FAA Reauthorization Act of 2024

A. Introduction

The FAA Reauthorization Act of 2024, enacted as Public Law 118-63 and signed on May 16, 2024, represents a comprehensive authorization of nearly $105.5 billion in federal aviation funding through Fiscal Year 2028. This five-year authorization cycle establishes critical parameters for airport infrastructure investment, Federal Aviation Administration operations, and the National Airspace System modernization.

For airport finance professionals, this reauthorization carries substantial significance in extending authority for key programs, as evidenced by the $105.5 billion in funding through FY2028 (Public Law 118-63). It extends the authority for the Airport Improvement Program (AIP) and the Airport and Airway Trust Fund collection authority, establishes reformed provisions for Passenger Facility Charges (PFCs), addresses airport cybersecurity and infrastructure resilience requirements, and introduces new funding mechanisms for airport safety and sustainability initiatives. This legislation shapes airport capital planning, revenue forecasting, bond feasibility studies, and operational budgeting for the next four years.

B. Funding Authorization

B.1 Overall Funding Distribution

The total $105.5 billion authorization across FY2025–FY2028 breaks down as follows:

• Federal Aviation Administration operations and research: $66.7 billion

• FAA facilities, equipment, and improvements: $17.8 billion

• Airport infrastructure grants (AIP entitlements, ASRID, and other airport programs): $19.4 billion

• Research, engineering, and development: $1.6 billion

Note: The $19.4 billion airport authorization includes AIP entitlement grants ($16 billion for FY2025–FY2028 at $4 billion annually), the new ASRID discretionary program ($200 million annually), and other airport-specific initiatives. This distribution reflects a policy commitment to both modernizing the National Airspace System and investing in airport infrastructure as the foundation of that system's capacity and safety.

B.2 Airport Improvement Program (AIP) Provisions

Title VII of the reauthorization expands and refines the Airport Improvement Program by increasing entitlements to $4 billion annually for FY2025–FY2028 (up from $3.35 billion prior authorization) ($16 billion total through the authorization period):

• AIP entitlements: $4 billion annually for FY2025–FY2028, an increase from $3.35 billion (prior authorization).

• Expanded eligible projects: New categories of projects can compete for AIP funds, including airport safety and climate resilience infrastructure, multimodal ground transportation connections, and terminal modernization.

• Updated federal cost share: The act modifies federal participation rates for various project categories, recognizing capacity differences at large hub, medium hub, small hub, and non-hub airports.

• Small airport fund: Dedicated discretionary funding ensures rural and smaller airports maintain access to development capital.

• Letters of Intent (LOIs): Clarified multiyear commitment mechanisms allow airports to plan phased capital projects with greater financial certainty.

• AIP handbook update requirement: The FAA must issue an updated handbook clarifying eligible projects, cost-sharing methodologies, and environmental review procedures.

• Airport Safety and Resilient Infrastructure Discretionary Program (ASRID): A new discretionary program focused on airport safety enhancements and climate resilience projects.

B.3 Revenue Diversion Penalties

Section 703 of the reauthorization enhances penalties for violations of the revenue diversion prohibition (49 U.S.C. § 47107(b)). Airports pledging revenues—whether from PFC collections, landing fees, or other aviation revenues—to general fund uses face escalating civil penalties and potential loss of federal grants. This provision reinforces the integrity of airport financial covenants and bond documents.

C. Passenger Facility Charge (PFC) Provisions

C.1 PFC Turnback Reduction (Section 713)

One of the key changes for large and medium hub airports is the reduction of the PFC-AIP offset (often called "PFC turnback"):

Prior Rule: Under the PFC-AIP offset, airports imposing PFCs above $3.00 were required to forfeit 75 cents of their AIP formula entitlement apportionment for every dollar of PFC revenue above $3.00. This did not involve returning PFC collections; rather, it reduced AIP entitlement grants to offset higher PFC burdens on passengers.

New Rule (Sec 713): Section 713 of the FAA Reauthorization Act of 2024 (PL 118-63) reduced this AIP offset from 75% to 60%. Airports that impose PFCs above $3.00 now forfeit only 60 cents of AIP entitlement apportionment per dollar of PFC revenue above $3.00, providing airports approximately 15% more in combined PFC and AIP funding.

