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GAO-22-104429, COVID-19 PANDEMIC: Observations on the Ongoing Recovery of the Aviation Industry

Issuer
Government Accountability Office
Document type
Report
Date
2021-10-21

Report — GAO-22-104429, COVID-19 PANDEMIC: Observations on the Ongoing Recovery of the Aviation Industry, dated 2021-10-21, issued by Government Accountability Office.

Full text

                United States Government Accountability Office
                Report to Congressional Addressees




                COVID-19
October 2021




                PANDEMIC

                Observations on the
                Ongoing Recovery of
                the Aviation Industry




GAO-22-104429
                                              October 2021

                                              COVID-19 PANDEMIC
                                              Observations on the Ongoing Recovery of the
                                              Aviation Industry
Highlights of GAO-22-104429, a report to
congressional addressees




Why GAO Did This Study                        What GAO Found
International flight restrictions, local      The COVID-19 pandemic severely affected the aviation and aerospace sectors
stay-at-home orders, and a general            that depend on commercial passenger travel. As demand for air travel
fear of contracting and spreading             plummeted and remained low throughout 2020, effects cascaded across sectors
COVID-19 through air travel had a             including U.S. passenger airlines, airports, aviation manufacturers, and repair
sudden and profound effect on the             station operators. For example, in response to reduced demand, airlines parked
U.S. aviation industry. According to          or retired a substantial portion of their aircraft fleet, which, in turn, reduced
Department of Transportation (DOT)            demand for aircraft maintenance services.
statistics, passenger traffic in April
2020 was 96 percent lower system-             Aircraft Temporarily Stored at Denver International Airport in 2020
wide than April 2019, and remained 60
percent below 2019 traffic levels
throughout 2020.
This report examines (1) immediate
effects of the COVID-19 pandemic on
businesses across the aviation
industry; (2) actions those businesses
took in response; (3) actions the FAA
took to help the industry respond to the
pandemic; and (4) the outlook for
industry recovery, among other issues.
                                              In response to the pandemic’s effects, aviation stakeholders reported that they
GAO reviewed DOT airline operational          acted quickly to mitigate financial losses and position themselves to maintain
and financial data from calendar years        business viability until demand increased. Stakeholders’ actions included:
2019 through 2020, financial
statements from various aviation-                 •    managing costs, such as by implementing early retirement programs;
related businesses, FAA regulations               •    raising funds in the private market to increase liquidity; and
and operational guidance, and industry            •    taking steps to mitigate COVID-19’s spread among employees and
recovery forecasts. GAO conducted a                    customers.
generalizable survey of 1,136 smaller
airports. GAO also interviewed officials      Stakeholders also noted the importance of the over $100 billion in payroll support
from FAA and representatives from a           payments, loans, and other financial assistance provided through COVID-19
judgmental sample of 47 aviation and          relief legislation.
aerospace industry stakeholders
selected based on location and
                                              The Federal Aviation Administration (FAA) reported taking quick action to help
industry sector.                              the aviation industry adjust operations in response to the pandemic. These
                                              actions included providing temporary relief from some regulatory requirements—
What GAO Recommends                           such as airline crewmember medical certifications—and issuing guidance to
                                              airlines and airports on mitigating COVID-19 risks. FAA has phased out many of
GAO continues to urge Congress to
                                              these relief measures.
take legislative action to require DOT
to work with relevant agencies,               Although airlines experienced a rebound in demand for U.S. leisure travel in
stakeholders, and members of the              2021, operational challenges and concerns about the COVID-19 Delta variant
aviation and public health sectors to         have slowed recovery. Forecasts suggest that industry recovery will be uneven
develop a national aviation-                  as business and international air travel—the most profitable segments—are likely
preparedness plan for communicable            to lag. Stakeholders identified areas of concern for policymakers to consider,
disease threats.                              such as strengthening aviation workforce pipelines, as they determine how or
                                              whether to continue to assist the industry in evolving market conditions. Further,
View GAO-22-104429. For more information,
contact Heather Krause at (202) 512-2834 or
                                              developing a national aviation-preparedness plan for communicable disease, as
krauseh@gao.gov.                              GAO recommended, would provide greater coordination among federal and
                                              industry stakeholders and help better prepare the U.S. for future pandemics.

                                                                                             United States Government Accountability Office
Contents


Letter                                                                                   1
               Background                                                                4
               The COVID-19 Pandemic Had Disparate Effects on Selected
                 Aviation and Aerospace Sectors in 2020                                12
               Aviation and Aerospace Stakeholders Responded to the
                 Pandemic’s Effects by Taking a Variety of Actions to Maintain
                 Business Viability                                                    21
               FAA Provided Airlines and Other Aviation Sectors Temporary
                 Relief from Some Regulatory Requirements and Selected
                 Stakeholders Said the Changes Were Helpful                            36
               The Extent of Industry Recovery Remains Uncertain and
                 Stakeholders Identified Considerations for Potential Federal
                 Support                                                               41
               Agency Comments                                                         50

Appendix I     Objectives, Scope, and Methodology                                      55



Appendix II    Survey of Smaller Airports                                              63



Appendix III   GAO Contact and Staff Acknowledgments                                   87



Tables
               Table 1: Federal Aviation Administration (FAA) Pandemic Relief
                       Actions, March 2020-July 2021                                   37
               Table 2: Selected Aviation and Aerospace Industry Stakeholders
                       GAO Interviewed                                                 56
               Table 3: Description of the Sample Frame, Stratification, and
                       Sample Sizes for the Stratified Random Sample of
                       Smaller Airports                                                59
               Table 4. The Population Size and Distribution of Smaller Airports
                       by Survey Strata                                                64




               Page i                                       GAO-22-104429 COVID-19 Pandemic
Figures
          Figure 1: Commercial Airport Categories for U.S. Airports                6
          Figure 2: TSA-Screened Passengers, CDC-Reported COVID-19
                   Cases, and Selected Key Events during the COVID-19
                   Pandemic (January 2020 through March 2021)                    11
          Figure 3: U.S. Airline Passenger Traffic, Percentage Change 2019
                   versus 2020, by Type                                          13
          Figure 4: Parked Aircraft Temporarily Stored at Denver
                   International Airport                                         24
          Figure 5: Sign at Hartsfield-Jackson Atlanta International Airport
                   with COVID-19 Requirements and Reminders                      35




          Page ii                                     GAO-22-104429 COVID-19 Pandemic
Abbreviations

A4A               Airlines for America
AMTS              Aviation Maintenance Technician School
ARC               Airlines Reporting Corporation
ARSA              Aeronautical Repair Station Association
BLS               Bureau of Labor Statistics
BTS               Bureau of Transportation Statistics
CARES             Coronavirus Aid, Relief, and Economic Security
CDC               Centers for Disease Control and Prevention
COVID-19          Coronavirus Disease 2019
DHS               Department of Homeland Security
DOT               Department of Transportation
EAS               Essential Air Service
FAA               Federal Aviation Administration
FBO               fixed base operator
HHS               Department of Health and Human Services
NPIAS             National Plan of Integrated Airport Systems
OEM               original equipment manufacturer
PFC               passenger facility charge
PPP               Paycheck Protection Program
PSP               Payroll Support Program
SCASDP            Small Community Air Service Development Program
SEC               Securities and Exchange Commission
SFAR              Special Federal Aviation Regulation
Treasury          Department of the Treasury
TSA               Transportation Security Administration
UAS               uncrewed aircraft systems


This is a work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may contain
copyrighted images or other material, permission from the copyright holder may be
necessary if you wish to reproduce this material separately.




Page iii                                               GAO-22-104429 COVID-19 Pandemic
                       Letter




441 G St. N.W.
Washington, DC 20548




                       October 21, 2021

                       Congressional Addressees

                       The Coronavirus Disease 2019 (COVID-19) pandemic has resulted in
                       catastrophic loss of life and substantial damage to the global economy.
                       The global aviation industry was among those most severely affected.
                       International flight restrictions, local stay-at-home orders, and a general
                       fear of contracting and spreading COVID-19 through air travel had a
                       sudden and profound effect on the global aviation industry, including
                       passenger airlines, airports, and the entire ecosystem of businesses that
                       supply, manufacture, and repair commercial and general aviation aircraft.

                       According to Bureau of Transportation Statistics (BTS) data, U.S. airline
                       passenger traffic was down 60 percent system-wide in 2020 compared to
                       2019 traffic levels. 1 The ripple effect from this unprecedented and
                       sustained reduction in demand throughout 2020 has affected airline
                       business models, employment, and the entire aviation supply chain. 2 In
                       response to the pandemic, the Coronavirus Aid, Relief, and Economic
                       Security (CARES) Act and subsequent COVID-19 relief laws appropriated
                       over $100 billion to provide financial assistance to the U.S. aviation
                       industry and its workers. 3

                       You asked us to conduct a broad review to gather input from a wide
                       range of stakeholders, including airlines, airports, aviation labor, general
                       aviation users, commercial space companies and others, on several key

                       1BTS is the Department of Transportation’s source for commercial aviation, multimodal
                       freight activity, and transportation economics.
                       2For example, according to the Bureau of Labor Statistics (BLS), as of April 2021—the
                       most recent data available—an estimated 136,400 jobs in the air transportation and
                       support activities sectors—approximately 22 percent—have been lost since peak
                       employment levels of 755,400 in February 2020, although employment has risen roughly 7
                       percent since October 2020. According to BLS, the air transportation sector includes
                       scheduled air carriers that fly regular routes on regular schedules and operate even if
                       flights are only partially loaded, and non-scheduled carriers that provide chartered air
                       transportation of passengers, cargo, or specialty flying services and often operate at
                       nonpeak time slots at busy airports. Among other things, the support activities for air
                       transportation sector includes airport operations and air traffic control.
                       3CARES Act, Pub. L. No. 116-136, §§ 4003, 4112, 134 Stat. 281, 470, 498 (2020);
                       Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, div. N, tit. IV, 134 Stat. 1182,
                       2052-61 (2020); American Rescue Plan Act of 2021, Pub. L. No. 117-2, § 7301, 135 Stat.
                       4, 104-107.



