Air Transport Association provides a Q&A on airports in the United States.
Q: How many U.S. airports are there?
A: As of July 2006, according to the National Plan of Integrated Airport Systems (NPIAS), there were over 19,847 airports in the U.S.; 3,364 of those airports are recognized by the FAA as being open to the public and also eligible for Federal aid under the Airport Improvement Program. The NPIAS also includes 67proposed airports, for a total of 3,431 NPIAS airports.
NPIAS reports are available on the FAA Web site.
Q: What are the different types of airports that are in operation?
A: As defined by the Federal Aviation Administration (FAA), there are five general types of U.S. airports:
1) Commercial Service (CS) airports are defined as public airports (i.e., open to the public) receiving scheduled service and having more than 2,500 enplaned passengers in a year. According to the January 2004 NPIAS, there were 517 existing CS airports.
2) Of these 517 CS airports, 382 are “Primary Airports,” defined as having more than 10,000 annual enplanements. Primary airports are further defined as “hubs,” based on the percentage of the total annual U.S. enplanements:
- Large Hubs (30): more than one percent
- Medium Hubs (37): between 0.25 and 0.999 percent
- Small Hubs (72): between 0.05 and 0.249 percent
- Non-Hubs (243): no fewer than 10,000 passengers but up to 0.049 percent
3) Airports with more than 2,500 but fewer than 10,000 annual enplanements are defined as “Non-Primary Commercial Service Airports.” These 135 airports account for fewer than 0.1 percent of annual enplanements.
4) Reliever Airports (274) are defined as high-capacity general aviation airports in major metropolitan areas. They must have 100 or more based aircraft or more than 25,000 itinerant operations per year. The average reliever airport has 232 based aircraft, which is 29% of the nation's general aviation fleet.
5) General Aviation (GA) Airports neither receive commercial service nor meet the Reliever airport criteria. There were 2,573 GA airports in the July 2006 NPIAS. To qualify for listing in the NPIAS, these airports must be open to the public, have at least 10 based aircraft, and be located within 20 miles of the nearest NPIAS airport.
Q: Where do those three-letter airport codes come from?
A: The three-letter codes used to identify airports are part of an industry standard which is updated and designated by the Federal Aviation Administration.
Q: What are the busiest airports in the United States?
A: According to the U.S. Bureau of Transportation Statistics, the five U.S. airports with the most passengers enplaned in 2006 were: Atlanta Hartsfield-Jackson (ATL), Chicago O’Hare (ORD), Los Angeles International (LAX), Dallas-Ft. Worth (DFW), and Denver International Airport (DEN). For more information, check the Bureau of Transportation Statistics and. You may also consult Airports Council International - North America or view the publications of the FAA Office of System Capacity.
The five U.S. airports with the most cargo in 2006 were: Memphis (MEM), Anchorage (ANC), Louisville (SDF), Los Angeles (LAX) and Miami (MIA).
Q: What is the hub-and-spoke system? What advantages and challenges does it pose?
A: Some airports serve as transfer “hubs” for air carriers, facilitating efficient routing of passengers and cargo to certain destinations, or “spokes.” Small communities, in particular, benefit from this “hub-and-spoke” configuration because airlines can provide local service that might not be possible otherwise; hub-and-spoke operations connect small communities to most airlines' global networks and, in many cases, permit daily flights that offer passengers travel flexibility and convenience.
Like the railroad, trucking and shipping industries, the airlines have the capability to move people and products from place to place through “hubs” to different destinations throughout their own networks. This means that passengers often have the ability to travel to smaller cities without booking connections on multiple carriers. U.S. airlines also use their networks to extend next-day markets to remote and rural communities and to enhance inventory management and distribution logistics for businesses worldwide. Network service and the efficiency it enables is, of course, not unique to airlines. Telecommunications, rail and trucking are other good examples.
The hub-and-spoke model allows airlines to better match aircraft to customer demand. Large network airlines use strategically located airport hubs to efficiently transfer large numbers of passengers between regions. Airfreight companies do the same to move cargo as efficiently as possible. The use of hubs allows airlines to serve more markets with fewer airplanes and without forcing passengers and cargo to “interline” (i.e., transferring passengers and cargo to other aircraft and/or airlines).
Q: Who owns airports?