Financial Impact: For a large hub airport with 50 million enplanements annually imposing a $4.50 PFC (the statutory maximum), this reduction improves combined PFC and AIP revenue. Based on DWU's analysis of historical AIP and PFC data from 2019–2024, this reduction could yield $20–60 million annually in additional combined funding, assuming stable passenger volumes and collection rates (DWU model, February 2026), depending on the airport's baseline AIP entitlement.

Interaction with AIP: Based on Public Law 118-63 and historical PFC data, incremental revenue may support capital programming, subject to airport-specific factors and applicable cost allocation rules, potentially reducing reliance on debt financing and affecting debt service coverage ratios.

C.2 PFC Cap—What Did Not Change

The statutory PFC cap remains at $4.50 per passenger enplanement. This proved contentious:

• According to ACI-NA's 2024 policy statements, airport industry groups advocated for elimination of the cap or inflation adjustment to approximately $7.00–$8.00 in 2024 dollars.

• Airlines, as represented by Airlines for America in their 2024 congressional testimony, opposed any increase, arguing that existing charges are sufficiently burdensome.

The unchanged cap masks purchasing power erosion. The $3.00 PFC cap was established in 1990 under the Aviation Safety and Capacity Expansion Act (PL 101-508). The $4.50 cap was established in 2000 by the AIR-21 legislation (PL 106-181). Since 2000, the $4.50 cap in 2000 dollars equates to approximately $5.50 in 2024 dollars based on inflation data from the U.S. Bureau of Labor Statistics. The failure to adjust for inflation effectively reduces the real authority available to airports, offsetting some gains from the turnback reduction.

C.3 PFC Regulation Update

The FAA issued a Notice of Proposed Rulemaking in September 2023 to update and clarify PFC regulations under 14 CFR Part 158. This rulemaking addresses:

• PFC use provisions and eligible project categories (per 49 U.S.C. § 40117(a)(3))

• Documentation and audit procedures for PFC accounts

• Streamlined approval procedures for routine PFC increases and projects

• Interaction between PFC revenues and other federal grants (AIP, ASRID)

The final rule is expected in 2025 and will supersede existing guidance, requiring finance teams to update rate-setting models, bond offering documents, and capital programming procedures in response.

D. Airport Infrastructure Provisions (Title VII)

D.1 Key Legislative Sections

• Section 702: Definitions of airport infrastructure, safety projects, and resilience initiatives

• Section 708: Updated federal cost share methodologies based on airport classification

• Section 709: Allowable costs and Letters of Intent framework

• Section 710: Small airport Letters of Intent provisions

• Section 714: ASRID program authorization and administration

• Section 716: Small airport fund discretionary allocation

• Section 733: Requirement for updated AIP handbook

D.2 Airport Safety and Resilient Infrastructure Discretionary Program (ASRID)

The ASRID program is a new discretionary funding stream within Title VII focusing on:

• Taxiway and runway safety enhancements (RSA improvements)

• Airport drainage and flood resilience projects

• Sustainable aviation fuel (SAF) production or blending infrastructure

• Electric or hydrogen aircraft charging/refueling infrastructure

• Cybersecurity and information technology hardening

ASRID grants are not entitlements; they are awarded competitively by the FAA on a fiscal year basis. Airports may evaluate incorporating ASRID opportunities into capital plans and may coordinate with state aviation offices on regional and statewide project priorities.

D.3 Environmental and Sustainability Provisions

The reauthorization emphasizes environmental compliance and sustainability:

• Airports must comply with the National Environmental Policy Act (NEPA) and state environmental review requirements as conditions of AIP and ASRID grants.

• Environmental Justice provisions require consultation with underserved communities near airports.

• Sustainability reporting by airports receiving federal grants includes carbon footprint, energy efficiency, and resilience metrics.

Finance teams should anticipate that future federal grant applications will require robust sustainability and environmental impact data, necessitating systems to track energy use, emissions, and climate adaptation efforts.

E. Cybersecurity Provisions

E.1 FAA Cybersecurity Leadership (Section 217)

The reauthorization establishes a new position of FAA Cybersecurity Leadership with specific responsibilities:

• Coordinate agency-wide cybersecurity policy and incident response

• Brief Congress semiannually on cybersecurity threats to the National Airspace System

• Develop minimum standards for airport, aircraft, and air traffic control facility cybersecurity

Implications for airports: Enhanced federal oversight may translate into mandatory cybersecurity standards, audit requirements, and incident reporting obligations, based on historical FAA rulemaking patterns from 2020–2025. Finance and IT leadership may collaborate to budget for cybersecurity infrastructure upgrades, insurance, and staff training.

