Day 2

Opening Remarks

Speaker

Steve Van Beek, Director, Steer

Overview

At the beginning of Day 2, Steve Van Beek welcomed the audience back to the session and provided remarks to set the stage for the day’s discussion.

Detailed Summary of Opening Remarks

Steve Van Beek provided background on the availability of funding for airports today as compared with 20 years ago. Even with the elevated capital needs of airports, Van Beek noted, federal capital grants under the AIP are $3.35 billion per year, approximately the same as the funding was 20 years ago (there are exceptions with the postpandemic grants). Similarly, the PFC ceiling has remained at $4.50 per passenger over that period, meaning the actual purchasing power of these funding sources when inflation is considered has declined significantly. Van Beek stated that this also helps explain why airports have to ask airlines to pay more in rates and charges to help fund capacity.

Van Beek noted that another explanation of the funding shortfall for airports is the sheer level of capital needs. As of March 2023, there were an average of 103 passengers per commercial airline operation in the United States, which is a 64-percent increase since 2003. This means that passenger-sensitive infrastructure such as gate hold rooms, security checkpoints, concessions, and parking all have to be expanded. The good news is that the increase in passengers per operation has meant that the airfields are able to deliver more passengers for the same number of operations.

Van Beek pointed out that Day 2’s speakers would provide information about commercial and business arrangements at airports and how management teams are attempting to find capital and invest it in capacity needs.

Van Beek also noted the aviation industry at airports continues to work toward the aspirational goal of net-zero emissions by the year 2050—a policy agreed to under the auspices of the International Civil Aviation Organization. Federal programs have been marginally helpful but do not provide a level of support that would help airports decarbonize and migrate fossil fuel–dependent aircraft and vehicles to electricity and battery power. Van Beek previewed the day’s topics and noted that audience members would hear how airports were addressing this, which is one of the industry’s greatest challenges.