                       Page 1                                                  GAO-22-104429 COVID-19 Pandemic
issues related to the industry and federal response to the COVID-19
pandemic, including:

•   the effects of the COVID-19 pandemic on selected aviation and
    aerospace industry sectors in 2020;
•   actions selected aviation and aerospace stakeholders took in
    response to the pandemic;
•   actions taken by the Federal Aviation Administration to help the
    aviation industry respond to the pandemic, and selected aviation
    stakeholders’ perspectives on those actions; and
•   the outlook for aviation industry recovery, and stakeholder
    considerations for potential federal support in assisting the aviation
    industry in the future.

To identify the effects of the pandemic on selected aviation industry
sectors and their respective responses to the pandemic, we analyzed the
Department of Transportation’s (DOT) Form 41 financial and operational
data for calendar years 2019 and 2020. We determined that these data
were sufficiently reliable for the purposes of our reporting objectives by
reviewing the quality control procedures used by DOT. We also analyzed
financial statements reported to the Securities and Exchange
Commission (SEC) by publicly-traded airlines and other aviation-related
businesses from the first quarter through the fourth quarter of 2020 to
obtain quantitative information on their financial performance, as well as
qualitative descriptions of the impact of the pandemic on businesses and
actions those businesses took in response. 4 We reported on the
immediate effects of the pandemic based on the expectation that other
effects will be long-term. We conducted interviews with a judgmental
sample of 47 aviation and aerospace industry stakeholders—including
passenger airlines, cargo airlines, large and medium hub airports, and
aviation manufacturers—on the effects of the COVID-19 pandemic on




4The four quarters cover the 12 months of calendar year 2020.




Page 2                                               GAO-22-104429 COVID-19 Pandemic
selected aviation and aerospace industry sectors and actions
stakeholders took in response. 5

We also conducted a generalizable, web-based survey of smaller
airports— including small hub, non-hub, non-primary commercial service,
general aviation, and reliever airports—to identify the effects of the
pandemic on these airports and actions they took in response. 6 The
survey response rate was 72 percent. 7 Estimates generated from these
survey results are generalizable to the target population of 2,752 smaller
airports in the continental U.S. 8

To identify the actions the Federal Aviation Administration (FAA) took to
help the aviation industry respond to the pandemic, we reviewed requests
for regulatory relief submitted to FAA by aviation stakeholders and FAA’s

5We selected aviation and aerospace industry stakeholders to represent a cross-section
of sectors within the aviation and aerospace industries as well as based on geographic
representation. The stakeholders we selected include an analytics and engineering firm; 9
industry associations; 2 aviation labor organizations; 6 passenger airlines; 3 cargo airlines;
5 aviation manufacturers; 3 repair station operators; 11 large and medium hub airports; 2
commercial space launch providers; 3 credit rating agencies, and 2 aviation industry
analysts.
6We conducted the survey from November 16 through December 11, 2020. We used a
sampling frame of 2,752 airports (64 small hub, 209 non-hub, 63 non-primary commercial
service, and 2,416 general aviation and reliever airports). Large and medium hub airports,
non-primary airports with an unclassified role, airports outside of the continental U.S., and
proposed airports were excluded from the sample frame. Small hub airports are those that
account for at least 0.05 but less than 0.25 percent of annual passenger enplanements;
non-hub airports are those that account for less than 0.05 percent of passenger
enplanements but have more than 10,000 enplanements annually; non-primary
commercial service airports have at least 2,500 and no more than 10,000 annual
enplanements.
7This is the unweighted response rate. The weighted response rate was 65 percent.
Following best practices in survey research and in Office of Management and Budget,
Standards and Guidelines for Statistical Surveys (September 2006), we carried out a
nonresponse bias analysis. The nonresponse bias analysis and subsequent weighted
adjustments only included variables available on the National Plan of Integrated Airport
Systems (NPIAS) sample frame and did not account for unobserved variables that could
potentially be related to the likelihood of response. However, based on our knowledge of
aviation operations, we did not expect survey responses or the likelihood of response to
vary by other airport characteristics. Based on this nonresponse bias analysis and
resulting nonresponse-adjusted analysis weights, we determined that estimates using
these weights are generalizable to the population of smaller airports and are sufficiently
reliable for the purposes of our reporting objectives.
8Unless otherwise noted, all estimates from this survey have a margin of error of plus or
minus 10 percentage points or less, at the 95 percent confidence level.




Page 3                                                   GAO-22-104429 COVID-19 Pandemic
                     related rulemakings, exemptions, and extensions, as well as operational
                     guidance. We interviewed officials from FAA divisions responsible for
                     implementing these actions as well as those of the 47 aviation and
                     aerospace stakeholders selected whose operations were potentially
                     affected by these actions.

                     To describe the outlook for aviation industry recovery and considerations
                     for the federal role in assisting the aviation industry, we reviewed
                     forecasts published by aviation industry stakeholders, including aviation-
                     related businesses, consulting firms, and credit rating agencies, and
                     synthesized their findings. We also interviewed the 47 aviation and
                     aerospace industry stakeholders described above to obtain their
                     perspectives on considerations for federal assistance, and reviewed our
                     prior work on civil aviation and on federal assistance to the private
                     sector. 9 See appendix I for additional details on our objectives, scope,
                     and methodology, including a list of stakeholders interviewed.

                     We conducted this performance audit from July 2020 to October 2021 in
                     accordance with generally accepted government auditing standards.
                     Those standards require that we plan and perform the audit to obtain
                     sufficient, appropriate evidence to provide a reasonable basis for our
                     findings and conclusions based on our audit objectives. We believe that
                     the evidence obtained provides a reasonable basis for our findings and
                     conclusions based on our audit objectives.


Background
Civil Aviation and   The U.S. civil aviation and aerospace industries are vital contributors to
Aerospace Sectors    the domestic and global economies. Airlines generate billions of dollars in
                     revenue annually and contribute to the economic health of the nation.
                     These industries are a complex and dynamic ecosystem that includes,
                     among many other entities, passenger airlines that provide scheduled
                     and non-scheduled service, cargo airlines, airports, aviation




                     9See, for example, GAO, Sustained Federal Action is Crucial as Pandemic Enters Its
                     Second Year, GAO-21-387 (Washington, D.C.: Mar. 31, 2021), and GAO, Financial
                     Assistance: Lessons Learned from CARES Act Loan Program for Aviation and Other
                     Eligible Businesses, GAO-21-198 (Washington, D.C.: Dec. 10, 2020).




                     Page 4                                               GAO-22-104429 COVID-19 Pandemic
manufacturers of airplanes and engines, businesses that provide aircraft
maintenance services, and the commercial space industry. 10

Passenger Airlines

Airlines that provide scheduled commercial passenger service are often
grouped into categories including network, low-cost, and regional airlines.
Most network airlines operate complex hub-and-spoke operations with
thousands of employees and hundreds of aircraft. These airlines provide
service at various levels to a wide variety of domestic and international
destinations. Low-cost airlines tend to operate less costly point-to-point
service mostly to domestic airports using fewer types of aircraft. Regional
airlines operate smaller aircraft, turboprops, or regional jets with up to 100
seats, and generally provide service to smaller communities under
capacity purchase agreements with network airlines. 11 Some regional
airlines are owned by a network airline, while others are independent.
Airlines that provide scheduled commercial passenger service may also
carry cargo—called “belly cargo”—in any excess space on the lower
decks of their aircraft. Other aircraft operators provide unscheduled,
charter, and on-demand passenger service and include air taxis and
business jets. 12

Since the airline industry was deregulated in 1978, its earnings have been
volatile. 13 Notably, the demand for air travel tends to fluctuate in relation
to the state of the economy as well as to political, international, and
health-related events. For example, in the last 20 years, global air travel
demand has been disrupted by events including 9/11, the SARS outbreak
of 2002-03, and the 2008 global financial crisis. However, airlines

10Other entities within the industry include businesses that supply various resources to
airlines, including catering companies and fuel suppliers; airport tenants such as rental car
companies, parking operators, and gift and retail concessionaires; smaller businesses in
the aviation manufacturing supply chain, including parts and component suppliers; and
business involved in the manufacture and operation of drones.
11Under a capacity purchase agreement, network airlines contract with regional airlines to
provide air service beyond the network airline’s own route structure to increase their
capacity and revenue. Agreement terms vary, but network airlines generally take on all
commercial functions, such as brand marketing, flight scheduling, and ticket pricing, while
the regional airlines are responsible for the aircraft and crews to operate the flights and
provide ground and flight operations.
12See 14 C.F.R. pt. 135.

13Airline Deregulation Act of 1978, Pub. L. No. 95–504, 92 Stat. 1705.




Page 5                                                  GAO-22-104429 COVID-19 Pandemic
experienced a period of sustained profitability from 2010 to 2019 based in
part on the strength of the overall economy, consolidation among airlines,
and industry’s greater ability to align supply with levels of demand.

Airports

The United States has more than 19,000 airports, which vary substantially
in size and the type of aviation services they support. Roughly 3,300 are
public airports designated by FAA as part of the national airport system, 14
which consists of two categories of airports: (1) commercial service,
which are publicly owned, have scheduled service, and board at least
2,500 passengers per year, and (2) general aviation and reliever airports,
which have either no scheduled service or fewer than 2,500 passengers
per year. 15 Federal law divides commercial service airports into various
sub-categories, based on the number of passenger boardings
(enplanements), ranging from large hub airports to commercial service
non-primary airports (see fig. 1).

