COVID-19 Impact on Federal and State AIP Grants

March 18, 2020

The final impact of the COVID-19 public health threat for both the federal and state AIP grant programs is unknown at this time.  Complicating the situation is whether the White House and Congress will offer the airline industry a substantial bailout at the expense of the Airport and Airway Trust Fund (AATF).  However, a few initial projections can be made regarding ALDOT’s airport improvement grant program.  First, this year’s grant offers may be a bit delayed but the Aeronautics Bureau should be able to issue grants at a funding level that is very similar to a normal year.  Second, due to the decline in airline operations at the present time, we are expecting a similar decline in fuel tax revenue.  We are beginning to follow these fuel tax revenue trends very closely to determine the magnitude of the revenue drop off.  What this anticipated revenue decline means is that our grant program for 2021 will definitely be impacted to some extent.  The magnitude will be determined by the extent of the COVID-19 public health threat.  Essentially, next year will be the one in which we feel the impact of this year’s curtailed airline operations, as well as business and general aviation activity decline.

We will keep everyone posted as more data becomes available.