congress, whether they begin their travels from
a small, midsized, or large airports, understand the importance
of airports--understand the importance airports bring to the
economies of their state.
Thank you very much for the opportunity to join the
discussion today and I will be glad to take any questions.
[The prepared statement of Mr. Donohue follows:]
Prepared Statement of Sean Donohue, Chief Executive Officer,
Dallas Fort Worth International Airport
Chair Sinema, Ranking Member Cruz, and members of the subcommittee,
Thank you for the invitation to join today to discuss our
perspective on aviation infrastructure at Dallas Fort Worth
International Airport (DFW).
I've served as Chief Executive Officer of DFW since late 2013 where
I am responsible for the management, operation and future strategy and
development of the Airport. I am a member of the U.S. Travel Gateway
Airports Committee and sit on the Executive Committees of the World
Travel & Tourism Council and the Dallas Regional Chamber. I previously
spent over 25 years working for U.S. and global airlines.
About Dallas Fort Worth International Airport
DFW covers more than 26.9 square miles of North Texas. We have
2,000 direct airport employees and over 60,000 total on-airport
employees through airlines, concessionaires, vendors, and other
partners. The aviation ecosystem in north Texas is one of the largest
and most robust in the nation, home to American Airlines, Southwest
Airlines, Bell Helicopter, Boeing Aviall, Sabre, and more.
DFW operates 7 runways and 164 gates throughout 5 terminals. In
calendar year 2020, DFW ranked 4th in the world for passengers and 2nd
in North America. DFW produces over $37 billion in economic impact each
year. DFW is the second largest economic engine in the Texas behind the
Port of Houston.
DFW's role as a leading international cargo operations and
logistics hub is critical to the North Texas economy. DFW's total cargo
throughput is nearly 1 million U.S. tons per year.
COVID-19's impact on travel significantly reduced revenues from
airlines and passengers for the last two Fiscal Years from which we
expect a full recovery not to occur until 2023. DFW and the airport
industry are grateful for the three COVID relief packages Congress
passed. DFW has used and will use the funds primarily to stabilize our
balance sheet and provide relief for our concessionaire and airline
partners. The Federal relief funds allowed us to balance our finances
so that we did not have to pass on incremental costs to our airline
partners, who were also deeply impacted by the pandemic. DFW also
reduced its budget by over $90 million after the pandemic hit. But,
even before the COVID-19 tragedy struck the world, DFW and other
airports across the United States were already playing catch up in the
race to modernize our aging infrastructure.
Modernizing aging infrastructure to manage existing capabilities
DFW is nearly 50-years old. Much of our existing infrastructure has
reached the end of its useful life and requires rehabilitation and
replacement. DFW faces the challenge of balancing the priorities of
modernizing existing infrastructure capabilities while making the
necessary investments for future travel demands. We must plan for
expansion as we are operating in one of the fastest growing urban areas
in the United States.
We placed approximately $100 million in capital projects on hold
for an estimated 18 months. Further adjusting to COVID's effect on the
economy and travel, DFW extended our 10-year Capital Improvement
Program (CIP) to 15 years to reduce the capital expenditure in the near
term while aviation activity recovers. This program focuses
specifically on aging infrastructure rehabilitation and replacement.
Previously DFW had renovated three of its four original terminals that
were built in the early 1970s.
DFW is currently planning the renovation of the fourth original
Terminal C plus the addition of 9 additional gates for growth in the
Central Terminal Area (CTA). In addition, our access roads, bridges,
and utility systems are 50 years old and in need of replacement. DFW's
total capital investment needs over the next decade is in excess of $6
billion, with nearly 90 percent of those dollars being slated for
infrastructure repairs and replacement alone.