Figure 1: Commercial Airport Categories for U.S. Airports




14The 3,300 airports designated by FAA as part of the national airport system are eligible
for federal assistance for airport capital projects.
15According to FAA’s National Plan of Integrated Airport Systems, 2021-2025, there are
2,535 general aviation airports and 250 reliever airports, which are designated by FAA to
relieve congestion at nearby commercial service airports and to provide improved general
aviation access to the overall community.




Page 6                                                 GAO-22-104429 COVID-19 Pandemic
Note: Primary commercial service airports are grouped into four hub categories. 49 U.S.C. §§
47102(11), (13), (14), (25).


Commercial service airports collect the bulk of their revenues from two
general groups of users: aeronautical users, such as passenger airlines,
and non-aeronautical concessionaires, including car rental agencies,
parking lots, restaurants, gift shops, and other small vendors. The airports
provide these users with a wide range of facilities and services for which
they assess fees, rents, or other charges.

Other sectors within the aviation and aerospace industries include:

•    Cargo airlines: This sector includes airlines that operate aircraft
     configured specifically for carrying cargo. Compared to passenger
     aircraft that carry some belly cargo, dedicated cargo aircraft can carry
     more varied types of cargo, such as items that are large or unusually
     shaped, hazardous material, and livestock and other animals.
•    General aviation: According to FAA, “general aviation” describes a
     diverse range of aviation activities and includes all segments of the
     aviation industry except commercial aviation and the military. 16
     General aviation activities include training of new pilots and pilots
     interested in additional ratings or certification, sightseeing, movement
     of large heavy loads by helicopter, flying for personal or
     business/corporate reasons, and emergency medical services.
     General aviation aircraft range from the one-seat single-engine piston
     aircraft to the long-range corporate jet, and also include gliders and
     amateur-built aircraft.
•    Manufacturers: Airlines purchase commercial aircraft, jet engines,
     components, and other systems for the global aviation and aerospace
     industry from an array of manufacturers and related suppliers.
•    Repair station operators: Three basic types of organizations
     perform aircraft maintenance for U.S. airlines: (1) airlines’ in-house
     maintenance facilities; (2) original equipment manufacturers (OEMs)
     that offer maintenance capabilities for the aircraft parts they
     manufacture; and (3) independent repair stations (i.e., not owned or
     affiliated in whole or part by airlines or OEMs). Aircraft maintenance




16FAA, FAA Aerospace Forecasts, Fiscal Years 2003-2014.




Page 7                                                       GAO-22-104429 COVID-19 Pandemic
                                services include line maintenance, airframe heavy maintenance,
                                engine repair and overhaul, and component maintenance. 17
                            •   Uncrewed aircraft systems: Uncrewed aircraft systems (UAS), or
                                drones, have the potential to provide significant social and economic
                                benefits in the United States, including by delivering packages,
                                helping to fight fires, and distributing medical supplies at hospitals, as
                                well as through military uses, such as intelligence, surveillance, and
                                reconnaissance. 18
                            •   Commercial space transportation: Space transportation is the
                                movement of objects, such as satellites and vehicles carrying cargo,
                                scientific payloads, or passengers, to or from space. In the United
                                States, commercial space transportation is carried out by private
                                companies using orbital and suborbital launch vehicles, which they
                                own and operate.

Federal Assistance to the   In response to the public health and economic crises, COVID-19 relief
Aviation Industry during    laws have provided more than $100 billion in assistance for aviation
                            businesses and airports since March 2020, and depending on the
the COVID-19 Pandemic
                            program, required recipients to temporarily maintain employment levels or




                            17Line maintenance entails light, regular maintenance checks carried out to ensure that an
                            aircraft is fit for flight. Airframe heavy maintenance involves regularly scheduled
                            inspection, maintenance, preventive maintenance, and alteration that will take aircraft out
                            of service for a pre-determined time at specified intervals. Engine repair and overhaul
                            includes disassembling, inspecting, repairing, or replacing engine parts, followed by
                            reassembling and testing. Component maintenance is the repair and overhaul of
                            components that provide the basic functionality for flight. For more information, see GAO,
                            Aviation Safety: FAA’s Risk-Based Oversight for Repair Stations Could Benefit from
                            Additional Airline Data and Performance Metrics, GAO-16-679 (Washington, D.C.: July 28,
                            2016).
                            18We did not include UAS in the scope of our audit work. In ongoing work, we are
                            examining related issues including, among others, the status of FAA’s efforts to integrate
                            UAS into the National Airspace System, federal actions to address the malicious use of
                            UAS in the airport environment, and workforce considerations for the use of UAS in
                            transporting passengers and cargo, or Advanced Air Mobility.




                            Page 8                                                  GAO-22-104429 COVID-19 Pandemic
refrain from conducting involuntary furloughs, among other
requirements. 19 This assistance has included:

•   Up to $63 billion in financial assistance to be used exclusively for the
    continuation of payment of employee wages, salaries, and benefits for
    eligible applicants including passenger airlines, cargo airlines, and
    certain aviation contractors;
•   Up to $29 billion for loans and loan guarantees to provide liquidity to
    passenger airlines, cargo airlines, repair stations, and ticket agents; 20
•   $20 billion in airport grants to support U.S. airports of all sizes and
    certain tenants experiencing severe economic disruption caused by
    the COVID-19 pandemic; 21
•   $3 billion to establish an Aviation Manufacturing Jobs Protection
    program to provide payroll support payments to eligible businesses
    exclusively for the continuation of employee wages, salaries, and
    benefits, and to facilitate the retention, rehire, or recall of employees
    of the employer; 22 and




19GAO, COVID-19: Opportunities to Improve Federal Response and Recover Efforts,
GAO-20-625 (Washington, D.C.: June 25, 2020). Conditions of the three financial
assistance programs include prohibitions against involuntary layoffs or furloughs. Some
airlines took action to offer early retirement. In addition, through attrition and hiring
freezes, airlines were able to reduce headcount. As authorized by the CARES Act and the
Consolidated Appropriations Act, 2021, DOT required scheduled passenger airlines
receiving financial assistance to maintain minimum scheduled passenger service to points
in the United States served prior to the pandemic, with some exceptions. Pub. L. No. 116-
136, §§ 4005, 4114(b), 134 Stat. at 477, 499; Pub. L. No. 116-260, § 407, 134 Stat. at
2058-59.
20CARES Act, § 4003, 134 Stat. at 470. Section 4003 also included up to $17 billion for
businesses critical to maintaining national security.
21Under the Consolidated Appropriations Act, 2021 and the American Rescue Plan Act of
2021, certain amounts were made available to provide relief from rent and minimum
annual guarantees to airport concessions. 134 Stat. at 1939-40; § 7102, 135 Stat. at 96-
98. The CARES Act gives the FAA the authority to retain up to 0.1 percent of the $10
billion (equaling up to $10 million) provided for Grants-in-Aid for Airports to fund the award
and oversight by FAA of grants made under the CARES Act. Pub. L. No. 116-136, 134
Stat. at 596-597.
22Under the American Rescue Plan Act of 2021, DOT may use up to 1 percent of the
funds appropriated ($30 million) for implementation costs and administrative expenses.
Pub. L. No. 117-2 § 7202(a), 135 Stat. at 103.




Page 9                                                   GAO-22-104429 COVID-19 Pandemic
•   A suspension of aviation excise taxes on air transport of people,
    cargo, and aviation fuel through calendar year 2020. 23

The CARES Act provided other assistance for which entities beyond the
aviation industry had eligibility, including the Paycheck Protection
Program, Main Street Lending Program, and various employer and
business tax provisions. 24

Figure 2 illustrates key trends and events in aviation, public health, and
federal assistance during the COVID-19 pandemic in relation to airport
traffic and reported COVID-19 infections.




23In October 2020, Congress appropriated $14 billion from the General Fund to the Airport
and Airway Trust Fund, the income of which had been affected by reduced revenues from
air travel during the pandemic and the CARES Act’s suspension of aviation excise taxes.
Continuing Appropriations Act, 2021 and Other Extensions Act, Pub. L. No. 116-159, §
1205, 134 Stat. 709, 728. The Trust Fund funds, among other things, federal grants for
airports, acquisition and maintenance for air traffic facilities and equipment, and research
on issues related to aviation safety, mobility, and technologies. The Trust Fund receives
income from sources including taxes on airline passenger ticket sales, segment fees, air
cargo fees, and aviation fuel taxes paid by both commercial and general aviation aircraft.
24For a broader discussion of these COVID-19 relief provisions, see GAO, COVID-19:
Continued Attention Needed to Enhance Federal Preparedness, Response, Service
Delivery, and Program Integrity, GAO-21-551 (Washington, D.C.: July 19, 2021).




Page 10                                                 GAO-22-104429 COVID-19 Pandemic
Figure 2: TSA-Screened Passengers, CDC-Reported COVID-19 Cases, and Selected Key Events during the COVID-19
Pandemic (January 2020 through March 2021)




                                      Notes:
                                      a
                                       TSA screened passenger data include TSA, airport, and airline employees transiting checkpoints
                                      and therefore represents slightly more than actual passenger traffic. The 7-day moving averages
                                      were calculated as the (current day + 6 preceding days)/7, where data were reported. The TSA data
                                      were accessed on August 31, 2021.
                                      b
                                       Reported COVID-19 cases include confirmed and probable cases. The 7-day moving averages were
                                      calculated as the (current day + 6 preceding days)/7, where data were reported. The CDC data were
                                      accessed on August 27, 2021.
                                      c
                                        The TSA screened passenger data on February 29, 2020 was not reported and therefore not
                                      included in the 7-day moving average.




