Airport Frequently Asked Questions -- Revenue Diversion

Airport Frequently Asked Questions

Revenue Diversion

The Issue

Proper use of airport revenue is vital to an airport's ability to be self-sustaining. Revenue that is derived from the airport and its activities must remain at the airport. Revenue that is being diverted to support non-aviation needs hinders the airport and the growth of aviation.

The Importance to Our Members

Revenue that is not being utilized properly impacts aviation in many ways. Airport tenants may be asked to pay higher rates and charges as a result of diverted revenue. The lack of funds could also impact much needed safety enhancements and capital improvement projects at the airport.

Key Issues and FAA Standards

In accordance to federal law, revenues generated by a federally obligated airport must be expended for the capital or operating costs of the airport. The reasons for this are evident. First, the federal government wants to protect its investment at the airport. Second, it is in everyone's interest to see an economically healthy airport that is able to operate efficiently. In addition, if an airport uses the revenue it generates according to the law, the balance between what the airport charges its users, and what they use is maintained. It would be totally unacceptable for an airport to increase its rates and charges to users and then use those increases in airport revenues to fund an off-airport, non-aeronautical project such as a city park.

Title 49 U.S. Code 47107 discusses important aspects on the authority for use of airport revenue, including statutory exemptions and special provisions for revenue use.

It is important to remember that revenue diversion is typically "alleged" and not an obvious finding in most cases. Cases such as these require in-depth investigations conducted by FAA and, when required or requested, by the Office of Inspector General (OIG) within the Department of Transportation. To view examples of OIG Audits, check the OIG's Web site.

If users believe that revenue diversion might be taking place, the FAA ADO should be alerted to the concern and a request should be made for the FAA ADO to inform the airport sponsor of their obligations and of the FAA policy on revenue diversion. Additional procedures regarding FAA's Airport Compliance program are in AOPA's Guide to FAA Airport Compliance.

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