A: Most U.S. commercial service airports are typically owned by local governments or state governments, either directly or through an authority, a quasi-governmental body established to operate the airport. A small number of commercial service airports are participating in a Congressionally-mandated "privatization program" under which the airport ownership would be transferred to a non-governmental entity.
Q: How are airports managed?
A: There are many different models of airport management, but U.S. airports are typically managed in one of three ways: (1) individual management (city/county/state); (2) operation by a private entity, as is the case with Fort Worth Alliance Airport in Texas and the Indianapolis International Airport; or (3) as a multi-airport group such as an airport authority. For example, Los Angeles World Airports, a department of the City of Los Angeles, operates four separate airports in the vicinity of Los Angeles (Los Angeles International Airport, Ontario International Airport, Palmdale Regional Airport, and Van Nuys Airport). In some cases, airports can be managed as part of a multi-modal entity, such as the Port Authority of New York and New Jersey, which operates several airports (JFK, LaGuardia, Newark, Stewart and Teterboro), as well as trains, tunnels and seaports.
An airport operator has management control of the airport, meaning that the operator has the right to operate and develop the airport. The airport operator is responsible for the airport’s long- and short-term planning, financial performance, maintenance, operation and compliance with numerous federal, state and local laws and regulations. Historically, airlines and airports have worked cooperatively to facilitate passenger needs and to achieve smooth and efficient operations for airlines.
Q: Are any U.S. airports controlled by a foreign entity?
A: No major commercial service airports in the U.S. are owned by an entity other than a unit of the U.S. government, a state or local government.
However, a handful of airports are privately operated by foreign firms under long-term leases. For example, BAA Indianapolis LLC operates the Indianapolis International Airport under a long-term lease with the Indianapolis Airport Authority, which retains control of airport policy and development decisions. BAA USA manages the terminal concessions operation at Pittsburgh International Airport, Baltimore Washington International Airport and Boston Logan International Airport. Both of these entities are subsidiaries of BAA plc, which owns and operates several airports in the United Kingdom.
Q: How do airports generate revenue?
A: Airport operators charge airlines for the use of runways and other facilities, as well as rent for any terminal space they occupy. Airports charge other tenants and service providers — such as restaurants and shops, parking, shuttle buses and rental car companies — for the space they occupy and/or the right to provide services on airport property.
In addition, many commercial service airports generate revenue by charging passengers a facility use fee known as the passenger facility charge, or PFC (defined below), which must be approved by the FAA and collected by the airlines upon selling a ticket. Other, less common revenue sources include the sale or lease of unused airport property, leasing unused airport property for other activities such as a golf course, or extracting minerals and materials from airport property. In general, these revenue sources make airports self-sufficient, generating 98 percent of airport revenue. Only an extremely small portion of revenue at a few airports comes from the local tax base.
Q: You mentioned that some airports charge passengers PFCs. What are those, and what is that money used for?
A: Passengers may notice a PFC amount in the fare details printed at the bottom of their tickets. PFCs were established by the Aviation Safety and Capacity Act of 1990 and are regulated by the FAA. PFCs generally range in amount from $3 to $4.50 per segment for up to four segments on a round-trip ticket, depending on the airports included in an itinerary. Airlines collect PFCs in the ticketing process and then remit them to the charging airport.
PFCs are imposed by airports to supplement funds available from federal Airport Improvement Program (AIP) grants to assist in airport development and expansion. PFC revenue can be used to fund only specific capital improvement projects that will preserve or enhance safety, capacity or security; reduce noise; or increase air carrier competition. In addition to the array of AIP-eligible projects, for example, an airport might elect to impose a PFC to build gates in its terminal building, whereas AIP grants cannot be used for such projects.
PFC monthly reports can be obtained from FAA's website at: www.faa.gov/airports_airtraffic/airports/pfc/monthly_reports/
Q: What portion of the taxes/fees on my ticket helps to support airports?
A: The portion of a ticket that is composed of taxes and fees depends upon the airfare and the passenger's itinerary. Airports receive a portion of the federal excise tax and segment tax included in the price of a ticket through AIP grants, which are outlined below. In addition, as of January, 2008, 333 airports were charging a locally-imposed PFC (as explained in the previous question).