                                      Page 11                                                     GAO-22-104429 COVID-19 Pandemic
                              The COVID-19 pandemic had disparate effects on selected aviation and
The COVID-19                  aerospace sectors in 2020, most severely affecting the sectors that are
Pandemic Had                  dependent on commercial passenger activity. The dramatic drop in
                              demand for passenger air travel had a cascading effect across
Disparate Effects on          commercial aviation sectors, including passenger airlines, airports,
Selected Aviation and         aviation manufacturers, and repair station operators. However, other
                              aviation and aerospace sectors that are less reliant on passenger activity,
Aerospace Sectors in          such as cargo airlines, business aviation, and the commercial space
2020                          transportation industry, experienced less of a reduction—and in some
                              cases an increase—in demand for their services.

The Dramatic Drop in
Demand for Passenger Air
Travel in 2020 Had
Cascading Effects across
Commercial Aviation
Sectors
Passenger Airlines            U.S. passenger airlines experienced an unprecedented reduction in the
Experienced Unprecedented     demand for air travel in 2020 as a result of the COVID-19 pandemic.
Reduction in Demand for Air   According to Bureau of Transportation Statistics (BTS) data, annual
Travel                        airline passenger traffic was down 60 percent system-wide in 2020
                              compared to annual traffic levels in 2019. Passenger traffic reached the
                              lowest levels in April 2020, when traffic fell to 3 million passengers, a 96
                              percent decrease compared to the previous April. As the industry group
                              Airlines for America (A4A) testified to Congress, such low traffic levels
                              had not been seen since the 1950s. 25

                              Passenger traffic has slowly returned since the trough in demand in April
                              2020, with the return of domestic traffic outpacing the return of
                              international traffic (see figure 3). Annual international air traffic was over
                              70 percent lower in 2020 compared to 2019 and accounted for 9 percent
                              of all U.S. passenger air traffic, compared to 12 percent in 2019.




                              25Prepare for Takeoff: America’s Safe Return to Air Travel, Hearing on SR-253, Before the
                              U.S. Senate Committee on Commerce, Science, and Transportation Subcommittee on
                              Aviation Safety, Operations, and Innovation, 117th Cong. (2021) (statement of Nick Calio,
                              President and CEO, Airlines for America).




                              Page 12                                                GAO-22-104429 COVID-19 Pandemic
Figure 3: U.S. Airline Passenger Traffic, Percentage Change 2019 versus 2020, by
Type




In addition, business passengers have been slower to return than leisure
passengers. This slower return is in part due to the increased use of
virtual meeting technology, according to the consulting firm McKinsey &
Company, 26 as well as potential liability concerns. According to data
collected by the Airlines Reporting Corporation (ARC), the sale of
corporate tickets reached its lowest point in April 2020 when sales were
down over 96 percent from the prior year. ARC data further indicates that
sales of corporate tickets remained low throughout 2020, continuing to be
approximately 80 percent lower than pre-pandemic levels as of late
December 2020.

This sharp decline in demand affected airlines’ revenues, but the extent of
that effect varied across airlines based on their business models.


26McKinsey & Company, For Corporate travel, a long recovery ahead (August 2020).




Page 13                                             GAO-22-104429 COVID-19 Pandemic
•   Network airlines: The long period of reduced business and
    international passenger traffic has particularly affected the revenues
    of network airlines, which typically generate a large portion of their
    revenues from such travelers. According to the credit rating agency
    Moody’s, large U.S. network airlines generate at least one third of
    their revenue from business travelers, despite the fact that business
    travelers make up only about 12 percent of global passengers. 27
    Based on BTS data, Delta Air Lines, American Airlines, and United
    Airlines—the top three major U.S. network airlines based on 2019
    operating revenues—experienced a 94 percent decline in passenger
    revenues in the second quarter of 2020 compared to the second
    quarter of 2019. 28 By the fourth quarter of 2020, the three network
    airlines’ passenger revenues remained down 76 percent. While the
    decline in revenues was largely due to the decline in passengers, fare
    reductions also had an effect. For example, selected network airlines
    reduced their gross average fare by 19 percent in 2020 compared to
    2019, in part to attract passenger traffic. 29 For the majority of the year,
    these airlines were experiencing negative cash flow or “cash burn,”
    whereby they needed to use cash reserves to fund their daily
    operations. For example, United Airlines reported that it spent $40
    million more per day than it earned in revenue in the second quarter
    of 2020.
•   Low-cost airlines: Low-cost airlines’ business models rely largely on
    customers flying domestically for leisure travel at generally lower
    airfares than those charged by network airlines. These airlines
    experienced a faster return of their passenger traffic, and in turn their
    revenues, than network airlines. For example, according to BTS data,
    six selected low-cost airlines experienced an 87 percent decline in
    passenger revenues in the second quarter of 2020 compared to
    2019. 30 By the fourth quarter of 2020, the low-cost airlines’ passenger
    revenues were down only 67 percent compared to the same quarter in
    the prior year. Like network airlines, low-cost airlines’ revenues were

27Moody’s Investors Service, Business Travel Faces Higher Substitution Risk post-
COVID, but Airlines will Adapt (Mar. 24, 2021).
28Passenger revenue is revenue received by the airline from the carriage of passengers in
scheduled operations.
29Gross fare was calculated using U.S. DOT Origin & Destination summary data, which
sources from a 10% sample of all U.S. airline tickets.
30Based on BTS 2019 airline rankings of the top 21 airlines by operating revenue, we
included Allegiant Air, Frontier Airlines, JetBlue Airways, Southwest Airlines, Spirit
Airlines, and Sun Country Airlines in our analysis of low-cost airlines.




Page 14                                                  GAO-22-104429 COVID-19 Pandemic
                                   also affected by their fare reductions. Selected low-cost airlines
                                   reduced their average gross fare by 21 percent in 2020 compared to
                                   2019. Low-cost airlines also experienced negative cash flow, but
                                   recovered faster than the network airlines. For example, Spirit Airlines
                                   reported that it spent approximately $9.5 million more per day than it
                                   earned in revenue in April 2020, but in the fourth quarter—October
                                   through December—of 2020 it reduced that daily average negative
                                   cash flow to $1.8 million.
                               •   Regional airlines: Regional airlines, whose business models rely on
                                   contracts with their network airline partners, experienced mixed
                                   impacts from the pandemic. Four regional airlines ceased operation in
                                   2020; however, certain remaining regional airlines were profitable in
                                   2020 due to the nature of their existing contracts with their network
                                   airline partners. For example, representatives from one regional
                                   airline we interviewed credited their profitability in 2020 in part to the
                                   fact that their business is based primarily on what are called “capacity
                                   purchase agreements.” Under these agreements, network airline
                                   partners contract with regional airlines to provide service on regional
                                   routes, and in exchange, the network airlines generally pay a variety
                                   of the regional airlines’ costs, including, for example, a guaranteed
                                   monthly fee and payment for the regional airlines’ hours in service and
                                   certain other flight costs such as fuel. Additionally, representatives
                                   from another regional airline told us that in some cases, they flew
                                   flights on routes on which their network airline partners previously flew
                                   larger jets, as their network airline partners responded to decreased
                                   demand by flying smaller, less expensive regional aircraft on certain
                                   routes instead of mostly empty, larger jets.

Airport Revenues Declined as   U.S. airports experienced a significant reduction in passenger traffic as a
a Result of Reduced Demand     result of the pandemic, although the extent of this reduction varied
for Air Travel                 depending on the type of travelers an airport typically serves. Large
                               airports that serve business and international travelers—such as JFK
                               International Airport and Boston Logan International Airport—experienced
                               a greater and more sustained decline in passenger traffic compared to
                               airports that are in leisure destinations. For example, according to data
                               from A4A, traveler throughput in New York and Massachusetts was down
                               more than 75 percent in November 2020 compared to November 2019,
                               while Florida and Arizona—which are popular U.S. leisure travel
                               destinations—experienced declines of approximately 50 percent over the
                               same period.

                               Based on our interviews with large and medium hub airport
                               representatives and our survey of smaller airports, we found that airports



                               Page 15                                        GAO-22-104429 COVID-19 Pandemic
of all sizes experienced a decline in both aeronautical 31 and non-
aeronautical operating revenues as a result of the COVID-19 pandemic. 32
Specifically, representatives from the large and medium hub airports we
interviewed reported that their revenue losses were tied to decreases in
the various forms of passenger-driven operating revenues they collect.
For example, representatives at one large hub airport told us that relative
to 2019 levels, aeronautical operating revenue collected from landing fees
paid by airlines at their airport was down approximately 60 percent in April
2020 and down 30 percent in September 2020. Furthermore,
representatives from some of these airports told us that passenger-driven
sources of non-aeronautical revenues such as concessions and parking
had dropped 35 percent or more in 2020 compared to 2019.

Similarly, based on the smaller airports we surveyed, we estimate that
small hub and non-hub airports experienced greater percentage declines
in revenues than non-primary commercial service or general aviation and
reliever airports, 33 a reflection of the small- and non-hub airports’ heavier

31The estimated percentage (lower bound, upper bound) of airports reporting a decline in
aeronautical revenue between September 2019 and September 2020 was 85 (73, 93)
percent for small hub airports, 92 (87, 96) percent for non-hub airports, 69 (56, 80) percent
for non-primary commercial service airports, and 54 (50, 58) percent for general aviation
and reliever airports. The margins of error between the estimates for the small hub and
non-primary commercial service airports and the upper or lower bounds were greater than
10 percentage points. These estimates should be interpreted with caution.
32Airports generate both aeronautical revenues and non-aeronautical revenues.
Aeronautical revenues are derived from the operation and landing of aircraft, passengers,
or freight. As discussed later, airports assess fees on airlines for the use of the airport
based on negotiated agreements. These agreements vary in whether the airline or the
airport bears the risk if the fees paid by airlines and others do not fully cover the airport’s
costs. Non-aeronautical revenues are derived from sources unrelated to the operation and
landing of aircraft, passengers, or freight, such as terminal concessions and parking fees.
33The estimated percentage (lower bound, upper bound) of airports reporting a decline in
aeronautical revenue of more than 50 percent between September 2019 and September
2020 was 30 (19, 44) percent for small hub airports, 38 (36, 41) percent for non-hub
airports, 15 (7, 26) percent for non-primary commercial service airports, and 12 (9, 15)
percent for general aviation and reliever airports. The margins of error between the
estimates for the small hub and non-primary commercial service airports and the upper or
lower bounds were greater than 10 percentage points. These estimates should be
interpreted with caution. The estimated percentage (lower bound, upper bound) of airports
reporting a decline in non-aeronautical revenue of more than 50 percent between
September 2019 and September 2020 was 47 (44, 51) percent for small hub airports, 32
(30, 34) percent for non-hub airports, 13 (6, 24) percent for non-primary commercial
service airports, and 7 (5, 9) percent for general aviation and reliever airports. The
margins of error between the estimates for the non-primary commercial service airports
and the upper or lower bounds were greater than 10 percentage points. These estimates
should be interpreted with caution.




