Finance

  • Understand the sources of airport funding, expenses and the organizational and regulatory systems that guide financial opportunities and choices.

    Airports use a variety of governance structures. Common governance structures include the airport as a division of the state, county, or local government, and the airport as part of a port district or airport authority. These forms of governance structure are public or quasi-public entities, and have taxation authority. Airports that are run in this manner differ from airports that are run as private enterprise because producing profit and shareholder return is not a goal of the organization. The underlying goal of most public use airports in the United States, particularly those in the NPIAS, is to provide the infrastructure necessary to facilitate interstate commerce, improve community access, and to provide support in emergency situations. These airports receive public investment through taxes and government grants and private funding from rents and other fees. Because of these funding mechanisms, there are restrictions on what airports may spend their money on and how revenues must be reinvested in the airport.

    Topics

    • Airport Governance Structures and Their Impact on Financial Strategies: An overview of airport governance types for public-use airports in the United States and the associated powers for taxation. [Details]
    • Federal, State, and Local Funding Sources for Airports: A summary of the most common funding sources for airport infrastructure projects. [Details]
    • Regulatory Restrictions on Finances and Spending: Public funding of airport capital projects come with restrictions on how the money can be used. [Details]
    • Airport-Generated Revenue or Operating Revenue: Revenue may be generated by airports through fees for services, fuel sales and property development but there are many considerations. [Details]

  • Explore the current financial status of your airport including recent past performance and projected revenue and spending for the planning horizon.

    Airport sponsors prepare capital improvement plans for their airport or system of airports. Airport managers can build support for capital improvements by showing how implementation can positively impact the airport’s function or utility, and generate revenue, and by identifying funding sources that reduce the sponsor’s financial stake in the project. Airports that are eligible for FAA funding must follow the FAA’s process for capital planning, which includes justifying the improvements in a planning document, including the improvements on the airport layout plan, and submitting a five-year capital plan that shows the near-term improvements. Meeting FAA and state requirements, identifying funding sources, and documenting expected financial benefits can seem daunting at first. However, there are resources available to guide airport managers through the process.

    Topics

    • Explore How Airports Manage Financial Decisions and Learn about Their Revenues and Expenses: This topic explores best practices for evaluating past performance, benchmarking, and financial forecasting. [Details]
    • Identify the Airport’s Future Projects Based on Their ALP: Only projects shown on an approved airport layout plan are eligible for FAA funding. [Details]
    • Identify the Airport’s Potential Funding Sources: This topic explores ways the airport sponsor can come up with the local match requirement for FAA and state funded projects. [Details]
    • Discover Who Can Help Identify Funding Strategies: This topic introduces some industry groups and agency staff who can assist airport managers with funding strategies. [Details]

  • Take action to move the airport toward self-sufficiency through increased revenue generation and cost reductions and then share the airport’s plan with the community.

    Complete financial self-sufficiency may or may not be a realistic financial goal depending on the specific circumstances at the airport. Federal obligations, if applicable, require that the airport be as self-sustaining as possible. Whether it’s required or not, a move toward financial self-sufficiency through increased revenue generation and cost reductions is a positive message that can be shared with the community. Merely having a better ‘handle’ on the financial position of the airport builds trust in the airport’s stewardship with the decision makers and the community.

    Topics

    • Identify New Funding Sources for Future Projects: There are multiple ways that sponsors can acquire additional funding for capital projects, including: sharing AIP entitlement funds (where eligible), state grants, and local tax incentives. [Details]
    • Develop Strategies for New Airport-Generated Revenue: Airports can generate additional revenue through aeronautical and non-aeronautical means; however, consideration must be given to applicable grant assurances and aviation compatibility when evaluating options. [Details]
    • Identify Strategic Partnerships that May Reduce Expenses through Innovative Purchasing Arrangements: Airports that are part of a system or a department of a larger government entity can reduce costs and obtain more competitive pricing by ordering goods and services in bulk with other departments. [Details]
    • Develop a Marketing Plan for the Airport: Airport marketing plans are a critical part of increasing revenue, lowering expenses, and showcasing value to the community. Consideration should be given to what makes a public airport unique from a private, for-profit enterprise. [Details]
    • Inform the Community about the Airport’s Financial Strategies and Limitations through Strategic Communication Efforts: By proactively engaging the community to share the airports plans and economic contribution, airport managers can address common misconceptions about the use and benefit of public airports. [Details]