On a positive note, we were able to accelerate some projects due to
the period of lower airport utilization, such as the recently completed
reconstruction of Runway 18R/36L as this is a critical piece of
infrastructure for the entire National Airspace System. DFW was able to
create and preserve jobs at the height of the pandemic by following
through on the project. It was made possible in part through an AIP
letter of intent from the FAA. In the past 14 months of the pandemic,
DFW was able to complete 42 Capital Projects amounting to over $500
million in capital expenditures. We're proud to share that this work
created 4,348 new jobs during a difficult economic environment.
Investing for growth and future travel demands of the 21st century
The travel industry is beginning to see the initial signs of
recovery and we must be ready to welcome travelers. COVID forced DFW to
suspend construction of a new 24-gate Terminal F and associated
infrastructure due to uncertainty around future passenger growth and
the financial impact to the airlines. The pandemic's impact on the
construction of Terminal F puts DFW behind the growth curve as travel
demand rapidly returns. Delaying construction of a new terminal
challenged us to adjust planning and reorganize activity to be prepared
for when travel demand returns to pre-COVID levels. However, the 9-gate
expansion of the Central Terminal Area will not be enough to meet the
demands of future travel.
Our post-COVID adjusted 15-year Capital Improvement Program
includes--45 percent airfield, 30 percent roads and bridges, and 25
percent facilities projects. All of the Capital Improvement Projects
are critical infrastructure projects as the DFW Capital Improvement
Program is based on condition assessments conducted by professional
firms and just in time delivery of assets rehabilitation. The team at
DFW is focused on developing shovel-ready projects to create
opportunities should additional funds become available. We accelerated
the design and required environmental documentation for key airfields,
roadways, and facilities infrastructure projects. This planning will
facilitate project opportunities that can stimulate job creation in the
North Texas regional economy as we serve travelers.
Another facet of our project development at DFW is to look for ways
to achieve our Net Zero Carbon by 2030 goal. DFW is the largest carbon
airport in the world. DFW integrates sustainability principles into all
aspects of operations, planning, and development. A key component of
our Net Zero Carbon by 2030 goal is a $170M electric central utility
plan that would replace our aging utility plan and transition DFW's
primary heating fuel source from natural gas to renewable electricity.
The project will further reduce our carbon and ozone emissions and
decrease water use annually as well as provide operating cost savings.
Our DFW team is creative and leans forward with planning and
development. However, the current AIP program is not sufficient to put
a dent in our Capital Improvement Program and there are limitations on
eligible projects for AIP funds. The only option we have is to issue
bonds to finance these projects which are repaid through higher airline
charges.
Bringing Airport Infrastructure into the 21st Century
The industry appreciates the committee, as well as your colleagues
in the House, working with us to find solutions to meet the needs of
providing world-class domestic and international business and leisure
travel.
I would like to thank the Chair and Ranking Member along with
Senator Young for introducing the Expedited Delivery of Airport
Infrastructure Act last week. We have been supportive of the companion
bill in the House and encourage passage in the Senate. I commend the
Senators working on the various infrastructure proposals being
discussed for recognizing the ongoing need of airports. As we in the
aviation industry work to address our infrastructure challenges ahead,
money directed toward airports would be put to good use at DFW and at
other airports across the country on meaningful and necessary
infrastructure projects.
Airports of all sizes and locations are a critical ecosystem of
travel moving passengers and cargo throughout America and beyond our
borders. Every Member of Congress, whether they begin their travels at
a small, mid-sized, or larger airport in their state, understands the
importance airports bring to the economy of their state.
Thank you for the opportunity today and I look forward to your
questions.
Senator Sinema. Thank you so much. I will first start by
recognizing myself for 5 minutes of questions. Ms. Bewley,
thank you for being here and for your work at the Tucson
Airport Authority. In your testimony, you discussed the
airfield safety enhancement project underway at the Tucson
International Airport, the largest infrastructure project ever
at your airport.
The project has many benefits. It will improve safety,
increase efficiency, support the Arizona Air National Guard
mission, and also create jobs. How can Congress best support
important safety projects like the ASE project in Tucson?
