Airport Improvement Program - Essay Example

The Airport Improvement Program. A very important source of financing for capital improvement in airports is the Airport Improvement Program (AIP). There are many other sources such as tax-exempt bonds, PFC, operating revenue and grants from states & local authorities. Airports thus use a combination of any of the sources based on the individual airport’s financial situation and the kind of project to the funded. AIP obligate funds are usually come from the airway Trust fund which in turn is largely draws its finances from passenger ticket taxes, taxes on fuel as well as other levies and fees.

Sponsors are generally permitted to expend AIP money towards major airfield capital improvement efforts as well as repairs. Projects eligible for AIP funding include; airport safety associated enhancements, improvement of capacity, protection of the environment in the airports and enhancement of security. The funds can also be used on professional services that come with the eligible projects i.e., plans, survey services and designs. It should be noted that the operating expenses associated with the same projects are not eligible for AIP funding.

The projects must therefore be sufficiently justified apart from complying with federal requirements of procurement and environmental safety. In major primary airports, AIP grants cover 70% of the total eligible costs or 80% for implementation of noise programs. The range of coverage for general aviation airports, reliever and small primary airports ranges from 90%-95% of the total cost as per the statutory minimum requirements. AIP grants to airports are aimed to fund planning, development and implementation of noise compatibility projects at the public-use airports.

In order to be eligible for AIP grants therefore the airports must either be owned by the public, privately owned but with scheduled services & a minimum of two thousand five hundred enplanements yearly. Also private airports designated as relievers by FAA are eligible. Inclusion in the NPIAS is another important eligibility requirement for AIP. AIP funds are generally used towards projects contributing to capital improvement at the airports. The funds can thus be expended on most of the airfield capital improvement projects and in some unique events on terminals, and hangars as well as some nonaviation developments.

Professional services related to the projects are also eligible for funding. On the other hand, those projects associated operations in the airports and improvements that are revenue generating are typically not funded by AIP. Other costs related to operations e.g. salary expenses, supplies and equipment purchase are also not funded by the AIP money. There is a marked difference between the two types of airport expenses explaining why only capital improvement expenses are funded as per AIP goals.

Capital improvements for instances refer to renovations aimed at extending the usefulness of the individual airports and as such add long term value. Repairs and maintenances on their part are just necessary to ensure the airports are in conditions to continue working. They thus don’t add significant value nor extend the airport’s life.Works Cited.1. Robert S. Kirk. Airport Improvement Program (AIP): Reauthorization Issues for Congress. Congressional research Service, 2009. Available at: https://www.fas.org/sgp/crs/misc/R40608.pdf