A recent congressional clash preventing the passage of a new stopgap Federal Aviation Administration (FAA) bill has led to significant repercussions, with the FAA issuing stop-work orders on approximately 80 airport engineering and construction contracts across the country. These contracts, amounting to over $790 million, have been affected due to the failure to pass a new authorization bill before the expiration of the previous one on July 22.
The impasse has also resulted in the freezing of an additional $2.5 billion in infrastructure funds, as the FAA has suspended the awarding of new grants from its Airport Improvement Program (AIP). Additionally, around 4,000 out of the agency’s 47,000 workers have been furloughed.
The halt in AIP grants is causing more significant challenges for smaller airports compared to larger hubs, which possess greater capacity to secure funding through the bond market for capital projects.
Furthermore, the FAA’s authority to collect the passenger ticket tax, which contributes to the Airport and Airway Trust Fund, has been suspended. While FAA Administrator J. Randolph Babbitt indicates that the agency can rely on the trust fund’s balance temporarily, he notes the cessation of deposits is costing the FAA $30 million per day.
Jane Calderwood, Vice President for Government and Political Affairs at Airports Council International, North America, highlights the concerns raised by airport directors, with one expressing worry about the negative impact on the trust fund if the situation persists, questioning whether the FAA will have sufficient funds for future projects.
The lack of agreement on a long-term FAA authorization between the House and Senate, ongoing for over three years since the expiration of the last multiyear aviation statute on September 30, 2007, has resulted in a series of 20 short-term extensions. However, the 21st extension triggered a partisan dispute between House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) and Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.).
Mica’s extension proposal through September 16 included provisions to trim the Essential Air Service (EAS) program, which subsidizes flights to rural airports. Passed by the House on July 20, Mica’s bill sought to cap EAS subsidies at $1,000 per flight, potentially removing three airports from the EAS list. Rockefeller, a staunch EAS supporter, advocated for a clean stopgap and attributed the standoff to the House, while Mica placed blame on the Senate, citing financial concerns and the need to cut excessive subsidies.