Ms. Bewley. Thank you for the question, Senator Sinema. The
help that we need at Tucson International Airport and other
airports across the Nation really is with a reliable funding
source and funding stream that isn't disconnected between
Federal Fiscal Years. As Sean Donohue mentioned, that if you
have a large project, it would be wonderful and effective if
the funding source matched the size of that project, and that
the funding operated at the speed of the project, so the
project doesn't have to slow down because of Federal funding
streams. We can be very efficient.
Airports operate as business enterprises, and we are very
good at what we do. And the last thing we want to do is slow a
project down. So anything that we can do to improve the Federal
funding source, the Federal funding stream, would allow us to
be more efficient and effective. And as you mentioned, the
Tucson ASE project has wonderful benefits for air carriers, our
general aviation users, and the military, all important assets
to our regional economy and to our Nation's economy.
Senator Sinema. Thank you so much. My next question is for
Mr. Rinaldi. The Phoenix Mesa Gateway Airport is in the process
of replacing its 50 year old tower. It is too short and has a
cab that is too small to keep up with the growth of the
airport. The new tower will be 65 feet taller, will have twice
the space, and will provide unobstructed views for air traffic
controllers. In your testimony, you discussed the age of our
air traffic control physical infrastructure. Can you explain
how outdated towers make it harder for your members to do their
jobs?
Mr. Rinaldi. Thank you, Chair Sinema. Absolutely. Listen, I
think that when you have to walk up 20 flights of stairs to
report to duty in a tower cab, and hopefully you didn't forget
anything because then you have to go back down and get your
headset or your lunch, you are winded and you are already
sweating, and hopefully the HVAC system works. And we are
having problems with air conditioning throughout our
facilities. But I think air traffic control is a very high,
intense-focused occupation.
We don't like distractions in our operation and our aging
infrastructure is a distraction in our operation which can
impede safety. So we really have to focus on getting our
facilities up to speed, getting them healthy, making them the
type of facilities that people want to come to work and not
worry about ripping their clothes or cutting their hands
because the countertops have sharp edges on them and, you know,
they are ripping their hands up as they are moving across,
moving paper strips from one position to the other.
Senator Sinema. Thanks. My next question is for Mr. Cullen.
Mr. Cullen, most air travelers think about their experience in
the terminal when they think about aviation infrastructure. So
how do air carriers such as Southwest partner with airports to
help improve terminals? And what recommendations do you offer
for how Congress can best support those terminal projects?
Mr. Cullen. So yes, we generally work with airports'
various committees, and in addition to talking about capacity
growth, we talk about what the customer experience looks like.
Just talking on the--talking about Southwest looks at the
customer experience, we really go in and look at net promoter
score to the entire customer experience, be it at the airport,
online, or in the air. And that really allows us to clue into
where we have got areas of opportunity.
I think looking forward to what post pandemic experience
looks like at the airport, I think we have a proven record, at
least we point back to 9/11 and the improvements that were
required for TSA checkpoints and then security, the investments
that were made over the years following 9/11 in essentially
every airport. So I think we are standing by, ready to see what
those future investments may look like.
Senator Sinema. Thank you so much. Now, my time has
expired. So I now recognize the Subcommittee's Ranking Member,
Senator Cruz, for his 5 minutes.
Senator Cruz. Thank you, Madam Chair. Mr. Cullen, I want to
start with you. As you are aware, for the entirety of my tenure
in the Senate, I have been blunt about my position on passenger
facility charges, PFCs. That they are a tax on consumers, and
if raised, they will inhibit increased air travel.
I notice that in your written testimony, you stated that
Southwest strongly believes that, ``increased taxes and fees on
passengers does the most harm to price sensitive customers and
to smaller markets, such as many of the 18 new airports we have
added or announced since the pandemic began.'' Can you please
go into more detail on why, in your judgment, an increase in
the PFC would be bad for consumers and would inhibit air
travel?