E.2 Aircraft Cybersecurity Standards (Section 392)

The act directs the FAA to establish minimum cybersecurity standards for aircraft, engines, propellers, and avionics. These standards apply to new certifications and modified aircraft and will influence airframe and system manufacturers' design and testing requirements.

E.3 National Airspace System Cyber Threat Management (Section 393)

A new management process for NAS-wide cybersecurity threats requires:

• Regular vulnerability assessments of air traffic control automation and communication systems

• Coordination between FAA, airports, and air traffic service providers

• Incident reporting and threat information sharing

E.4 Avionics and Related Screening (Sections 394–396)

• Regular screening and testing of avionics equipment for vulnerabilities

• Establishment of an Aviation Rulemaking Committee (ARC) to develop avionics security standards

• GAO study and report on avionics cybersecurity framework and implementation timeline

F. Organizational and Operational Changes

F.1 Administrator Qualifications

The reauthorization modifies qualifications for the FAA Administrator:

• Must not be an active duty or retired military officer (addressing prior concerns about military influence in civilian aviation policy)

• Must have significant aviation management and policy experience

• Must demonstrate commitment to modernizing the National Airspace System and supporting airport infrastructure

F.2 Rulemaking Reform: New Assistant Administrator for Rulemaking and Regulatory Improvement

A new FAA position oversees strategic rulemaking initiatives, harmonization with international standards, and stakeholder engagement. This change seeks to reduce rulemaking timelines and improve transparency, with implications for airports monitoring regulatory developments affecting PFCs, AIP eligibility, and safety standards.

F.3 Airspace Modernization and NextGen Transition

• NextGen Office Sunset: The separate FAA NextGen office will sunset by December 31, 2025, with responsibilities transferred to the new Airspace Modernization Office.

• Automation Focus: The Airspace Modernization Office emphasizes automation, separation management, and AI applications to increase system capacity without proportionally expanding physical infrastructure.

• New Entrant Accommodation: Explicit mandate to integrate unmanned aircraft systems (UAS) and advanced air mobility (AAM) operations into the National Airspace System, requiring airports to develop policies and procedures for commercial drone and electric vertical takeoff aircraft (eVTOL) operations.

G. Government Accountability Office (GAO) Oversight

The reauthorization assigns 36 statutory study and reporting requirements to the GAO. Key areas include:

• Air Traffic Control modernization progress and legacy IT challenges

• Safety culture and accident prevention initiatives

• Staffing and workforce development for controllers, inspectors, and technicians

• Regional aviation economic impacts

• Airport funding equity and distribution of federal grants

Additionally, the GAO is tracking approximately 50 open recommendations to the FAA from prior audits. These studies and the subsequent FAA responses will inform budget discussions, policy changes, and congressional oversight through 2028. Airports should monitor GAO reports for findings relevant to their operational and financial planning.

H. Implications for Airport Finance

The FAA Reauthorization Act of 2024 reshapes airport financial planning across multiple dimensions:

Capital Programming and Entitlements

With $19.4 billion in AIP authorized through FY2028 and new ASRID discretionary funding, airports may consider updating capital improvement plans to identify runway, taxiway, terminal, utility, and sustainability projects likely to qualify for federal support. Entitlement AIP allocations provide baseline funding; applications for discretionary funds (including ASRID) should be competitive and strategically prioritized.

PFC Revenue Forecasting

The reduced turnback rate (60% for PFCs above $3.00) improves net PFC collections for airports with higher charges. Finance teams may wish to reflect this change in updated financial models and project incremental revenues for capital planning and debt service. Conversely, the failure to adjust the $4.50 cap for inflation moderates the upside to PFC revenue over the authorization period.

Bond Feasibility and Debt Structuring

Based on EMMA bond data and Public Law 118-63, enhanced federal revenue stability from increased AIP/ASRID allocations and improved PFC retention may support larger debt financings or longer amortization periods depending on airport-specific credit conditions. Feasibility studies should reflect both the baseline entitlement AIP and expected ASRID competitively awarded grants, with sensitivity analyses for different funding scenarios.

