[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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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).
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \13\ Airports Council International-North America, 2020.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 ______
                                 
   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]