Regulatory Alert: FAA Releases FY25 Allocations for Airport Infrastructure Grant Program
FAA Releases FY25 Allocations for Airport Infrastructure Grant Program
November 19, 2024
Today, the Federal Aviation Administration (FAA) released $2.89 billion in fiscal year 2025 (FY25) allocations for the Airport Infrastructure Grant (AIG) Program, which provides $15 billion for airport infrastructure upgrades over five years and was created by Congress through the Infrastructure Investment and Jobs Act (IIJA), known as the Bipartisan Infrastructure Law (BIL). The FY25 allocations represent the amount that each airport is entitled to use for any project that is eligible under the Airport Improvement Program (AIP) or Passenger Facility Charge (PFC) Program. Airports may also combine their FY22, FY23, FY24, and FY25 allocations to fund a single project.
You can view the FY25 AIG allocations here, which is a spreadsheet listing the amounts allocated to each airport. Keep in mind the formula used to calculate AIG allocations changed somewhat this year in comparison to the formula that was used for calculating AIG allocations in FY22 through FY24. This is discussed further below. Airports are encouraged to work with their local FAA offices to identify eligible projects and apply to use their allocated AIG funds. We understand that airports can begin applying to use their FY25 allocations as of today.
BIL Background. As airports are aware, the BIL provides an historic investment of $20 billion in new federal spending for airport infrastructure over a five-year period. FAA has developed three different programs to administer the funds:
- Airport Infrastructure Grant (AIG) Program: Under the AIG Program, FAA is making $15 billion in formula grants ($3 billion per year) available for airports to fund any eligible project under the AIP or PFC Program. Thus far, FAA has announced about $4.17 billion in grant awards under the program based on the approximately $8.7 billion in FY22, FY23, and FY24 allocations that were made available to airports over the past three years.
- Airport Terminal Program (ATP): Under the ATP, FAA is making $5 billion available in competitive grants ($1 billion per year) to fund projects for terminal development, on-airport rail access, or relocating, repairing, or improving an airport-owned air traffic control (ATC) facility. Last month, FAA announced $970 million in FY25 ATP grants that will fund 128 projects at 125 airports. ATP grants for the last year of funding, FY26, are expected to be awarded sometime in late calendar year 2025.
- FAA Contract Tower (FCT) Competitive Grant Program: Under the FCT Competitive Grant Program, FAA will be issuing $100 million in discretionary grants ($20 million per year) to fund projects that repair, improve, or replace an airport-owned FCT ATC tower. FAA is expected to announce $20 million in FY25 FCT Competitive Grant Program grants by the end of 2024. The agency received 82 applications requesting $191 million in funding that were submitted in September.
Changes to Formulas for Calculating FY25 AIG Allocations. Under the BIL, Congress directed FAA to calculate each year’s AIG allocations based, in part, on how FAA calculates entitlement funding under the Airport Improvement Program (AIP). In the FAA Reauthorization Act of 2024, however, Congress made changes to AIP, including adjusting the formulas for entitlement funding. These formula changes impacted how much primary airports received in FY25 AIG allocations in comparison to previous years (and will in FY26 as well). As explained in a recently released BIL FAQ guidance document, there are three major changes that were made to how FAA calculated the FY25 allocations:
- Use of Enplanement Data: For FY22 through FY24, FAA calculated AIG allocations based on the “best of” enplanement data from the previous three calendar years. However, beginning in FY25, FAA began using enplanement data based on the previous full calendar year. Calendar year 2023 enplanements were used for purposes of FY25 AIG allocations.
- Minimum Allocation Amount for Primary Airports: Based on the FAA reauthorization law, the minimum AIG allocation amount increased from $1 million to $1.3 million for FY25. This is consistent with the changes made to the minimum AIP entitlement amount.
- Allocations for Cargo Airports: Under the AIG allocation calculation, primary cargo airports receive an additional amount based on the AIP cargo entitlement formula. In the FAA reauthorization law, the threshold weight was reduced from 100 million to 25 million pounds of cargo for airports to qualify, and the allocation of funding for such airports increased (from 3.5 to 4 percent of AIG). In short, the change means qualifying cargo airports likely received an increased AIG allocation in comparison to previous years.
In terms of nonprimary airports, there were no changes to the calculation of AIG allocations. However, it is important to note that the calculation of AIG allocations for nonprimary airports is based on (a) the role of the nonprimary airport, as designated in the latest National Plan of Integrated Airport Systems (NPIAS) report, and (b) development costs for all airports within that role. In late September, FAA published its latest NPIAS report. A nonprimary airport’s AIG allocation may have been impacted if the airport’s role changed and/or based on the amount of development costs for all airports in that role.
Reduced Local Match for FY25 AIG Allocations. Based on a change included in the FAA reauthorization law, the federal share for FY25 AIG grants increased from 90 to 95 percent for nonhub and nonprimary airports. Conversely, the local match decreased from 10 to 5 percent for these airports. This same federal share increase will apply in FY26.
Reminder: Deadlines for Airports to Obligate AIG Funding. Under the AIG Program, FAA has now provided about $11.6 billion in funding allocations to airports over the first four years of the program. Each airport’s allocation represents the amount that each airport is entitled to use for a grant to fund any AIP or PFC eligible project. Airports may combine multiple years’ allocations to fund a single project. However, airports have four fiscal years to apply for and receive a grant(s) to use a specific year’s allocation of AIG funds.
For FY22 AIG allocations, which were the first years’ allocations under the program, an airport must ensure its share of allocations are under grant by the end of FY25, or September 30, 2025. To ensure the September 30, 2025, deadline is met, FAA has established the following deadlines:
- May 1, 2025: Deadline to notify FAA of the airport’s intent to use expiring FY22 AIG funds.
- June 30, 2025: Airports must submit an application, based on bids, to the FAA for AIG projects that would use expiring FY22 AIG funds.
- September 30, 2025: FAA and airports must ensure any expiring FY22 AIG funds are obligated, or under grant, for a specific project.
What’s Next? We have developed a one-page overview of the various grant programs and funds being administered by FAA, including relevant timelines, to help airports navigate the opportunities available for infrastructure funding. In the meantime, AAAE will continue to work closely with DOT and FAA on implementation to ensure that our airport members can access these grant funds with minimal burden and maximum flexibility.
