Despite some mixed signals early in 2025 about federal funding support for airport improvements, the skies were clearing by mid-year with an emerging broad consensus for historic levels of investment to improve airport infrastructure.
The Trump administration’s budget request that was sent to Congress called for multiple billions to modernize systems and facilities that comprise the U.S National Airspace System. Meanwhile, other influential voices were calling for this funding to shift from discretionary to mandatory spending. With this momentum, it seems likely that the ball will soon get rolling again for funding of projects falling both within and outside of channels traditionally overseen by the Federal Aviation Administration (FAA).
For decades, airports have received the bulk of funding for big ticket improvements under the Airport Terminals Program (ATP) and the Airport Improvements Program (AIP). These programs sometimes run in excess of a billion dollars and typically are slotted for major improvements like new or expanded terminals, runways and taxiways.
Airports now must identify funding for smaller — though equally critical — infrastructure projects. Such projects include central utilities, backup power, boilers, air handlers, chillers, water filtration and many types of basic infrastructure. A mix of federal, state and local agencies are likely to remain in play as funding sources for those needed improvements.
Beyond Business as Usual
In the first half of 2025, many sources of grants and loans were put on hold, as word went out that those funding opportunities would have to reflect the new presidential administration’s priorities.
The new focus shifts from investing in energy efficiency and sustainability to hardening facilities to withstand major risks to airport operations. The new priorities also reflect a greater focus on projects that positively impact local economic growth.
Shifting federal priorities signifies that it is time to recalibrate approaches that previously succeeded in obtaining funding for behind-the-scenes projects that aren’t in the category of mega-scale projects needed to land planes or move passengers. These core infrastructure upgrades and repairs — while typically a fraction of the cost of major programmatic capital improvements — are still vital to ongoing operations and resiliency of the facility.
Digging for Dollars
One strategy is to pivot toward less-obvious federal agencies as important sources of funding for essential aviation improvement programs. Grant and other types of funding from agencies like Homeland Security, the Department of Energy and others could increase the overall funding pie available to the aviation industry. The president’s budget proposal to Congress called for more than $1.1 billion in increased infrastructure spending.
These alternative funding pools outside of normal FAA channels may not be on the radars for many airport managers or governing boards. Funding is available from TIFIA (Transportation Infrastructure Finance and Innovation Act) credit assistance, as well as through Mega (National Infrastructure Project Assistance) grants, and a few other pockets available under the Infrastructure Investment and Jobs Act (IIJA). All these sources could soon become candidates for funding certain basic infrastructure improvements, with adjustments by the new administration.
These programs are all highly competitive, and success requires that the appropriate boxes are all checked with sufficient rationale that spells out a compelling case for the benefits the project will provide. Justifying a request simply on the basis that a utility plant, chiller or water line is beyond its intended design life, or that equipment is failing because of deferred maintenance, may not be the right strategy.
Applications should make a strong case that the improvements are needed for continued operations and to mitigate risks of service disruptions. A quantified cost /benefit analysis should project the anticipated operational and financial benefits of the proposed improvements against the estimated costs of projected equipment and construction.
Many sources of federal funds will require varying percentages of local or state matching funds, and the funds may be available in the form of grants or certain low-interest loans with 30- to 50-year terms. Some loans may be forgivable under certain conditions.
Collaborations among multiple jurisdictions — like city, county, or state agencies, along with airport authorities — will also be helpful. Establishing public-private partnerships (P3s) also creates a compelling narrative. As these partnerships are formed, make sure to stay in close contact with the local congressional delegation for additional insight and assistance in creating a full-court press after the application is filed.
It will also be worth looking ahead and giving some consideration to how the grant or loan will be administered over the life of the proposed project. An experienced grant administrator is invaluable in developing a clear strategy that spells out just when funds are needed. This important role will also help the airport remain in compliance with the respective federal agency requirements for validation and reporting of relevant spending and project outcomes.
Airports Are Economic Drivers
There has never been a real dispute about the value of airports to local and regional economies. Now, however, the playing field is clearly tilted even further toward rewarding projects that deliver the most economic value. Social and community value also will be created by airport improvements, and while data quantifying those benefits is nice, it will carry less weight than in years past.
Although installing a new chiller plant or backup power facility will never be as flashy as building two new passenger gates or adding another runway, such projects are equally vital to the overall economic health of the airport. The cost of customer dissatisfaction cannot be overlooked if a faulty air conditioning system makes travelers uncomfortable while waiting in lines or sitting at gates.
Though it remains to be seen just how the new application processes will change, it is highly unlikely that the overall aviation funding pie will shrink. The need for continued funding support of a critical industry like aviation will only grow.
The aviation industry is more complex than ever with critical infrastructure needs ranging from technology upgrades to fueling and passenger experience.