Mr. Cullen. Absolutely. So the PFC, as we look at it, has
to be included in the price that we advertised, and we put on
our website to sell. So any increase of that is a direct
increase to the fare that a customer has to pay. Now that is
point one. Point two, if you look at many of the new airports
that we serve, many of them are smaller and just by their
nature don't have the same amount of destinations offered.
So therefore, it is a requirement that many of them have to
connect--customers have to connect over markets. So they
actually have to double dip in the PFC pool just to pay the
original--the market where they originate and also where they
connect. So that really is a form of double taxation.
Senator Cruz. OK, and knowing your position of PFC
increases, I am also interested to know what the alternative
for funding would be if the cap on PFCs is not increased, and
if additional funding doesn't come from PFC,s where would
additional revenue come from?
Mr. Cullen. Absolutely. So the cap on PFCs has been in
place from the early aughts and at $4.50. However, since that
time, over the 20 years, we have actually seen PSC collections
increase 137 percent. So from $1.6 billion to well over $3
billion. The--however, if you look at AIP funding, that was
really held constant. It was $3.3 billion 20 years ago, it is
still there today. So I would argue that is one place where we
have not kept up with demand and with inflationary increases.
Senator Cruz. And what should the role of private capital
and private activity bonds be in terms of airport and other
aviation infrastructure?
Mr. Cullen. Well, at Southwest, we have had some nice
success in terms of taking the private approach and us at
Southwest Airlines leading on projects. We have seen that going
back years ago in Dallas Love Field and in Houston Hobby. We
are currently underway in LAX. And I think we have got a great
model there where we have proven we can deliver projects on
time and well below budget.
Senator Cruz. OK, and now this question is for Ms. Bewley,
Mr. Donohue, and Dr. Miller. I understand that that airport
funding was thrown into chaos by the lack of air traffic due to
the pandemic. But right now, airports seem to be fairly flush
with COVID relief money. I continue to believe that increasing
the cap on PFCs will only drive demand away from airports and
inhibit air travel.
In fact, Dr. Miller, in your testimony, you acknowledge
that, ``an increase in the PFC cap would likely result in
higher ticket prices for passengers.'' In your judgment, should
we be concerned about raising prices on consumers and reducing
demand for air travel, number one? And number two, if Congress
does not raise PFCs, what alternative revenue sources are there
for the infrastructure improvements we need in airports?
Dr. Miller. This is Dr. Miller. I can go ahead and dive in
on the first part of that question. We agree in our report that
an increase in the PFC is likely to raise [technical
problems.]--at the airports that [technical problems.]--
increased PFC collections. Now, our view is that at the present
moment, demand is around 70 to 80 percent of where it was in
2019.
And this increase in demand is at this point driven more by
pandemic related concerns [technical problems.]--concerns.
There is a fairly large literature on how increases in prices
will affect consumer demand, and that certainly is an impact of
that. However, we view the net benefits of increased
collections to exceed the cost of it.
Senator Cruz. Ms. Bewley, Mr. Donohue?
Ms. Bewley. Senator Cruz, thank you for the opportunity to
speak with you today. You mentioned the Federal relief funds
that airports have received. And thank you so much for that. It
has been a godsend. And where the funds are being primarily
used at my airport system and possibly throughout the Nation is
to support payroll. And right now we have got almost several
million dollars of employee costs that we are supporting. Both
the CARES Act, the CRRSAA, and now ARPA are going to take us a
little bit further into the future, which we greatly
appreciate.
But when we are looking at aging infrastructure to the tune
of tens of billions of dollars, up to over $100 billion
dollars, it is very difficult to then use that money for the
projects when we still have the operation to manage and
maintain. The PFC has been discussed for almost 20 years, as
long as I can remember, and having it indexed to inflation
shouldn't be a shock to the system. I think it is interesting
that a PFC can create havoc on an airfare, but baggage fees
don't.