Consider the example of a domestic round-trip ticket with an itinerary of one stop each way. Of the total ticket price of $300.00, the customer pays excise taxes and segment fees totaling $42.00 which is paid into the Airport and Airway Trust Fund, and PFCs totaling $18.00, for a total of $60.00 in taxes and fees or 20% of the ticket price. For a more detailed look at taxes and related topics, see the "Aviation Taxes and Fees" section of our Economics/Statistics page.
Q: What airports receive financial support from the Federal Aviation Administration and where does that financial support come from? How much money is involved, and what is it specifically used for?
A: The FAA dispenses grants to airports for Airport Improvement Program (AIP) projects. The funds for these grants are derived from the Aviation Trust Fund, and are allocated by the FAA based on formulas and funding levels mandated by Congress. In FY06, the AIP program received approximately $3.5 billion, about $1 billion of which went to non-commercial airports.
Airports must be listed in the NPIAS to be eligible to receive federal AIP grants. Commercial service airports receive entitlements based on the number of passengers enplaned, and can also apply for discretionary grants. Other NPIAS airports can apply for discretionary grants but do not receive entitlements.
Some AIP grants are distributed either through an entitlement program or through a discretionary program, but all grants must be used for infrastructure, not for operating expenses. AIP projects can address airport capacity, safety and security; they can also address noise conditions in the area immediately surrounding the airport. Most AIP grant funds are used for airfield improvements — construction and continued maintenance of runways and taxiways, airfield lighting, access roads, etc. — but they are also used for other federal mandates such as airport perimeter security, airport firefighting, snow removal equipment and replacement or enhancement of federal facilities such as instrument landing systems and control towers.
Q: Who pays for the design, construction and operation of airline terminals and related infrastructure (such as passenger parking lots) at major airports?
A: Local airport authorities typically take on the task of designing and constructing infrastructure such as airline terminals and parking lots. These items are paid for by the users of the facilities, the airlines and their passengers, through several funding sources, such as landing fees and terminal rents, PFCs, concessions and parking fees. Often, airports will issue revenue bonds, repaid through revenues paid by airport users and vendors principally via landing fees and terminal rents.
While operation of most airport facilities falls to the airport, passengers, shippers and airlines pay the bills. Operations and maintenance fees are typically charged back to the tenants in the form of rent. In the instances where passenger terminals are operated directly by airlines, the airlines foot the bill themselves. Except at some of the smaller commercial service airports, no general tax dollars are imposed for the construction, operation or maintenance of airport facilities.
Q: Who handles security at airports?
A: The Transportation Security Administration (TSA) is responsible for aviation security, including airport security. Airports and airlines cooperate with TSA in accordance with its rules and regulations. TSA has clear and rigorously enforced aviation security regulations affecting ramp and fuel facility access (including background checks), as well as screening of passengers, carry-on and checked baggage and cargo. TSA requires airports to provide security for airport perimeters or boundaries. Airport operators are responsible for securing appropriate local or airport law enforcement to meet this requirement.
Q: Who pays for TSA services?
A: TSA receives funding from three streams: 1) passengers pay a “9/11 Passenger Security Fee,” a ticket tax of $2.50 per flight segment with a maximum of $10 per round trip; 2) carriers pay an Aviation Security Infrastructure Fee, based on year 2000 domestic screening costs; 3) TSA also receives direct taxpayer support. Of the sectors overseen by TSA (including rail and pipelines), however, only airlines and their customers pay special taxes for its support.
Q: Where does the FAA come in?
A: The Federal Aviation Administration (FAA), an agency of the U.S. Department of Transportation (DOT), establishes and enforces all regulations related to airport operations and safety. The FAA is responsible for the safety of civil aviation and is instrumental in establishing safety standards for airports and, of course, airlines.
The FAA is also involved in air traffic management, developing and operating a system of air traffic control (ATC) and navigation for both civil and military aircraft. It is also involved in other, related projects including the research, engineering and development of procedures needed for a safe and efficient system of air navigation and ATC. The FAA operates a network of airport towers, air route traffic control centers and flight service stations across the country. The FAA also develops air traffic rules, assigns the use of airspace and controls air traffic. For information about the changes that ATA is asking Congress to address with respect to ATC management, see Smart Skies.
It is the FAA that administers both the Airport Improvement Program (AIP), which awards grants to airports, as well as PFCs, and monitors how these funds are used.