Page 16                                                   GAO-22-104429 COVID-19 Pandemic
                             reliance on scheduled commercial passenger service. For example,
                             based on our survey, we estimate that about 60 percent of all smaller
                             airports had a decrease in aeronautical revenues in September 2020
                             compared to September 2019, and among those airports, about a quarter
                             experienced a decrease in revenues of more than 50 percent.
                             Additionally, we estimate that about half of small hub and about one-third
                             of non-hub airports experienced a decrease in non-aeronautical revenues
                             of more than 50 percent. At the same time, however, about 60 percent of
                             general aviation and reliever airports and about 40 percent of non-primary
                             commercial service airports did not see a change in their non-
                             aeronautical revenues. For the full results of our survey of smaller
                             airports, see appendix II.

Declining Passenger Travel   In response to reduced passenger demand, airlines parked or retired a
Led to Reduced Demand for    substantial portion of their aircraft fleet (as we discuss later in this report),
Commercial Airplanes,        which in turn reduced demand for new commercial airplanes, engines,
Engines, and Aircraft        and spare parts in the near term. According to representatives we
Maintenance Services         interviewed from two aviation manufacturers and one supplier, and
                             financial statements publicly reported by these businesses, they
                             experienced a decline in revenues as a result of delayed delivery or
                             deferred orders from airlines and other manufacturers. For example, one
                             large engine manufacturer publicly reported that its aviation segment
                             orders were down $15.1 billion—41 percent—in 2020 compared to 2019.
                             It attributed the decrease primarily to lower commercial equipment and
                             service orders as airline customers slowed or deferred new engine
                             orders. For these manufacturers, the effects of the pandemic were
                             preceded by the financial impact of the 737 MAX grounding in 2019,
                             which affected not only Boeing but companies in the supply chain that
                             produced components for the 737 MAX. 34

                             Airline decisions in response to passenger demand also affected
                             businesses that provide aircraft maintenance services. Representatives
                             from three repair station operators told us that airline decisions to reduce
                             capacity by flying less frequently reduced demand for maintenance
                             services in the near term. For example, representatives from one repair
                             station operator reported that demand from their commercial airline

                             34On March 13, 2019, FAA issued an emergency order prohibiting the operation of Boeing
                             737 MAX series aircraft by U.S. certificated operators in response to the crashes of Lion
                             Air Flight 610 in Indonesia on October 28, 2018 and Ethiopian Airlines Flight 302 on
                             March 10, 2019. FAA rescinded the emergency order and cleared the MAX to fly again on
                             November 18, 2020.




                             Page 17                                               GAO-22-104429 COVID-19 Pandemic
                           customers declined by 70-80 percent. Additionally, according to a June
                           2020 survey by the Aeronautical Repair Station Association, 87 percent of
                           member repair station respondents reported revenue declines in
                           January–May 2020, with an average decline of about 46 percent. 35

Other Aviation and
Aerospace Sectors
Experienced Increased
Demand or Suffered a
Less Severe Reduction in
Demand in 2020
Cargo Airlines             As a result of the larger number of people staying home during the
                           pandemic and the growth in e-commerce, domestic cargo airlines
                           experienced an increased demand for service. According to BTS data,
                           2020 was a record year in the amount of cargo carried by airlines. In
                           2020, the top fifteen U.S. airlines based on tons of cargo transported in
                           2020 carried 1.46 million more tons of cargo than in 2019, an increase of
                           10.7 percent year-over-year. 36 These airlines experienced an average 5.5
                           percent increase in total operating revenues in 2020 compared to 2019.

                           Representatives from the large cargo airline we spoke with told us that in
                           the early stage of the pandemic, neither their company nor the broader
                           U.S. cargo aviation system had the capacity to meet the quick increase in
                           demand for cargo services; however, the industry was able to
                           accommodate this increase in demand relatively quickly. The decrease in
                           passenger airline flights reduced cargo capacity early in the pandemic
                           because passenger flights normally carry some cargo in the belly of their
                           aircraft. However, capacity constraints were eased as passenger airlines’
                           traffic picked up and as some cargo was accommodated on empty
                           passenger planes. Additionally, representatives from the large cargo
                           airline we spoke with told us they also met the increased demand for
                           cargo transport in part by ramping up their hiring of 100,000 winter-



                           35Aeronautical Repair Station Association, “Pandemic Impacts on Aviation Markets:
                           Employment and Revenue Losses Reported by U.S. Maintenance Companies, January 1,
                           2020 to June 1, 2020,” July 28, 2020.
                           36The largest fifteen cargo airlines were based on total freight and mail transported in
                           2020. These airlines generated at least 30 percent of their operating revenues from freight
                           and mail transport.




                           Page 18                                                  GAO-22-104429 COVID-19 Pandemic
                    season employees earlier in the year than usual and maintaining those
                    workforce levels through the winter.

                    Representatives from the two smaller charter cargo airlines we spoke with
                    told us they experienced uncertainty and volatility in their operations in
                    2020. Representatives told us that they initially experienced large
                    decreases in demand early in 2020 as the markets they served shut
                    down, starting with China in January and February, followed by Europe
                    and then the U.S. in March. As a result, representatives from both airlines
                    told us that in the first quarter of 2020, they were losing money and under
                    financial stress. However, they told us they experienced a return in
                    demand as the markets they service reopened, starting in mid-to-late
                    spring 2020.

Business Aviation   Similar to other aviation sectors, business aviation— the use of smaller,
                    general aviation aircraft primarily for business purposes—experienced a
                    steep decline in activity early in the pandemic; however, demand began
                    to recover for this sector in the second half of 2020, much faster than for
                    passenger airlines. For example, according to FAA data, domestic and
                    international business jet operations in April 2020 were nearly 75 percent
                    below 2019 levels, but by June 2020 had recovered to levels 24 percent
                    below those in June 2019, and by December 2020 were only about 12
                    percent lower than the prior year’s level of activity. 37 According to a
                    December 2020 report from S&P Global Ratings, demand for business
                    aviation had rebounded in part due to increased demand from corporate
                    executives and individuals able to pay for alternatives to commercial
                    scheduled passenger service during the pandemic. 38

                    Representatives from the two business jet manufacturers we interviewed
                    reported decreased demand in spring 2020 as a result of the pandemic,
                    but told us that demand improved in the latter half of the year. They
                    attributed lower demand in part to customer uncertainty concerning the
                    timing of economic recovery and managing supply chain disruptions. In
                    particular, both manufacturers told us that domestic and global travel
                    restrictions presented challenges in completing aircraft deliveries;
                    however, they told us it was helpful that customers generally delayed or
                    deferred aircraft orders rather than cancel them altogether. Both
                    manufacturers experienced increased demand for their products in the

                    37Federal Aviation Administration, Business Jet Report: January 2021.

                    38S&P Global Ratings, Industry Top Trends 2021: Aerospace and Defense (Dec.10,
                    2020).




                    Page 19                                               GAO-22-104429 COVID-19 Pandemic
                   third and fourth quarters of 2020 compared to the first half of the year.
                   Officials from one manufacturer we spoke with attributed this
                   improvement to a combination of increased optimism around vaccine
                   availability and distribution, a better understanding of how the pandemic
                   may progress, and general optimism about the direction of the economy.
                   According to shipment data for U.S. manufactured aircraft from the
                   General Aviation Manufacturers Association, whose membership includes
                   business jet manufacturers, deliveries of business jets increased in the
                   third and fourth quarters of 2020 versus the first half of the year, but
                   overall were 12 percent lower in 2020 than in 2019.

Commercial Space   Representatives we spoke with from the commercial space transportation
Transportation     industry told us that, to date, the COVID-19 pandemic has had varied
                   effects on the industry. Some sectors of commercial space transportation
                   experienced growth—namely the commercial space launch sector that,
                   while largely driven by one launch provider, experienced a 50 percent
                   increase in the number of FAA-licensed commercial launches from
                   calendar year 2019 to 2020. 39 Representatives from an industry
                   association and an analytics and engineering firm told us that the demand
                   for some sectors of commercial space dropped—such as demand for
                   satellite services to commercial airlines and cruise ships. However,
                   representatives from an industry association explained that because
                   commercial space companies generally have longer-range business
                   models than traditional aviation, a decrease in demand does not
                   immediately affect the sustainability of operations.




                   39We have previously reported on the growth and evolution of the commercial space
                   transportation industry and FAA’s efforts to oversee it. See, for example, GAO,
                   Commercial Space Transportation: FAA Continues to Update Regulations and Faces
                   Challenges to Overseeing an Evolving Industry, GAO-21-105268 (Washington, D.C.: June
                   16, 2021); Commercial Space Transportation: FAA Should Examine a Range of Options
                   to Support U.S. Launch Infrastructure, GAO-21-154 (Washington, D.C.: Dec. 22, 2020);
                   and Commercial Space Transportation: Improvements to FAA’s Workforce Planning
                   Needed to Prepare for the Industry’s Anticipated Growth, GAO-19-437 (Washington, D.C.:
                   May 23, 2019).