So I think that we should find a happy medium where the
airlines can get what they need, the airports can get what they
need, and certainly be sensitive to what the passengers needs
are.
Senator Cruz. Mr. Donohue.
Mr. Donohue. Senator, a couple of answers to your
questions. Number one, when it comes to airport funding, the
CARES Act funding was a tremendous support mechanism for DFW
because our revenues dropped so dramatically. Early on in the
pandemic, I made the decision, told our employees no one would
be furloughed, no one would see a reduction in compensation or
benefits. And we also were able to support our concessionaires
to the tune of tens of millions of dollars by waiving their
rent. So not only it helped the airport, it helped our
employees and helped our business partners.
And as it relates to future funding, in my humble opinion,
there is no single solution. We would love to be part of the
infrastructure bill discussions moving forward. As it relates
to PFCs, because they have not been indexed, we have lost 40
percent of the value of the PFCs. AIP will continue to be an
important funding mechanism.
And we do need to recognize as airports, we do know
airlines will continue even during these difficult times in
some airports to invest. And airports need to invest as well.
And at DFW over the last five years, we have invested our own
capital into projects. So in my opinion, we have to look at
this holistically. Everyone needs to come to the table, to your
point, with ideas. And we have to look at a macro solution.
Senator Cruz. Thank you very much.
Senator Sinema. Thank you, Senator Cruz. I now recognize
Senator Rosen for 5 minutes of questions.
STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. Thank you, Chair Sinema. Of course, Ranking
Member Cruz. That is a really important hearing you are having
today. Appreciate all the witnesses, of course, for being here.
And but we sure have to revive our travel and tourism economy
because in Nevada, travel and tourism are essential to our
economy. And our airports serve as a gateway to the Silver
State, my state, for millions of domestic and international
travelers. In 2019, Las Vegas McCarran International Airport
saw over 50 million passengers.
We generated nearly $35 billion dollars in economic output
and supported approximately a quarter of a million jobs. The
Reno Tahoe International Airport saw a passenger increase of
almost 6 percent in 2019, which was the fifth consecutive
increase in year over year passenger growth. In short, our
airports are growing. But the pandemic created steep declines
in passenger traffic-related revenues, which exacerbated
existing airport infrastructure needs and funding challenges.
So as the pandemic winds down in the United States and
Congress takes up infrastructure legislation, funding for
airports needs to be a few things, needs to be long term, needs
to be dependable, and in order to promote certainty and allow
for large capital projects and investments.
So Ms. Bewley and Mr. Donohue, how can Congress ensure that
the investments we make in aviation infrastructure help revive
the travel and tourism industry that was devastated by the
pandemic, particularly excuse me, the projects that enhance the
traveler experience? Excuse me, I will take a drink. Ms.
Bewley, you can go first, please.
Ms. Bewley. Thank you. Senator Rosen. The Federal funding
stream for projects can be used for improvements to outdated
terminal facilities, upgrading HVAC filtration. At our airport
alone, we could only upgrade to a certain level because the age
of the system and we are very limited. So in order for us to
even have a higher grade HVAC filter like hospitals, we would
have to rip out our systems and start over. We have an aging
facility that maybe only has 20 years of life left in it if we
are lucky and we are probably going to need to expand our gates
and our hold room.
So upgrading those systems are really important. This also
supports the airlines because we can improve the gates, we can
add space, we can build space for concessions, which then
brings us the opportunity to enhance our revenue stream and
outreach even further into the community to bring businesses
into the airport so they, too, can take advantage of the
opportunity of being around travelers. So those are just a few
things that we can do.
On the airfield, the infrastructure out there--most
airports are very old. Our airport is probably 50, 60 years old
as far as our terminal, excuse me, our airfield. So the
upgrades that we are talking about in our airfield safety
enhancement program are going to take us far, far, far into the
future. And those are good investments. And as far as making
sure that the money is being used appropriately, well, if it is
being funded through an FAA source, you know, they are the
guardians of the AIP funds.
