The New World for Airports
At this point in time, airports are in quarantine mode and have established a limited operational status. Many are fielding questions from their airport boards and communities about what they plan to do next. However, not even the aviation community knows what the ultimate impact of the virus on airports will be. When customers come back has a lot to do with decisions by multiple entities that have yet to be made. The easiest decisions for airports to make right now are the ones that focus on what we as a community do know and to take advantage of available resources and opportunities.
The Known Environment
For the most part, airports in the middle of construction projects when the quarantine went into effect have been able to continue construction by implementing new site protocols. One of the few benefits of this slowdown has been being able to accelerate construction phasing due to the lack of aircraft and passenger traffic. Many extremely busy airports had not been able to accomplish various construction or maintenance activities due to the disruption they would have caused. This slowdown is providing an opportunity for airports to accomplish projects on their to-do lists.
FY 2020 Grants
The Coronavirus Aid, Relief and Economic Security (CARES) Act benefits airports by providing funds to keep them operating during this crisis, but the decisions that need to be made by each airport will depend on their individual circumstances. One of the top benefits of the CARES Act is that any FY 2020 Federal Aviation Administration (FAA) Airport Improvement Program (AIP) grant will become 100% FAA funded. For some airports, this benefit will be significant and will relieve them of having to match these grants. It also will allow FY 2020 projects to move forward.
The Unknown Environment
Other funds from the CARES Act can be used at the discretion of each airport for any lawful airport purpose. However, this creates more uncertainty for many airports. The financial health of every airport differs significantly based on the amount of cash reserves they have available and the amount of debt service they are obligated to pay. Airports that have cash reserves and limited debt will have more options to use the CARES Act funds for capital, equipment and/or maintenance activities, whereas airports with limited cash reserves or significant debt service payments may be limited in what they can do. Many airports are also faced with requests from their tenants for rent relief, which must be balanced with other demands on their resources.
Although the picture will become clearer as we ease into more activity and customers start coming back, it may be prudent for airports to wait before deciding what to do with the CARES Act funds if they have that flexibility. This is new territory for everyone, so it is important that each airport consider its specific circumstances. Airport officials also can pose questions to the FAA, an aviation association or a consultant to help make these impactful decisions.
Tomorrow and Beyond
The next step for airports will be to figure out how to prepare for the post-quarantine world. This will include revised forecasting, short-term planning and updated financial modeling. In addition to the CARES Act funds, there are funds available from the Transportation Security Administration and the Federal Emergency Management Agency (FEMA) to help airports recover COVID-related costs. All airports also should be tracking those costs and pursuing reimbursement. To help with this, there are resources like the FEMA Reimbursement Toolkit app. The app was created by Woolpert and Esri to help airports enter, track and submit reimbursable expenses to FEMA. It is designed to ease the process and help airports get reimbursements more quickly. Tracking, documenting and communicating efforts to combat COVID will also be important to getting your customers back to your airport again.
The post-quarantine world also will require new procedures for airport employees, tenants and customers. We don’t know what those procedures will be at this point, but airports should be part of the conversations that federal and state governments are having right now about how to reopen the economy. Coordinating with tenants and other stakeholders will yield the best operational solutions. It is critical that the industry demonstrate that we are together in this effort to provide customers with the level of comfort they require to get back on an airplane.
Airports’ long-range plans also will change in the wake of this worldwide pandemic. Every airport will have to prepare for contingencies of this magnitude moving forward. Many airports will be looking for technology solutions to help process passengers, sanitize facilities and help reimagine how existing terminals can support these changes. Some airports are exploring these changes now, and that is important for everyone.
It is clear that we in the aviation community need to continue to work together, learn from each other and leverage our resources to not only survive this challenge but to be better prepared for the future. Let’s keep looking forward.
Woolpert Senior Consultant Jeff Mulder, A.A.E., has more than 30 years of experience in the aviation industry. He has served as the director of airports in three states, has a master’s degree in business administration, is a commercial pilot and certified flight instructor, and has chaired the American Association of Airport Executives.