                   Page 20                                             GAO-22-104429 COVID-19 Pandemic
                            In response to the many effects of the COVID-19 pandemic, aviation
Aviation and                stakeholders reported that throughout 2020, they quickly implemented
Aerospace                   measures to mitigate financial losses and position themselves to maintain
                            business viability until demand recovers. 40 These actions included
Stakeholders                managing costs—which often included reducing costs; using federal
Responded to the            assistance provided through COVID-19 relief legislation; raising funds in
                            the private market; and taking actions to mitigate the spread of COVID-19
Pandemic’s Effects by       among employees and customers.
Taking a Variety of
Actions to Maintain
Business Viability
Aviation and Aerospace
Stakeholders Took Several
Actions to Manage Labor
and Other Operating
Costs, and Reduced
Capital Investments
Labor Costs                 Passenger airlines took several actions to manage labor costs throughout
                            2020, such as offering employees voluntary unpaid leave or separation
                            and early retirement programs, freezing non-essential hiring, and
                            implementing involuntary furloughs within the limits of the COVID-19 relief
                            laws. 41 For example, Delta Air Lines reported in public SEC financial
                            reports that 50,000 employees took voluntary unpaid leaves of absence
                            and approximately 18,000 employees participated in the airline’s early
                            retirement and voluntary separation programs in 2020. American Airlines
                            reported reducing its management and support staff team by
                            approximately 5,100 positions (30 percent) in 2020 and that more than
                            20,000 of its employees opted for early retirement or long-term partially
                            paid leave as of December 2020. Furthermore, American Airlines, Delta
                            Air Lines, and United Airlines all reported freezing non-essential hiring.


                            40We excluded from this discussion commercial space transportation for which the
                            pandemic had less deleterious effects.
                            41Aviation stakeholders across sectors reduced labor costs. However, as discussed
                            above, airlines and airports accepting federal assistance from the CARES Act and
                            subsequent COVID-19 relief laws were limited in their ability to reduce employment levels
                            or conduct involuntary furloughs.




                            Page 21                                               GAO-22-104429 COVID-19 Pandemic
Airports took similar actions to manage their labor costs throughout 2020,
although only a small percentage of workers at U.S. airports are
employed by the airport. 42 Airports that accepted grant funds from the
federal COVID-19 relief programs were also limited in their ability to
reduce employment levels or conduct involuntary furloughs. 43
Representatives from nearly all of the eleven large and medium hub
airports we spoke with cited managing costs through suspending or
slowing down hiring. For example, representatives at one large hub
airport operated by a municipal government told us their airport was
affected by a hiring slow-down that limited new hiring to only critical
positions. In addition, representatives from four airports we spoke with
told us they offered voluntary early retirement programs. Representatives
from one of the eleven airports we spoke with told us they went through a
reduction in force limited to 26 union and non-union employees, which
reduced the airport’s payroll by about 5 percent. Based on our survey of
smaller airports, we estimate that about 5 percent of smaller airports
implemented staff layoffs and about 20 percent of smaller airports
decreased staff hours to reduce operating costs at their airports.

Representatives from two manufacturers and two repair station operators
we interviewed also reported that they reduced their workforces in 2020
through reductions to employees’ hours, layoffs, furloughs, and in some
cases, closing facilities. For example, representatives from one repair
station operator that did not receive COVID-19 relief funding told us they
reduced their staff by 50 percent in 2020. Similarly, one large
manufacturer of airplane engines permanently reduced its global
workforce of 52,000 employees by approximately 25 percent in 2020, and
representatives from a business jet manufacturer told us that more than




42Airport direct hires are a small number of people who work at an airport. Many people
working in airports are employees of private companies, such as airlines and airport
tenants. For example, gate agents are hired by airlines and concessionaire employees are
hired directly by concessionaires.
43Certain airport owners—also known as airport sponsors—accepting CARES Act grant
funds were required to continue to employ, through December 31, 2020, at least 90
percent of the number of individuals employed as of March 27, 2020. However, non-hub
and non-primary airports were excluded from this workforce retention requirement. The
Consolidated Appropriations Act, 2021 extended these workforce retention requirements
through February 15, 2021. Airports that accept American Rescue Plan Act of 2021 grants
will be subject to the same workforce retention requirements through September 30, 2021.




Page 22                                              GAO-22-104429 COVID-19 Pandemic
                          600 employees were affected in October 2020 when it decided to
                          permanently close a facility in California. 44

Non-labor Operating and   Passenger airlines also took a number of actions in 2020 to manage non-
Capital Investments       labor operating costs and certain capital investments. Early on in the
                          pandemic, some passenger airlines took actions to better align supply
                          with demand by quickly reducing the capacity and reach of their networks.
                          They did this by reducing flight frequencies, the number of airports they
                          served, and the size of aircraft flying certain routes (including shifting
                          flights to regional airlines), which reduced operating costs; however, the
                          extent to which they were able to reduce service was limited in some
                          cases. 45 The three selected network airlines included in our earlier
                          analysis—Delta Air Lines, American Airlines, and United Airlines—
                          reduced system-wide capacity, as measured in available seat miles, by
                          54 percent in 2020 compared to 2019 levels. 46 The six selected low-cost
                          airlines reduced system-wide capacity by 37 percent during the same
                          time period.

                          Additionally, airlines also reduced costs by retiring older aircraft, delaying
                          the delivery of new aircraft, or both, in an effort to reduce both operating
                          and capital costs. According to FAA data, U.S. mainline carriers reduced
                          the number of passenger jet aircraft in their fleet by an estimated 28
                          percent in 2020. 47 For example, American Airlines accelerated the
                          retirement of a number of aircraft, including certain Airbus A330, Boeing
                          757 and Boeing 767 models, and certain regional aircraft. According to
                          American’s SEC financial reports, the aircraft retirements provided cost
                          savings and efficiencies associated with operating fewer aircraft types.
                          Several airlines also placed some aircraft in temporary storage to reduce
                          operating costs (see figure 4). Some airlines also reduced capital costs by

                          44Neither manufacturer received CARES Act assistance and were therefore not limited in
                          their ability to reduce employment levels.
                          45As authorized by the CARES Act and the Consolidated Appropriations Act, 2021, DOT
                          required scheduled passenger airlines receiving financial assistance to maintain minimum
                          scheduled passenger service to points in the United States served prior to the pandemic,
                          with some exceptions, until March 1, 2022. For example, DOT has exempted airlines in
                          cases where it is not reasonable or practicable to serve all points or all frequencies in their
                          service obligations. Pub. L. No. 116-136, §§ 4005, 4114(b), 134 Stat. at 477, 499; Pub. L.
                          No. 116-260, § 407, 134 Stat. at 2058-59.
                          46Available seat miles are a measure of airline output that refers to one aircraft seat flown
                          one mile, whether occupied or not.
                          47FAA defines mainline carriers as those providing service primarily via aircraft with 90 or
                          more seats.




                          Page 23                                                   GAO-22-104429 COVID-19 Pandemic
delaying and deferring the delivery of new aircraft, including those
scheduled for delivery in 2020 and 2021.

Figure 4: Parked Aircraft Temporarily Stored at Denver International Airport




Airports of all sizes also took actions in 2020 to manage non-labor
operating costs and capital investments. For example, representatives
from one medium hub airport told us they closed parking lots and reduced
shuttle services to cut operating expenses. Additionally, representatives
from airports we interviewed and surveyed reported changing the timeline
of capital development projects. Representatives from one medium hub
airport told us the airport paused a $1.5 billion expansion project that
includes the addition of 16 new gates, a seven-story parking garage, a
new cargo facility, and several other improvements to the airport. At the
same time, representatives from four airports we interviewed told us they
accelerated the timeline of some of their capital projects to take
advantage of project savings that could be realized as a result of the
reduced passenger traffic. Similarly, based on our survey of smaller
airports, we estimate that about one third of smaller airports modified their
infrastructure project timelines. Among smaller airports that made
changes to their infrastructure projects, we estimate that about 15 percent




Page 24                                            GAO-22-104429 COVID-19 Pandemic
                               of them cancelled projects and about 75 percent of them delayed
                               projects, while approximately 10 percent accelerated projects. 48

                               Representatives from manufacturers and repair station operators told us
                               that they also took actions to manage operating and capital costs in
                               response to reduced demand for commercial and business aircraft,
                               engines, and other aviation components and associated maintenance
                               services throughout 2020. Representatives from several aircraft
                               manufacturers told us they reduced spending on things such as research
                               and development, marketing, advertising, and capital expenditures.
                               Representatives from three repair station operators told us they closed
                               facilities, delayed previously planned expansions, or deferred other
                               capital expenditures as demand for their services decreased.

Aviation Stakeholders
Used Federal Assistance
Programs to Mitigate
Financial Losses
Passenger Airlines Leveraged   To help offset losses and maintain business viability, passenger airlines
a Variety of Assistance        leveraged federal assistance that, among other things, subsidized
Programs                       employee payroll, provided liquidity, and made changes to tax provisions.
                               Up to $40 billion in financial assistance payments was made available for
                               passenger airlines by the two rounds of the Payroll Support Program
                               (PSP) established in COVID-19 relief legislation passed in 2020 and
                               another $14 billion in the third round of PSP established in legislation
                               passed in 2021. 49 According to data from Department of the Treasury
                               (Treasury), 354 first-round PSP and 302 second-round PSP agreements
                               were signed with passenger airlines for financial assistance payments
                               that totaled about $39.7 billion as of August 2021. The CARES Act also
                               authorized Treasury to provide up to $29 billion for loans and loan
                               guarantees to provide liquidity to passenger airlines, cargo airlines, repair


                               48These numbers are not mutually exclusive—one airport could have multiple projects,
                               some of which were delayed or cancelled, and others of which were accelerated.
                               49As a condition of accepting financial assistance under the Payroll Support Program,
                               Treasury required passenger airlines receiving more than $100 million and contractors
                               receiving more than $37.5 million to provide warrants or notes as taxpayer protection. The
                               American Rescue Plan Act of 2021 was enacted on March 11, 2021, and included a third
                               round of the Payroll Support Program. As of August 2021, Treasury was continuing to sign
                               agreements for assistance from the American Rescue Plan Act of 2021.




