Going for grants
The FAA’s Airport Improvement Program
(AIP) provides grants to public agencies
– and, in some cases, to private owners
and entities – for the planning and
development of public-use airports.
For general aviation airports, the grant
covers 90-95% of eligible costs, based
on statutory requirements.
Eligible projects include
improvements related to enhancing
airport safety, capacity, security, and
environmental concerns. In general,
grant recipients can get AIP funds for
most airfield capital improvements
or rehabilitation projects. In some
instances, airports can also receive
grants for terminals, hangars, and
non-aviation development. Certain
professional services that are necessary
for eligible projects like planning,
surveying and design are also possible.
Projects related to revenue
producing facilities may be eligible if
the airport has already satisfactorily
addressed all airside needs and the
improvement will increase revenue for
the airport.
However, projects related to airport
operations and operational costs such
as salaries, equipment, and supplies are
not eligible for funding.
Because the demand for AIP funds
exceeds the availability, the FAA bases
distributions on how projects link with
national priorities and objectives. AIP
funds are typically first split up into
major entitlement categories such as
primary, cargo, and general aviation.
As part of its 2019 National Plan
of Integrated Airports System (NPIAS)
report, the FAA estimated that airports
have US$35.1 billion in AIP-eligible
projects between 2019 and 2023, or
more than US$7 billion annually.
not specifically designed for aeronautical
businesses. The office park has become
a high-end suburban location for all
types of businesses. The catalytic effect
of smart investment by general aviation
airports is significant.
“Another benefit is the opportunity to
serve public interests by encouraging
development at the airport,” says Zonka.
“It’s also brilliant to be serving the
aviation system by offering a safe
location to operate from and
serving the community
by adding private
investment to the local
tax base, creating
jobs and economic
vitality.”
There are some
potential pitfalls
when it comes to
partnering with a
business on airport
land. Administering
leases can be
challenging for airports, in
addition to remaining a good
neighbor to the surrounding
community.
“Most airports can
only make more
money if their
tenants make
more money”
Bryan Del Monte, president
at the Aviation Agency.
“There has been some controversy
about airports that have spent airport
money to build infrastructure in a
speculative manner and then have to
wait a considerable amount of years
— and maybe never — to really see the
return on that investment,” says Kirsch.
Europe versus USA
The considerations involved in such decision-making are
where European and USA airports differ.
In the USA, all general aviation airports are required to
operate as closed fiscal systems, meaning that all revenue
generated from the airport has to be used for the airport. So,
when a general aviation airport engages in non-aeronautical
development, the benefits of that are bound directly to the
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aeronautical users because they help produce their
rates and charges. In Europe, there is no legislative
requirement to keep all the money generated in the
airport, at the airport.
“The approach in the US reduces the incentive to
make lots of money from non-aeronautical development
because there is a ceiling on how much money an
airport can make,” says Kirsch. “This is why airports
often seek private partners because they can earn
profit and take the money out of the airport.
The restriction in the USA only
applies to the airport owner
itself, not the concessionaire
or private entities they
operate in the airport.
“The number and
proliferation of general
aviation airports in
the USA means that
it’s a very competitive
marketplace for
aviation-orientated
businesses.”
Creating a buzz
Significant sums of money
can be made by operators
making smart decisions about
airport real estate. It’s for airports to
decide on what they want for their site, be it a focus
on aeronautical or non-aeronautical businesses, or
perhaps a mix. However, it is difficult for potential
business partnerships to enter the tender process if
they don’t know where they could fit into the airport’s
wider plan.
Troy Hayes, creative director at the
Aviation Agency says, “It’s important to
find the partners who want to be a part
of your project. Maximizing the use of
the land business airports have has
to be the prime objective.
“Appreciate the market share that
you’ve got, it will help to ensure that
your customers want to keep
coming back.”
B U S I N E S S & C O M M E R C I A L
Right: The helicopter shuttle that
operates from several of Sheltair’s New
York facilities allows operators greater
flexibility and opens up markets that may
not have been as accessible in the past