They are our connection to all of you who help supply the
funds. So we would certainly follow the same processes that we
always do to make sure the project is eligible under safety,
security, customer service, you name it. And following all the
grant assurances that we always do.
Senator Rosen. So, and Mr. Donohue, how can we revive
travel and tourism and make sure that the customer experience--
how do we enhance that traveler experience while reviving our
tourism and travel industry?
Mr. Donohue. Thank you, Senator Rosen. And probably one of
the examples that goes to your point is during the pandemic, we
continued with a project at DFW were added gates to our
international terminal. We just opened those gates in the last
60 days and that has significantly helped us as the travel has
recovered.
It has provided the necessary relief for the airlines, and
at the same time has increased the customer experience because
we were able to incorporate new technology to improve the
customer's experience through the terminal. I would also say
that, you know, when you think of airports and you look at
infrastructure investment, we typically go to terminals and
terminals are critical. And they are critical to handle the
volumes. They are critical to have that customer experience
that you mentioned. But infrastructure at our airports is
starting to get old.
And at DFW as I said, we are coming on 50 years. We have
130 bridges at DFW airport. We have 1,200 lane miles of road
landside on our airport. And then when you look at all the
airfield projects we do, many of those go to the heart of
everything we are concerned about on this call, which is safe
and secure operations.
So believe me when it comes to how we spend money at
airports, yes, the customer experience is critical, but the
infrastructure also goes to the heart of a safe and secure
aviation system in this country.
Senator Rosen. Well, I sure would agree with you there. And
I am going to submit a couple questions for the record on how
we--what Congress can do to support our airport personnel, our
airline employees, air traffic controllers as we recover from
COVID thinking about their safety and security as well. Thank
you, Madam Chair.
Senator Sinema. Thank you so much, Senator Rosen. Senator
Rosen, we actually don't have another Senator in the queue. If
you would like, I can extend a few minutes for you to continue
asking questions.
Senator Rosen. Oh, well, that would be--that would be
really great, because, you know, I just want to finish. You
know, I am grateful to be the Chairwoman of the Tourism, Trade
and Export Promotion Subcommittee, part of Commerce. And so
this really goes hand in hand with the Aviation Subcommittee.
And as we think about coming out of COVID and the investments
that we have an opportunity to make that will pay off in the
long run, we know that the airports in 2019, I am sure you
spoke about this, faced more than $128 billion in new
infrastructure needs, having a burden of nearly $100 billion.
And so our airport operators are just struggling and really not
able to keep up pace with growing demand. And so there is a
long way to go.
So, Ms. Bewley, we provided our Nation with a lot of
support during COVID. And how are the airports using this--and
we are talking a little bit--as you have been talking about
critical infrastructure, I would say that being able to get
there on the roads, being able to cross the bridges, the
parking garages, all of that infrastructure that goes around,
having the proper air traffic control towers, things we might
not see but do benefit us all.
What do we also--what also do we need to do so we don't
fall behind since we were right behind before COVID?
Ms. Bewley. Senator Rosen, ACI North America released a
report last summer that outlined about $115 billion in
infrastructure needs over the next 5 years across the national
airport system. And, you know, I think there is a lot to be
gained from that study. And I think we all agree safety is
always a top priority. And when you come to an airport, you
want to be safe, you want to be secure, you want to have a
customer experience, you want the infrastructure to be healthy
and support the activity, and provide a great atmosphere for
everyone, including the airlines. So all of that is very
important.
And with the aging infrastructure in these outdated
terminals, there is a lot of behind the scenes that probably
isn't so pretty. I think Mr. Rinaldi mentioned that some of the
towers are aging and crumbling. That is true. We have an aging
tower at our small little airport at Ryan Airfield. It is a
contract tower. It is not high priority, but it is just as
important as another tower.
