Impact of Federal CARES Act on Indy Airport
$52 million to address IND operational needs
We welcomed the March 27 FAA announcement of assisting our nation’s airport system for continued operations during this COVID-19 crisis and saving workers’ jobs.
“The amount of money allocated for the Indianapolis Airport Authority’s overall system, particularly the more than $52 million earmarked for the Indianapolis International Airport (IND), will help support the important role that air travel and the Indy Airport plays as a vital economic driver as recovery efforts begin,” said IAA Executive Director Mario Rodriguez.
As we further understand details of this funding source, according to the FAA: This funding will support continuing operations and replace lost revenue resulting from the sharp decline in passenger traffic and other airport business due to the COVID-19 public health emergency. The funds are available for airport capital expenditures, airport operating expenses including payroll and utilities, and airport debt payments.
We are carefully analyzing FAA guidance to apply for these grants in order to quickly infuse these dollars into our local economy throughout Central Indiana. On April 21, we received the pre-populated CARES Act grant applications and returned executed applications to the FAA on April 24.
“We applaud the leadership shown by the U.S. Department of Transportation’s (DOT) Federal Aviation Administration (FAA) and other federal leaders during these difficult times and recognize the critical role the Indy Airport and air travel plays as a catalyst within Central Indiana and in our state’s economic recovery,” said Rodriguez.
As we begin to understand the long road we face until air travel recovers, the funds made available to the Indy airport will be used directly for expenses due to significant loss of non-airline revenue and reduced passenger traffic. This will cover critical costs such as payroll, utilities, and debt service, as the airport remains open and operational, and is considered Essential Infrastructure during the Indiana Stay-At-Home Order.
For example, the funds will help cover 2020 interest and principal amounts due of $80,447,000 on the $881,855,000 of Indianapolis Airport Authority outstanding debt.
There is a stipulation in the CARES Act regarding employment requirements as we must employ through December 31, 2020, at least 90% of the number of individuals employed (after marking adjustments for retirements or voluntary employee separations) as of March 27, 2020. We commend the federal government for making the airport workforce a priority. This stipulation aligns with our focus on preserving our IAA workforce as they are the key to why the airport is award-winning and they will make the future of recovery possible. Through this public health crisis and even prior to the CARES Act requirements, the Indianapolis Airport Authority has not laid off or furloughed employees, and we remain committed to our workforce.
We will continue to review our priorities and financial stability as the situation evolves.
Frequently Asked Questions FAQ:
What are the CARES Act provisions for Airport Grants?
On March 27, nearly $10 billion was allocated for eligible U.S. airports to prevent, prepare for, and respond to coronavirus impacts, including support for continuing airport operations. The funds are to keep airports in reliable, safe operations to serve the aviation industry, the traveling public, and support the economy; keep airport and aviation workers employed; and keep airport credit ratings stable.
More than $96 million was allocated to 65 airports in Indiana, including the six airports owned by the Indianapolis Airport Authority, to help respond to the COVID-19 public health emergency.
Which airports are eligible for CARES Act Airport Grants?
Eligible airports in the National Plan of Integrated Airport Systems (NPIAS), including commercial service airports, reliever airports, and some public-owned general aviation airports. More than 3,000 airports were included.
How were the funds allocated?
The CARES Act provides these new funds by various formulas for all airports that are part of the national airport system. In total, the formula evaluates for commercial service airports, the airport’s percentage of enplanements during the calendar year 2018; sponsor’s percentage of debt service for the combined debt service for all commercial service airports for the fiscal year 2018; and sponsor’s fiscal year 2018 ratio of unrestricted reserves to its respective debt service.
How does an airport apply for these funds?
Following the March 27 announcement of available funds, the Indianapolis Airport Authority has been carefully analyzing FAA guidance to apply for these grants in order to quickly infuse these dollars into the local economy. We received the pre-populated CARES Act grant applications on April 21 and returned executed applications to the FAA on April 24.
What is the next step in the grant funding process?
After submitting the executed CARES grant applications to the FAA on April 24, we await actual grant award documents for execution. After the grant is fully executed, we must submit expense details to the FAA to receive the grant funding.
How long will these funds last?
We continue to run financial models to help determine an educated guess to this question; however, the reality is that answer is unknown until it’s realized how quickly air travel will recover.
Will airport business partners benefit from these funds?
We’re continuing to work closely with each of our airport business partners to understand how we can support them with modifications to conditions and/or operating schedules to provide the highest level of service to our passengers and employees during this evolving situation. Commercial air carriers were included in the CARES Act and will receive conditional funding. It remains to be seen if federal relief funding will become available for other airport business partners, such as concessionaires and rental car companies.
Has the airport made adjustments to its overall budget and capital improvement projects to reallocate funds?
We have made several adjustments as we remain focused on long-term stability, including deferred discretionary spending and a realignment of the capital improvement plan to reflect lower available funding due to reduced air travel activity.
We’ve continued to monitor our financial situation as this public health situation progressed and its impact on air travel. If necessary, we will make further adjustments. For safety reasons, some construction projects have been halted or their schedules significantly adjusted. However, whenever possible, we’re contributing to the local economy by continuing strategic construction and capital improvement projects throughout the airport campus.
CARES Act Funding Allocated for Indianapolis Airport Authority Airports:
- Indianapolis International Airport (IND) – $52,275,549
- Eagle Creek Airpark (EYE) – $69,000
- Indianapolis Metropolitan Airport (UMP) – $69,000
- Indianapolis Regional Airport (MQJ) – $69,000
- Hendricks County-Gordon Graham Field (2R2) –$30,000
- Indianapolis Downtown Heliport (8A4) –$20,000