Just How Big Is a $10 Million Airport Terminal Grant?
In the list announced last week of 91 grants to be made to U.S. airports from the first year of the new Airport Terminal Program’s funding under the Infrastructure Investment and Jobs Act, there were six grants made that were an even $10 million each. (The largest individual grant was for $60 million and the smallest was for just $36 grand).
But the absolute size of the grant can be misleading in terms of the relative importance of the federal grant money to the airport’s overall finances. In this case, we correlated some of the grants with the FAA’s latest airport passenger traffic data (calendar year 2021 passenger enplanements, listed here).
Of the six $10 million grants, one went to a large hub airport (over 6.5 million annual enplanements), two went to medium hubs (from about 1.64 million enplanements up to 6.5 million), two more to small hubs (from about 325 thousand annual enplanements up to 1.64 million), and one went to a nonhub primary airport.
The $10 million large hub grant went to Seattle-Tacoma, which had 17.4 million enplanements in 2021, so that $10 million works out to 57 cents of federal grant money per 2021 passenger. Put another way, if Congress lifted the passenger facility charge cap, Sea-Tac could have paid for that project with cash by raising its PFC by 50 cents for just over a year, or they could have borrowed $10 million to build the project and paid it back out of PFC revenues from a PFC increase of just pennies.
The medium hubs with the $10 million grants were Honolulu (5.8 million annual passengers) and San Jose (3.6 million), meaning that their $10 million grants were $1.71 per 2021 passenger and $2.76 per 2021 passenger, respectively. Again, an extra 50 cent PFC could have paid for these projects in cash in under 4 years or under 6 years, respectively, or a much smaller PFC could have paid for it if financed through bonds.
The $10 million grants increase, relative to total airport traffic, for the small hubs (Sarasota-Bradenton, Florida, and Huntsville, Alabama, who had 1.6 million and 460 thousand enplanements in 2021, respectively). $10 million comes to $6.35 per annual Sarasota passenger and $21.75 per annual Huntsville. Both these projects are for new passenger terminals or comprehensive terminal renovations, and the Huntsville project in particular looks like it, but for the federal grant, would have to be the major focus of Huntsville airport capital spending for at least a decade.
Then we get to the $10 million grant for the non-hub primary airport – West Yellowstone, Montana. This grant will build them an entire new terminal building, replacing one built in 1963, with modern amenities like ticket counters and hold rooms and ADA-compliant entrances.
But West Yellowstone only had a scant 13,149 passenger enplanements in 2021…an average of 36 per day. (Except, as this article from 2020 points out, the airport is only open 6 months per year, so it’s really 72 people per day.) So, the $10 million in federal grant money equals an astounding $760.51 per annual passenger. This is, in all likelihood, more money than the locality could ever have found on its own without direct federal involvement.
(And, of course, West Yellowstone is 332 miles away from the nearest medium or large hub (Salt Lake City), so it is still eligible for Essential Air Service subsidies, which DOT says totaled $1,582,311 last year, which means that federal taxpayers are paying $120 per year, each way, for ticket subsidies to fly each passenger in or out of West Yellowstone and, on top of that, are now spending $761 per annual passenger on a new terminal where they can wait for the subsidized airplanes to take off and land).
|$10 Million Grants from the FY 2022 Airport Terminal Program|
|FY 2022||CY 2021||Grant $ per|
|M||San Jose, CA||$10,000,000||3,619,690||$2.76|
|N||West Yellowstone, MT||$10,000,000||13,149||$760.51|
There were other grants to nonhub primary airports that were quite sizable in comparison to their 2021 boardings (North Central West Virginia, $403.63; Golden Triangle Regional, Mississippi, $313.30; Waynesville-Saint Robert Regional, Missouri, $264.55; Pullman-Moscow, Washington, $216.62), but nothing close to West Yellowstone.