                               Page 25                                                GAO-22-104429 COVID-19 Pandemic
stations, and ticket agents. 50 Treasury executed loans that allowed 24
aviation-related businesses to bridge revenue declines and pay for
ongoing expenses, including payroll and rent; the majority of the loan
funds approved—$20.8 billion of a total $21.2 billion—were for seven
major passenger airlines. 51 In addition, representatives from airlines
reported using the tax provisions in the CARES Act 52—which included,
among other things, an employee retention credit and a delay in payment
of employer payroll taxes—to bolster their liquidity. Furthermore,
commercial aviation operators also benefited from a CARES Act provision
suspending certain commercial air transportation taxes, including those
on passenger tickets, cargo, and fuel. 53

Representatives from passenger airlines and credit rating agencies told
us that federal assistance was essential to cover airline passenger
expenses, keep employees on their payrolls, and help stem cash outflows
while passenger traffic levels were at historic lows. Representatives from
four airlines told us that the PSP program, in particular, provided critical
and timely support. For instance, representatives from two airlines
emphasized that the PSP program prevented furloughs that would have
resulted in employees filing unemployment claims and losing their health
care benefits. Representatives from one network airline told us that the
loans from Treasury also provided liquidity that was vital for them to
continue to operate and maintain their infrastructure until passenger

50CARES Act, § 4003, 134 Stat. at 470. Section 4003 also included up to $17 billion for
businesses critical to maintaining national security; however, no aviation businesses
applied for this assistance.
51As of August 1, 2021, seven aviation-related businesses had fully repaid their loans,
including six passenger airlines, as discussed later in this report. These seven loans have
a total authorized value of $18.3 billion. GAO has reviewed the implementation of the loan
program, including the impacts on both recipients and non-recipients, in prior work;
smaller businesses did not see the same benefits from the funds as large passenger
airlines. See: GAO, COVID-19: Continued Attention Needed to Enhance Federal
Preparedness, Response, Service Delivery, and Program Integrity, GAO-21-551
(Washington, D.C.: July 19, 2021); COVID-19: Sustained Federal Action is Crucial as
Pandemic Enters Its Second Year, GAO-21-387 (Washington, D.C.: March 31, 2021);
Financial Assistance: Lessons Learned from CARES Act Loan Program for Aviation and
Other Eligible Businesses, GAO-20-198 (Washington, D.C.: December 10, 2020); COVID-
19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions,
GAO-20-701 (Washington, D.C.: September 21, 2021); and COVID-19: Opportunities to
Improve Federal Response and Recovery Efforts, GAO-20-625 (Washington, D.C.: June
25, 2020).
52CARES Act, §§ 2301, 2302, 134 Stat. at 347-52.

53CARES Act, § 4007, 134 Stat. at 477.




Page 26                                                GAO-22-104429 COVID-19 Pandemic
                                 demand returned. The tax-related provisions had a smaller effect on
                                 airlines than PSP assistance, but representatives from two credit rating
                                 agencies noted that the provisions helped stem airlines’ cash outflows. 54
                                 For example, according to SEC financial reports, United Airlines elected
                                 to defer the payment of $199 million in payroll taxes incurred through
                                 December 31, 2020, and will pay half in December 2021 and the
                                 remaining balance in December 2022.

Airports Leveraged Flexible      According to our interviews, the results of our survey, and our previous
Federal Assistance to Make       reporting on federal COVID-19 assistance programs, airports of all sizes
Debt and Other Payments and      leveraged the flexibility of the federal grants provided for COVID-19 relief
Provide Assistance to Airlines   to make necessary debt and other payments and provide assistance to
and Tenants                      airlines and other airport tenants. 55 These federal grants of up to $20
                                 billion in total allowed airports to respond to the COVID-19 pandemic,
                                 including funding their operations and meeting their ongoing debt
                                 payments, although the funding allocation and allowable uses for the
                                 grants differ under the CARES Act and subsequent COVID-19 relief
                                 laws. 56 FAA has begun to collect data from airports on general spending
                                 categories for the federal COVID-19 relief funding, but officials said that



                                 54Airlines and aviation manufacturers reported using tax provisions of the CARES Act,
                                 including deferring employer payroll taxes, claiming employee retention credits, and
                                 carrying back five years net operating losses arising in tax years beginning in 2018, 2019,
                                 and 2020. Pub. L. No. 116-136, §§ 2301-2303, 134 Stat. at 347-56. The Consolidated
                                 Appropriations Act, 2021 made a number of changes to these provisions, including
                                 extending the availability of credits, among other changes. Pub. L. No. 116-260, div. N, §§
                                 206-207, 134 Stat. at 3059-65.
                                 55GAO-21-551.

                                 56The CARES Act, the Consolidated Appropriations Act, 2021, and the American Rescue
                                 Plan Act of 2021 provide a combined total of $20 billion in federal funding for U.S. airports
                                 to respond to the COVID-19 pandemic. As of May 14, 2021, of the $20 billion, about $10.6
                                 billion has been obligated and $6.5 billion expended by FAA. Under the CARES Act, funds
                                 were available for any purpose for which airport revenues may lawfully be used. Under the
                                 Consolidated Appropriations Act, 2021 and the American Rescue Plan of 2021, funds
                                 were generally available for costs related to operations, personnel, cleaning, sanitization,
                                 janitorial services, combating the spread of pathogens at the airport, and debt service
                                 payments. According to FAA guidance, examples of eligible development to combat the
                                 spread of pathogens at the airport include replacing or upgrading a heating, ventilation,
                                 and air conditioning system, and reconfiguring the terminal to accommodate increased
                                 social distancing or health screening. Additionally, under the Consolidated Appropriations
                                 Act, 2021 and the American Rescue Plan Act of 2021, certain amounts were made
                                 available to provide relief from rent and minimum annual guarantees to airport
                                 concessions.




                                 Page 27                                                 GAO-22-104429 COVID-19 Pandemic
they will have limited information until airports draw down all funds for
reimbursed costs. 57

In our interviews, representatives from large and medium hub airports told
us they appreciated the flexibility they had to use the CARES Act grant
funding. Representatives from six large and medium hub airports told us
they prioritized using the funds for routine, large expenses such as debt
service payments and payroll. Representatives from one of these airports
specified that they prioritized large expenses because they were among
the easiest to have reimbursed by FAA. Three told us they also used the
CARES Act grant funding to provide indirect relief to concessionaires
such as gift shops and restaurants. 58 In addition, representatives from
four large and medium hub airports told us they used the funding to avoid
increasing rates they charge airlines. Airports assess fees on airlines for
the use of the airport based on negotiated agreements. These
agreements vary in whether the airline or the airport bears the risk if the
fees paid by airlines and others do not fully cover the airport’s costs. In
cases where the agreement requires the airlines to make up the
difference, the dramatic fall in traffic meant that fees paid by airlines
would have had to rise to cover the shortfall. Representatives from large
and medium hub airports with such agreements told us they applied
CARES Act grant funding to certain costs to airlines to keep fees paid by
airlines for landing and terminal rentals flat, when otherwise fees would
have had to rise due to decreased traffic.

Based on our survey of smaller airports, we estimate that about 90
percent of smaller airports received a CARES Act Airport Grant. Of those,
about half used the funds for payroll and labor expenses. When asked to
describe ways in which the CARES Act worked well in providing support,

57FAA has begun to collect and consolidate data from airports on general spending
categories for CARES Act funding through grant close-out reports, which are completed
once all allocated airport funds have been expended. As of May 14, 2021, FAA officials
said that 476 CARES Act airport grants, totaling $1.66 billion, have been closed out. For
these grants, the majority of airport grant funds have been used for debt service (about 52
percent of these funds, totaling $864 million) and payroll (about 39 percent of these funds,
totaling $643 million). While FAA continues to collect these data on airport grant spending,
officials said airports are generally using CARES Act funds on payroll, utilities, minor
maintenance, and debt service.
58The Consolidated Appropriations Act, 2021 and American Rescue Plan Act of 2021
appropriated funds for sponsors of primary airports to provide relief from rent and
minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal
airport concessions.