So I think infrastructure really needs to be looked at
across many levels, crossing all sorts of avenues that we can
find the best way to use the limited resources and support the
national aviation system for the benefit of everyone.
Senator Rosen. I think we make these investments are going
to create jobs. There is going to be a big economic benefit to
all of that. And as well as not just the people we move, but we
move a lot of cargo at many of these airports. And I do have
one last question, if I may, Madam Chair, to Mr. Miller.
Based on Rand's report, we are talking about, of course,
DFW, Tucson, they are bigger cities, but we have, of course,
Nevada, we have a lot of rural airports all across this
country. There is the smaller airports, the rural airports. And
what do we have to do to make sure that they don't get left
behind as some of the bigger, more populated terminals and of
course, in the larger cities with more volume, take up a lot of
that funding.
Dr. Miller. Thank you, Senator Rosen. The smaller airports
in some ways have a vastly different experience than the larger
airports, and in some ways they are facing some of the same
struggles around dealing with the pandemic. The most important
thing that we want to emphasize in this study regarding the
differences between the airports is their sources of funding.
The larger airports because they have such a larger number
of travelers flowing through them, are able to make much more
use of funding sources like the passenger facility charge. The
smaller airports, particularly noncommercial service airports
that just don't focus on conserving a large number of
commercial passengers, something like the passenger facility
charge is unavailable to them or doesn't make sense for their
number of passengers. So smaller airports are much more reliant
on Federal grants, such as the AIP program.
Senator Rosen. Thank you, I appreciate that, because our
smaller airports, our rural airports are really important to
those communities. Particularly we have a lot of places in
Nevada that are great to go, but during wildfire season, they
also host helicopters or other kinds of planes that need to
land there, firefighters, supplies. So it is really important
that we don't leave rural America behind. Thank you, Madam
Chair. I really appreciate the extra time.
Senator Sinema. Absolutely. Thank you so much, Senator
Rosen. We don't have any additional Senators in the queue to
speak. But I will follow up with a question for both Ms. Bewley
and Mr. Donohue. I just reintroduced, along with Senator Young
and Senator Cruz, the Expedited Delivery of Airport
Infrastructure Act.
Our bipartisan legislation would allow airports to use
airport improvement program funds to incentivize contractors to
finish airport construction projects ahead of schedule. Do you
believe that this flexibility with AIP funding can help build
infrastructure projects more efficiently at your airports?
Mr. Donohue. Yes, Senator. I will give you an example. The
main arrival runway that we reconstructed during the pandemic,
we did that for two reasons. Number one, we knew we had reduced
operations, and if you are going to shut a runway, that is the
time to do it. But we also did it because we were able to
expedite the project and we saved over $10 million doing the
project.
And if we had had the ability to incentivize the
contractors in this case, we probably would have been able to
complete the project faster, and we probably would have been
able to save even more. So we completely support this bill. We
appreciate, Senator Sinema, your support and Senator Cruz's
support because they will make a difference, and not only be
more efficient, but also saving dollars.
Senator Sinema. Thank you. Ms. Bewley?
Ms. Bewley. Senator Sinema, I absolutely support Sean's
comments. We think the bill is a wonderful opportunity for us
to be more efficient. As I mentioned before, we operate as
business enterprises, and having the flexibility to do things
more efficiently is wonderful for us, because then we can
finish and move on to another project or open up a runway or
open up a terminal that much quicker.
Senator Sinema. Thank you so much. And with that, it looks
like we do not have any additional Senators in the queue, so we
have reached the end of today's hearing. I want to say thank
you to all of the witnesses for your time and for your
testimony and for your flexibility today.
The hearing's record will remain open for two weeks until
July 7th of 2021. Any Senators that would like to submit
questions for the record for the hearing witnesses should do so
by July 7. And we ask that our witness responses be returned to
the committee by July 14, 2021. Thank you again so much. We are
adjourned.
[Whereupon, at 4:22 p.m., the hearing was adjourned.]
