Airport Improvement Program (aip) aff
Generic Solvency Extensions
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- AIP is the best funding mechanism to improve airports – national needs are prioritized
- AIP key - no good alt to AIP funding
- AIP key - alternative funding sources unreliable
Generic Solvency ExtensionsFunds distributed according to priority – our advantage areas would be high priorityFAA 2012 – National Aviation Authority of the Us (Federal Aviation Administration, “AIP Sponsor Guide,” 4/19, About FAA, http://www.faa.gov/airports/central/aip/sponsor_guide/media/0100.pdf)//JS Because the demand for AIP funds exceeds the availability, the FAA bases the distribution of limited AIP funds on current national priorities and objectives. Projects that rate a high priority will receive higher consideration for funding over those projects with lower priority ratings. Each fiscal year, the FAA apportions AIP funds into major entitlement categories such as enplanements, non-primary, and state apportionment funds. The FAA distributes the remaining funds to a discretionary fund. Set-aside projects (Airport noise and the Military Airport Program) receive first attention from this distribution. The funds that remain after the set-asides are true discretionary funds the FAA distributes based on a national prioritization system. The FAA distributes discretionary funds to projects that best carry out the purpose of the AIP, with highest priority given to safety, security, reconstruction, capacity and standards. AIP is the best funding mechanism to improve airports – national needs are prioritizedKirk 9 – Specialist in Transportation Policy(Robert S. Kirk, “Airport Improvement Program(AIP): Reauthorization Issues for Congress” Congressional Research Service, 29 May 2009, http://www.fas.org/sgp/crs/misc/R40608.pdf)//FK The AIP provides federal grants to airports for airport development and planning. The airports participating in the AIP range from very large publicly-owned primary commercial service airports to small public use general aviation airports that may be privately-owned (but are required under AIP to be available for public use). As mentioned earlier, AIP funding is usually limited to construction or improvements related to aircraft operations, such as runways and taxiways. Commercial revenue producing facilities are generally not eligible for AIP funding, nor are operational costs. 26 The structure of AIP funds distribution reflects legislatively set national priorities and objectives of assuring airport safety and security, stimulating capacity building, reducing congestion, helping fund noise and environmental mitigation costs, and financing small state and community airports. There is less federal involvement in the four other sources of airport development funds. The main financial advantage of AIP to airports is that, as a grant program, it can provide funds for a known range of capital projects without the financial burden placed on airports by bond or other debt financing. Limitations on the use of AIP grants include the range of projects that AIP can fund and the requirement that airports adhere to all program regulations and grant assurances AIP key - no good alt to AIP fundingUSGAC 96- us general accounting office (“letter from USGAC to Chairman of the US Committee on Appropriations Mark O Hatfield”, July 31, 1996, http://gao.justia.com/department-of-transportation/1996/7/aip-funding-for-the-nation-s-largest-airports-rced-96-219r/RCED-96-219R-full-report.pdf)//MSO If AIP funding declines further, airports’ and airlines’ costs may increase, while the effect on passenger costs are uncertain- With less AIP, an-ports’ options include reducing capital investments, increasing other sources of funding, or adopting a combination of the two. According to FAA officials, AIP reductions would most likely affect projects related to airfields’ pavement, such as runway and taxiway construction, because that is where most AIP spending occurs. If airports maintained the same levels of capital investment with less AIP funding, airport costs could increase-for example, from increased interest expense on additional airport bonds. Increased airport capital costs could mean reduced profitability for airlines or increased ticket prices for passengers. However, airlines are cautious in passing on cost increases to passengers because even a slight increase in ticket prices can result in a decline in passengers. AIP key - alternative funding sources unreliableUSGAC 96- us general accounting office (“letter from USGAC to Chairman of the US Committee on Appropriations Mark O Hatfield”, July 31, 1996, http://gao.justia.com/department-of-transportation/1996/7/aip-funding-for-the-nation-s-largest-airports-rced-96-219r/RCED-96-219R-full-report.pdf)//MSO Airports have three other major sources of capital funds besides AIP: passenger facility charges, bonds, and airport revenue. Large and medium hub airports, as a whole, could potentially increase these other sources of capital to substitute for AIP reductions. However, these funding sources are constrained for various reasons, such as statutory limits on passenger facility charge collections and federal policy on airport revenue. If the current maximum $3 per passenger fee remained unchanged, we estimate that passenger facility charges could grow at least $190 million beyond their current levels by 2010. Airports’ capacity to pay for additional bond financing by passing on debt service costs to airlines or recovering them from nonairline sources such as concessions could vary substantially. Large hub airports were able to pass on debt service costs while significantly increasing bond issues between 1988 and 1994. Increasing capital funding from airport revenues such as airlines’ landing fees and concession receipts is tenuous because of its variability and airline and federal limits on airport revenue. 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