The Need for Airport Funding

Abstract

As a major component of the aviation industry, airports today rely on huge amounts of capital to keep the avenues of air transportation open. The Airport and Airways Development Act of 1970 became effective in May 1970 and provided a major source of airport capital improvement funding. However, since this law was passed airport capital needs have grown well beyond the capabilities of the federal government to fund them. Airports face a different financial market than their industry contemporaries; due in part to the regulated public environment, the uniqueness of airport revenue generation and debt markets. The need for airport funding will be explained by exploring the basics of airport operating costs, capital costs and revenue generation. An investigation of capital finance strategies will bring the conclusion.