Airport Funding Business & Marketing Research Paper

Airport Funding: Analysis
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Airport Funding
Air transport is one of the most preferred transportation modes as it is fast, reliable, and convenient. Today, most airports depend on some funding channels to sustain their operations. The largest percentage of funding is sourced from the federal government and other units within the government. In addition to federal funding, most airports also rely on other channels, including Airport Improvement Programs (AIP), programs outside the industry, and funding from private partnerships.
In the United States, the aviation system, for example, mainly relies on airports that provide passenger services. Each year, governments significant amounts of money in an attempt to expand airport infrastructure, yet the existing state of the infrastructure in most of the airports is still unsatisfactory (Wittman, 2014). The demand for additional funding in an attempt to improve the infrastructure in these airports is, therefore, high through the funding obtained from the federal governments is insufficient to sort out this problem. As a result, the governments are forced to impose heavy taxes on air tickets and cargo to efficiently provide funds to airports.
Funding from the federal and local governments can be utilized based on the organizational structure of airports, the existing options, and the mandates to be fulfilled. Locally owned airports depend on funding from the private or local funds, the money earned from airport operations, and to some extent, federal grants to conduct their operations.
Airport Improvement Programs (AIPs)
AIP is a type of grant established by the United States to fund airports and improve airport performance and security. This grant was created by the Airport and Airway Improvement Act of 1982 and is managed by the Federal Aviation Administration (FAA) (Suau-Sanchez et al., 2015). Money for this program is obtained through taxes on air tickets and fuel. AIP is one of the most common forms of funding for most airports globally. The program funds the airports and those benefitting from it pay for the offered services. The funding mainly targets civic organizations and caters for the expansion, upgrade, and servicing public airports.
The program is central to the aviation industry as it affords to fund to both the private and public airports. However, the funds provided by the program are mainly used in the expansion of public airports. Expansion and maintenance of airports require resources, and this program caters for the cost to improve the services delivered to passengers. Airports can be categorized into commercial service, primary and non-primary, cargo service, reliever, and general aviation airports. The public mainly owns Non-primary airports. Primary airports deliver services to over 10,000 customers yearly. Cargo service airports, mainly transport goods while reliever airports serve to reduce congestion in commercial serviced airports. General aviation airports, mainly provide services to general aviation aircraft (Graham & Morrell, 2016).
The funding from the AIP grants is dispersed in three ways. The first channel is the entitlement grants given to cargo service airports, primary airpor...