A P P E N D I X
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______
Response to Written Question Submitted by Hon. Tammy Duckworth to
Danette Bewley
In Airports Council International--North America's (ACI-NA) most
recent infrastructure needs study, Building the Runway to Economic
Growth, America's airports have identified $115 billion in necessary
infrastructure projects at their facilities over the next five years.
With limited Federal funds available and an outdated Federal cap on
local user fees, airports often turn to financial marketplaces to help
finance their infrastructure projects. While not a substitute for new,
direct investment in airports, increasing the number of financing
options and tools available to airports helps them improve their
infrastructure more quickly and in a more cost-effective manner.
The current Transportation Infrastructure Finance and Innovation
Act (TIFIA) program at DOT is limited to surface transportation, but
several airports have been exploring the feasibility of financing
transit-connected projects at their facilities. That has sparked an
interest among industry and government in finding ways to incorporate
more airport development projects into the TIFIA program. With
significant infrastructure needs in airport terminals nationwide, the
airport industry strongly supports the bipartisan and bicameral TIFIA
for Airports legislation you have introduced with Sen. Cornyn, Rep.
Garamendi, and Rep. Babin that would expand the TIFIA program to
include all Passenger Facility Charge (PFC)-eligible projects at
airports. Making additional airport development projects explicitly
eligible for TIFIA would allow airports to access financing at lower
borrowing costs and with more flexible repayment terms than through
traditional markets. In this time of economic uncertainty, with the
current TIFIA fund running a surplus, your legislation would help
airports across the country--including small hubs like Tucson
International Airport--participate in this important alternative
financing program.
______
Response to Written Question Submitted by Hon. Tammy Duckworth to
Paul Cullen
Transportation Infrastructure Finance and Innovation Act (TIFIA)
financing.
Question. On September 27, 2019, the Kansas City Star published an
article about the Kansas City International Airport's interest in the
TIFIA program, in which a Southwest Airlines representative said the
airlines was supportive of the TIFIA effort. Mr. Cullen, do you
supporting extending TIFIA to airport-related projects?
Answer. Yes, Senator Duckworth, Southwest Airlines supports
extending eligibility for Transportation and Infrastructure Finance and
Innovation Act (TIFIA) credit assistance to airport projects. Today,
most airports have access to significant capital resources, but TIFIA
would be another good tool in the broader tool box. We appreciate your
bipartisan efforts to ensure airports have the same access to TIFIA
funds that other projects--such as highways and transit--already enjoy
today. Taxpayers will be well-protected because airports have ample
access to multiple sources of revenue today. In other words, airports
are well-positioned to pay-back TIFIA loans in addition to the non-
TIFIA bonds that they can access today. Existing sources of revenue for
commercial airports include airline-paid rents/landing fees (the
largest source of revenue), existing PFC collections, AIP grants,
supplemental Federal funding, and fees collected from non-airline
users, parking, concessions, rental cars, taxi/ride share services,
advertising, etc. As a result, we think lenders are well-protected and
it makes sense to provide equitable access to the TIFIA program for our
airport partners. Thank you.
______
Response to Written Question Submitted by Hon. Tammy Duckworth to
Sean Donohue
Question. Mr. Donohue, Senator Cornyn and I recently reintroduced
the TIFIA for Airports Act (S.1715), which would expand TIFIA credit
assistance to state and local airport projects and was successfully
included in the Surface Transportation Reauthorization Act of 2021. Do
you support extending TIFIA to airport-related projects? How would
expanding TIFIA benefit airports such as Dallas Fort Worth
International Airport?
Answer. DFW Airport supports extending TIFIA for airport related
projects. TIFIA provides airports with financing options at attractive
interest rates. This is an important option given the large capital
expenses associated with renovation and expansion of airport
facilities. DFW encourages the Senate to reduce the significant
administrative burdens of the TIFIA program to make it a more
attractive option for airports.
[all]