The holidays are fast approaching, and with millions of Americans expected to travel in the upcoming months, we are once again reminded that many of our nation’s airports are quite insufficient and lag behind competitors.
Airports serve as critical hubs for trade and tourism. Modernized and well-functioning airports attract businesses and stimulate local economies. They do so by creating jobs, and by making regions more attractive to airlines and travelers, which in turn boosts competitiveness compared to regions with less developed airway infrastructure.
Modernized airports also enhance connectivity. Tourism can be increased if travel becomes less challenging and more secure. Commerce can be improved for the simple fact that it is easier to ship and receive goods.
Investing in our nation’s airports ensures economic development, enhanced quality of life and a well-connected global economy.
Current state of America’s airways
Modern aviation was, by and large, developed in the United States, and the country has many of the busiest airports in the world. However, there is not one American airport that ranks in the top 25 airports worldwide.[1] Across the United States, the average airport terminal is more than 40 years old, and most are not built to handle the challenges associated with the current growth of air travel.[2]
In 2021, the backlog of planned and necessary improvements to airport infrastructure in the United States totaled at least $115 billion.[3] As of 2023, airport infrastructure needs have grown to around $151 billion over the subsequent five years.[4] Contributing to these costs is the lingering impact that the COVID-19 pandemic had on the aviation industry. The funding inconsistences that have plagued the industry make it unable to modernize facilities.
Investing in our airways
Investments to our airport infrastructure can help airports adapt to changing demands, such as increased passenger traffic or evolving safety regulations, ensuring they remain functional and relevant. Passenger safety remains of utmost importance, and investments in airport infrastructure also ensures that airports are equipped with modern technology and security infrastructure to create safe travel environments.
The Infrastructure Investment and Jobs Act of 2021, otherwise known as the Bipartisan Infrastructure Law, the “IIJA” and/or the “Act,” designated $25 billion to modernize America’s decaying airport infrastructure and to address repair and maintenance needs, reduce congestion and emissions and modernize our National Aerospace System.[5] The Act provides funding to be distributed by the Federal Aviation Administration through three major programs: $5 billion for facilities and equipment funding, $15 billion for the Airport Infrastructure Grant Program and $5 billion for the Airport Terminal Program.[6]
Historically, the FAA invested money in runways, air traffic-control towers and back-of-house infrastructure.[7] The Act focuses more on bettering the passenger experience, improving accessibility for passengers with disabilities and supporting sustainability while creating good-paying construction jobs.[8] Funds for these three programs will be for new baggage systems, larger security checkpoints, increasing gate capacity and modernizing aging infrastructure throughout terminals and ground transportation, among other things.[9]
The FAA has awarded four investments of nearly $1 billion through the Act as of October 2024, with hundreds of expected airport projects to begin construction across the nation.[10] Some of the grants recently awarded will increase access from airports to other modes of transportation, including improving roadways connecting airports to local communities, such as the $7.9 million granted to Buffalo Niagara International Airport in Cheektowaga, N.Y., to update the existing airport terminal circulatory roadway.[11]
Other grants have been awarded to airports to refurbish their airport-owned air traffic control towers, such as the $1.75 million grant to Rome Griffiss International Airport in Rome, N.Y., to update a 40-year-old, sponsor-owned Airport Air Traffic Control Tower, including upgrades to the HVAC, plumbing, roof, guardrails and windows, as well as communication, fire protection, electrical and security systems.[12]
There also is a renaissance of small American airports happening around the country, with this Act providing the necessary funding—both publicly and privately—on a more local level to revive the renovation and/or new construction of a number of small- and medium-size facilities.[13] This coincides with the population booms that second-tier cities are experiencing post-pandemic, and the trend of remote workers seeking out more affordable places to live.[14]
Implications for agency owners
By improving airport facilities nationwide, the increased air travel and cargo movement associated with it may result in higher demand for various types of insurance, including, but not limited to, travel insurance, cargo insurance and liability insurance for airlines and airport operators. As these facilities expand and are modernized, insurance agents and carriers may even be able to develop new products tailored to emerging needs, such as insurance for new technologies (e.g., drone operations) or services that are related to the management of the airport.
The price of insurance related to airports can change as well. Modernized infrastructure would include advanced safety and security measures, which would reduce the overall risk of accidents and incidents, thus lowering premiums and offering clients more favorable terms in the aviation industry.
Not to mention, updated airports can contribute to the economic stability in the region, which would impact the insurance market in a positive way. More businesses could be attracted to the region, thus providing insurance agents with greater opportunities to expand their client base.
Better airport infrastructure can create a more dynamic environment for insurance agents, leading to new opportunities and growth in the evolving landscape of aviation and transportation insurance.
The series …
PIA infrastructure series: Introduction
Infrastructure series: Bridge the gap: We need solid structures in a world without flying cars
Infrastructure series: Why broadband internet matters more than ever
Infrastructure series: Aviation initiatives are taking flight
[1] Building a Better America: A Guidebook to the Bipartisan Infrastructure Law for State, Local, Tribal, and Territorial Governments, and Other Partners
[2] The Trouble With Airports, and How to Fix Them
[3] ACI Airport Infrastructure Needs Study
[4] Ibid.
[5] Building a Better America: A Guidebook to the Bipartisan Infrastructure Law for State, Local, Tribal, and Territorial Governments, and Other Partners
[6] Ibid.
[7] Investing in America: Biden-Harris Administration Announces Nearly $1 Billion in Funding to Modernize Airport Terminals Across 46 States
[8] Ibid.
[9] Ibid.
[10] Ibid.
[11] Ibid.
[12] Ibid.
[13] Regional US Airports Are Back After Years of Decay
[14] Ibid.
Danielle Caswell, Esq.
Danielle Caswell joined PIA Northeast as associate counsel in the Government & Industry Affairs Department in 2023. She earned her bachelor’s degree from New York University and her law degree from Brooklyn Law School with a particular focus on intellectual property, information, and media law. Prior to joining PIA, Danielle was an associate at a law firm in New York City where she focused primarily on intellectual property and entertainment-related transactional and litigation matters.