Cybersecurity Compliance and IT Budgeting

New cybersecurity standards and FAA oversight will likely mandate infrastructure upgrades, staffing, and audit costs. Airports should budget for cybersecurity assessments, remediation, and ongoing monitoring. IT teams must coordinate with finance to embed cybersecurity capital and operating expenses in five-year and ten-year capital plans.

Environmental and Sustainability Reporting

Federal grants have required sustainability metrics, environmental compliance documentation, and resilience planning in recent cycles, as seen in AIP grants from FY2023–2025. Airports should establish systems to track energy use, carbon emissions, water management, and climate adaptation measures. These data support grant applications and bond investor demand for ESG (environmental, social, governance) transparency.

Rate-Setting and Fee Structure

With PFC turnback reduced and new infrastructure grant opportunities, airports have greater financial flexibility in rate setting. However, competitive pressures and airline negotiations remain. Finance teams should model various scenarios for landing fees, terminal rents, cargo fees, and parking charges under different PFC and AIP funding assumptions.

I. Summary of Provisions

• $105.5B authorization (FY2025–FY2028): FAA operations ($66.7B), facilities ($17.8B), AIP ($19.4B), and R&D ($1.6B).

• PFC turnback reduced from 75% to 60% for airports charging above $3.00, improving net revenue for large hubs.

• PFC cap remains $4.50 (unadjusted for inflation), representing real purchasing power erosion since 2000.

• AIP expanded: new project categories, updated cost shares, enhanced Letters of Intent, and AIP handbook refresh required.

• ASRID program: new competitive discretionary funding for airport safety and climate resilience projects.

• Cybersecurity: new FAA leadership position and mandatory minimum standards for airports and aircraft.

• NextGen Office sunset (end 2025); transition to Airspace Modernization Office with emphasis on automation and new entrants (UAS, AAM).

• FAA Administrator qualification reforms: no active/retired military, must have aviation management experience.

• 36 GAO studies and 50 open FAA recommendations drive oversight and potential policy changes through 2028.

• Airport finance implications: stronger entitlements support, improved PFC retention, competitive discretionary opportunities, and new cybersecurity and sustainability compliance costs.

J. Resources and References

• Congress.gov—Public Law 118-63: https://www.congress.gov/bill/118th-congress/house-bill/3935

• FAA Reauthorization Page: https://www.faa.gov/about/reauthorization

• FAA Cybersecurity Leadership: https://www.faa.gov/about/office_org/headquarters_offices/ato/cso

• GAO Report: FAA Reauthorization and Open Recommendations (GAO-25-108502): https://www.gao.gov/products/gao-25-108502

• ACI-NA (Airports Council International—North America): https://www.aci-na.org

• FAA Airport Finance Portal (AIP, PFC, ASRID guidance): https://www.faa.gov/airports/aip

This document was prepared by DWU Consulting LLC on February 16, 2026, based on the text of Public Law 118-63, FAA guidance, and publicly available legislative and regulatory materials. It is not a legal opinion and does not constitute official FAA guidance. Airports should consult with their own legal, financial, and engineering advisors to assess specific implications of the reauthorization for their organization.

Scope & Methodology

This article analyzes the FAA Reauthorization Act of 2024 (Public Law 118-63), focusing on provisions most relevant to airport finance practitioners. Analysis draws on the enacted statute text, Congressional Research Service reports, FAA implementation guidance, and GAO oversight reports. Financial impact estimates reflect DWU Consulting's professional assessment based on historical AIP and PFC program data. Readers should consult qualified professionals for application to specific airport situations.

Changelog

FAA Regulatory Resources

The following FAA resources provide authoritative guidance on the FAA Reauthorization Act of 2024:

• Grant Assurances updated April 2025 — Incorporate PL 118-63 provisions
• AIP page — Reflecting Reauthorization impacts on grant programs
• PFC program page — Reflecting Reauthorization changes to turnback provisions

ACRP Research Resources

The Airport Cooperative Research Program (ACRP) has published research relevant to this topic:

• Report 121 — Innovative Finance and Alternative Sources of Revenue for Airports (2014). Background on federal funding mechanisms affected by reauthorization.

Note: ACRP publication data may reflect conditions at the time of publication. Readers should verify current applicability.

Related DWU AI Articles

• Airport and Airway Trust Fund
• Airport Improvement Program
• Passenger Facility Charges
• Airport Capital Funding and the Infrastructure Gap
• Grant Assurance Compliance