The United States has more than 19,000 airports, ranging from busy commercial service airports such as Hartsfield-Jackson Atlanta International Airport that enplanes millions of passengers annually, to small grass airstrips that serve only a few aircraft each year. Of these, roughly 3,300 airports are designated by FAA as part of the national airport system and are therefore eligible for federal assistance for airport capital projects. The national airport system consists of two primary types of airports— commercial service airports, which have scheduled service and board 2,500 or more passengers per year, and general aviation airports, which have no scheduled service and board fewer than 2,500 passengers. Federal law divides commercial service airports into various categories of airports, based on the number of passenger boardings, ranging from large hub airports to commercial service nonprimary airports (see fig. 1). The majority of passenger traffic occurs at large hub airports: almost 73 percent of all passengers in the United States boarded at the 30 large hub airports in 2015. The federal government provides grants to help fund airport capital development through its Airport Improvement Program (AIP). Congress appropriates funds for AIP and other FAA programs from the Airport and Airway Trust Fund (AATF), which is itself funded by a variety of aviation- related taxes, such as taxes on tickets, cargo, general aviation gasoline, and jet fuel. FAA’s tool for identifying airports’ future capital projects that are eligible for AIP grants is the National Plan of Integrated Airport Systems (NPIAS). FAA relies on airports, through their planning process, to identify individual projects for funding consideration. Federal law and FAA’s rules establish which types of airport development projects are eligible for AIP’s funding. Generally, most types of airfield improvements—such as runways, lighting, navigational aids, and land acquisition—are eligible. AIP-eligible projects for airport areas serving travelers and the general public—called “landside development”—include entrance roadways, pedestrian walkways and movers, and common space within terminal buildings, such as waiting areas. Hangars and interest expense on airport debt are not eligible for AIP grants. Some landside development projects—including revenue-producing terminal areas, such as ticket counters and concessions—are also ineligible. PFCs are another federally authorized source of funding that commercial airport sponsors can levy on passengers to help pay for capital development at national system airports. Commercial airports must designate which projects PFCs will fund and must seek and obtain FAA’s approval to charge a PFC. Funding for both AIP and PFCs is linked to passenger activity. In this way, Congress aimed to direct funds to where they are needed most. Airports also fund their development with state and local contributions as well as airport generated funds, such as income from airports’ tenants and commercial activities. Airport-generated revenue is typically used to finance the issuance of local debt such as tax-exempt bonds, which for larger commercial airports constitute more than half of their financing. Because of the size and duration of airport development—for example, planning, funding and building a new runway can take more than a decade and several hundred-million dollars to complete—long-term debt is used to help finance these types of projects. The FAA’s estimate of the costs for infrastructure development at airports over the next 5 years is about $32.5 billion compared to the airport industry’s estimate of almost $100 billion for the same period. In 2016, FAA estimated that airports have roughly $32.5 billion in planned development projects for the period 2017-2021, which represents a 3 percent, or $1 billion, decrease from its estimate for the 2015-2019 period. The FAA attributes the decline in capital development costs to a range of factors, including a reduction in current and future traffic relative to earlier predictions, the use and age of airport facilities, and costs related to changing aircraft technology. FAA reported a decrease in estimated costs for planned projects at most large and medium hubs, with increases at other hub types. For instance, according to the FAA, there is an increase in terminal projects at small airports, while FAA notes that many large and medium sized airports have terminal projects planned. Further, according to FAA’s analysis, airports will experience decreased demands for building new airside capacity, such as runways, to reduce delays. The airport industry’s estimate of 5-year planned development cost, as developed by Airports Council International-North America (ACI-NA), is three times FAA’s. ACI-NA’s most recent estimate of almost $100 billion in planned investment is a 32 percent increase over its 2015 5-year estimate of $75.5 billion. According