Aviation Orgs Warn of Danger of Trust Fund Depletion

 - April 14, 2020, 12:50 PM

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.


The aviation industry is increasingly becoming concerned that the Airport and Airway Trust Fund (AATF) is in danger of depletion as an unintended consequence of the recently adopted CARES Act and the ongoing ramifications of Covid-19 restrictions. Nineteen aviation organizations wrote House and Senate leaders urging them to act to protect the continued solvency of the AATF.

“The tax holiday on passenger tickets, cargo, and fuel for the remainder of 2020 under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) may help serve as a catalyst to increase demand and support the industry once the immediate pandemic crisis has passed,” said the April 9 letter signed by a cross-section of industry. “But, the significantly reduced demand and associated tax revenue from passenger tickets and jet fuel prior to the CARES Act along with the tax holiday will most certainly lead to the insolvency of the Airport and Airway Trust Fund.”

The Aircraft Owners and Pilots Association, which is among the organizations that signed the letter, noted the aviation tax-funded AATF had a healthy cash balance of $17.9 billion at the beginning of fiscal 2020. Of that $6 billion was uncommitted—or not designated for any specific spending. Under the current scenario, preliminary FAA estimates are that the cash balance will drop to $7.8 billion, with the uncommitted balance reaching a negative $3.5 billion by the end of the fiscal year, AOPA said. At the same time, the AATF is to cover nearly all of the FAA’s budget.

“Given the seriousness of the situation, we appreciate your attention to this matter and look forward to working with Congress to develop a solution to ensure the continued solvency of the Airport and Airway Trust Fund,” the letter concluded.