to ACI-NA officials, of the nearly $100 billion in total planned development costs, $61 billion are for AIP-ineligible projects and $38.9 billion are for AIP-eligible projects (as compared to FAA’s $32.5 billion estimate), with most of the ineligible projects for terminal or landside improvements such as ground access. The percentage increase in planned development estimates is greatest for large hub airports, where estimated costs have increased more than 50 percent, from about $40 billion to about $60 billion in ACI-NA’s most recent estimate. For example, according to the latest ACI–NA report, the Los Angeles International Airport reported that its planned new development will cost about $10 billion between 2017 and 2021 for infrastructure projects. In contrast, most small airports reported single- digit increases in infrastructure costs, according to ACI-NA, although there are some exceptions. ACI-NA officials told us that a key driver for its increasing cost estimate is that airports have deferred some airport projects due to a lack of funding in the past. The principal reason why FAA’s and ACI-NA’s planned development costs differ so significantly is that the ACI-NA cost estimate encompasses substantially more projects than does FAA’s, according to ACI-NA. As we have previously reported, the ACI-NA uses AIP-eligible and AIP-ineligible projects to develop its estimates, while the FAA only uses AIP-eligible projects. Additionally, ACI-NA cost estimates are made up of projects that have already identified funding sources as well as those that have not. According to ACI-NA officials, 77 percent of the cost of planned development for large hub airports in their most recent cost estimate has funding already arranged. In contrast, FAA’s estimates only include projects without financing arranged. Additional reasons for differences in FAA’s and ACI-NA’s estimates are technical and methodological. First, the sources and methods for surveying information from the airports differ. FAA estimates are developed by reviewing information from airport plans that were available through 2015. The ACI-NA costs estimates are based on a survey of airports completed in 2017. Second, the FAA does not adjust its estimates for inflation, but the ACI-NA uses a 1.5 percent annual inflation adjustment. Without the inflation adjustment, ACI-NA’s estimate would drop $4.2 billion to $95.7 billion in constant 2016 dollars. Third, the ACI- NA estimate includes contingency costs for potential design changes, whereas FAA’s estimate does not. While FAA and ACI-NA cost estimates have long differed for the reasons outlined above, the most recent estimates diverge considerably, as shown in figure 2. The 5-year FAA estimate for 2017 through 2021 fell from the prior estimate to $32.5 billion, whereas ACI-NA’s estimate increased by $24.4 billion to $99.9 billion, or three times FAA’s estimate. In 2015, we estimated that in recent years national system airports had generated an average of $10 billion annually for capital development. These funds come from a variety of sources, as noted in figure 3. AIP grants: Since 2012, AIP authorizations have been unchanged, although the health of the AATF, which funds AIP, has improved. The AATF’s balance has recovered in recent years, ending fiscal year 2016 with an uncommitted balance of $5.7 billion and a cash balance of $14.3 billion. AIP grants must be used for eligible and justified projects, which are planned and prioritized by airports, included in their capital improvement plans, and reviewed and approved by FAA staff and the Secretary of Transportation. The distribution system for AIP grants is complex. It is based on a combination of formula grants—which are often referred to as “entitlement grants” within this program—that go to all national-system airports, and discretionary grants that FAA awards for selected eligible projects. In 2015, we reported that, for fiscal years 2009 through 2013, national-system airports received an average of $3.3 billion annually in AIP grant funding. Grant awards in fiscal year 2016 totaled almost $3.3 billion. PFC collections: Congress last raised the PFC cap in 2000 to $4.50 per flight segment, with a limit on the total PFCs that a passenger can be charged per round trip of $18 total. Large and medium hub airports that collect PFCs of $3 or less per flight segment have their AIP entitlement funding reduced by 50 percent; any of these airports that collect PFCs of more than $3 have their AIP entitlement funding reduced by 75 percent. Most of these AIP reductions to large and medium airports are distributed to smaller airports through the AIP. We found in 2015 that for fiscal years 2009 through 2013, commercial airports had an annual average of $1.8 billion of their PFC collections available for capital projects after deducting interest payments on debt. Ninety percent of that amount was collected by larger airports.