Page 28                                                 GAO-22-104429 COVID-19 Pandemic
                               87 airports specifically noted that the CARES Act allowed them to avoid
                               either layoffs, furloughs of staff, or both. Smaller airports also used the
                               funds for utilities, equipment, and debt service. Furthermore, we estimate
                               that about one-quarter of smaller airports, and disproportionately small
                               hub and non-hub airports, provided rent or other relief to their tenants, 59
                               such as deferring payments, waiving payments, and changing or
                               adjusting lease agreements. 60

Other Aviation and Aerospace   Several other aviation and aerospace stakeholders leveraged federal
Stakeholders Also Leveraged    assistance, although the assistance they received was smaller in
Federal Assistance             magnitude than that provided to passenger airlines and airports. For
                               example:

                               •   Manufacturers: Representatives from one manufacturer told us they
                                   used tax provisions in the CARES Act to bolster the company’s
                                   liquidity, and another manufacturer reported taking similar action. 61
                                   For example, one manufacturer reported using the 5-year net
                                   operating loss carryback provision that enabled it to record tax
                                   benefits of nearly $1.2 billion. The five manufacturers we spoke to did
                                   not pursue CARES Act loans. Generally, representatives told us they
                                   preferred maintaining flexibility in their business decision-making and
                                   chose not to pursue such loans because the requirements associated


                               59The estimated percentage (lower bound, upper bound) of airports reporting having
                               provided any rent or other relief to any of the tenants operating at the airport was 81 (69,
                               90) percent for small hub airports, 78 (76, 80) percent for non-hub airports, 44 (42, 47)
                               percent for non-primary commercial service airports, and 16 (13, 19) percent for general
                               aviation and reliever airports. The margins of error between the estimate for the small hub
                               airports and the upper or lower bounds were greater than 10 percentage points. This
                               estimate should be interpreted with caution.
                               60When asked to describe types of rent or other relief provided to tenants at the airport,
                               289 airports provided a valid written response. Of these responses, 152 airports stated
                               they deferred payments for tenants, 117 stated they waived payments from tenants, and
                               77 airports stated they changed and/or adjusted leases and agreements, including
                               reducing rates and fees. Airports may have reported taken more than one measure, so
                               totals will not add up to 100 percent.
                               61As mentioned above, airlines and aviation manufacturers reported using the tax
                               provisions in the CARES Act, including deferring employer payroll taxes, claiming
                               employee retention credits, and carrying back five years net operating losses arising in tax
                               years beginning in 2018, 2019, and 2020. These provisions were not limited to aviation
                               industry businesses. Pub. L. No. 116-136, §§ 2301-2303, 134 Stat. at 347-56. The
                               Consolidated Appropriations Act, 2021 made a number of changes to these provisions,
                               including extending the availability of credits, among other changes. Pub. L. No. 116-260,
                               div. N, §§ 206-207, 134 Stat. at 3059-65.




                               Page 29                                                 GAO-22-104429 COVID-19 Pandemic
    with accepting assistance—which included maintaining certain
    employment levels–were too restrictive. 62
    Some aviation businesses, including smaller companies in the
    manufacturing supply chain, received Paycheck Protection Program
    (PPP) loans to help sustain them through the period of decreased
    demand during the pandemic. 63 Representatives from one large
    manufacturer told us they understood that a number of the companies
    in their supply chain had received PPP loans, and that those loans
    were a significant help for businesses that had been affected by the
    grounding of the Boeing 737 MAX aircraft in addition to the COVID-19
    pandemic.
•   Repair station operators: Treasury executed CARES Act loans
    totaling $19 million with five of the 41 repair station operators that

62Under the Section 4003 Loan Program, recipients agreed to maintain employment levels
to the extent practicable and in any case not reduce employment levels by more than 10
percent until September 30, 2020. CARES Act, § 4003(c)(2)(G), 134 Stat. at 471. Under
other programs, including PSP1, PSP2, and PSP3, recipients agreed to refrain from
conducting involuntary furloughs. CARES Act, § 4114(a)(1), 134 Stat. at 499;
Consolidated Appropriations Act, 2021, § 404, 134 Stat.at 2055; American Rescue Plan
Act of 2021, § 7301, 135 Stat. at 104-05. Additionally, the American Rescue Plan Act of
2021, passed in March 2021, included $3 billion to establish an Aviation Manufacturing
Jobs Protection program. Through this program, the Department of Transportation (DOT)
is to provide up to $3 billion in funding to eligible manufacturing companies to pay up to
half of their compensation costs for certain categories of employees, for up to six months.
63The CARES Act and the Paycheck Protection Program and Health Care Enhancement
Act appropriated a total of $670 billion for the Paycheck Protection Program (PPP) under
the Small Business Administration’s (SBA) 7(a) small business lending program. PPP
loans are made at 1 percent interest and will be fully forgiven if certain conditions are met.
These loans can be used for payroll and certain non-payroll costs. In general, small
businesses with 500 or fewer employees, including tax-exempt nonprofit organizations,
veterans organizations, and tribal businesses were eligible. Businesses in certain
industries with more than 500 employees were eligible for loans. We previously reviewed
the characteristics of PPP loans and the trends in small business and lender participation
in PPP. See Paycheck Protection Program: Program Changes Increased Lending to the
Smallest Businesses and in Underserved Locations, GAO-21-601 (Washington, D.C.:
Sept. 21, 2021). We also reviewed aspects of SBA’s implementation of the PPP, including
safeguards that SBA put in place to prevent improper payments and fraud. See Paycheck
Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed,
GAO-21-577 (Washington, D.C.: July 29, 2021). Additionally, GAO previously found that
SBA could take actions to improve oversight and fraud risk management of the PPP
program. See, for example, COVID-19 Loans: SBA has Begun to Take Steps to Improve
Oversight and Fraud Risk Management, GAO-21-498T (Washington, D.C.: Apr. 20, 2021);
Small Business Administration: Actions Needed to Improve COVID-19 Loans’ Internal
Controls and Reduce Their Susceptibility to Fraud, GAO-21-472T (Washington, D.C.: Mar.
24, 2021); and Small Business Administration: Steps Needed to Address COVID-19
Loan’s Susceptibility to Fraud, GAO-21-449T (Washington, D.C.: Mar. 25, 2021).




Page 30                                                  GAO-22-104429 COVID-19 Pandemic
                               applied to the program. 64 In addition to assistance from Treasury
                               loans, the three rounds of PSP made up to $5 billion in financial
                               assistance payments available to certain aviation contractors,
                               including repair station operators. Two of the three repair station
                               operators we interviewed received between $46 and $51 million in
                               first-round PSP assistance payments. Representatives from one
                               repair station operator said they used the assistance to retain their
                               experienced workforce, perform necessary maintenance on their
                               tooling and equipment, and perform training to keep their workforce
                               current, among other things.
                           •   Cargo airlines: Of the $4 billion appropriated for cargo airlines under
                               the first round of PSP assistance to cover payroll expenses, only a
                               fraction of the funding was used—thirty-nine cargo airlines received
                               over $828 million in assistance. 65 Two cargo airlines received over
                               two-thirds of these funds—$568 million. The two charter cargo airlines
                               we spoke with received $35 million and $22 million of first-round PSP
                               assistance. Representatives from both cargo airlines emphasized the
                               importance of the support, stating that the assistance was critical in
                               helping them through the first few months of the pandemic when they
                               experienced a large decrease in demand. Representatives from one
                               of the charter cargo airlines stated that without the PSP assistance,
                               their airline would not have been in a financial position to survive the 3
                               to 4 months it took for their cargo business to return. They used the
                               assistance to keep employees in place so that they were available
                               when demand returned.

Aviation and Aerospace     In addition to receiving assistance from the various federal COVID-19
Stakeholders Raised        relief programs, many commercial aviation and aerospace stakeholders
                           also raised funding in the financial markets to position themselves to
Funding in the Financial
                           maintain business viability until demand recovers. Representatives from
Markets                    several aviation industry associations and credit rating agencies told us
                           that assistance from the CARES Act provided a degree of assurance in

                           64In previous work we reported that representatives from smaller businesses told us the
                           Treasury loan program did not work or did not work as well as it could have. See
                           GAO-21-551.
                           65In October 2020, Representative James E. Clyburn, Chairman of the Select
                           Subcommittee on the Coronavirus Crisis, sent letters to four cargo airlines that received a
                           total of more than $630 million in PSP assistance, stating that it had appeared that the
                           airlines “had financial success” during the COVID-19 pandemic. His letters called on the
                           airlines to return the PSP assistance or demonstrate that they needed the funds to keep
                           workers on their payroll, as Congress intended. As of September 2021, these airlines
                           have not returned the funds. Assistance for cargo airlines was not included in the
                           subsequent federal COVID-19 relief programs.




                           Page 31                                                 GAO-22-104429 COVID-19 Pandemic
the stability of the market that enabled private lenders to invest in the
aviation industry with greater confidence that they would be able to
recoup their investments.

Major U.S. passenger airlines added an estimated $58 billion in private
and federal long-term debt by the end of 2020, with their interest
expenses expected to more than double in the next few years, according
to A4A. As discussed earlier, throughout 2020, airlines were expending
cash reserves at a rate faster than revenues could replenish and
recognized that additional financing was needed to manage the dramatic
drop in passenger revenue and cover fixed costs. According to public
SEC financial reports, airlines issued or entered into new secured notes,
loan facilities, and new aircraft financings, and raised cash proceeds from
the issuance and sale of common stock, among other actions. For
example, United Airlines reported $16 billion in proceeds from the
issuance of debt and $2.1 billion in proceeds from equity issuance in
2020, with a total of $27.2 billion in debt and finance lease obligations at
the end of 2020. Four passenger airlines—American Airlines, Hawaiian
Airlines, Sun Country, and United Airlines—also turned to the financial
markets in the first half of 2021 to raise funds that allowed them to pay
back their CARES Act loans from the federal government. 66

In some cases, aviation stakeholders pursued financing instead of federal
COVID-19 relief assistance, citing various reasons they did not seek
government financial support. Representatives from an aviation
manufacturer described the provisions attached to the CARES Act loans
as too restrictive and costly, stating that the company was not interested
in providing the government with an equity stake or restricting its ability to
reduce employment, as required by the loan program. Instead,
representatives told us the manufacturer was able access the credit
markets to obtain needed capital after the Federal Reserve’s willingness
to backstop the credit markets opened up credit options. 67 Separately,
another manufacturer was able to issue $25 billion in new long-term debt

66Two additional airlines—Alaska Airlines and SkyWest—also paid back their CARES Act
loans from the federal government in the first half of 2021; however, their publicly
available financial statements do not indicate the specific source of the funding used to
repay these loans.
67We previously reported on the lending programs the Board of Governors of the Federal
Reserve System authorized to ensure the flow of credit to various parts of the economy
affected by the COVID-19 pandemic. See GAO, Federal Reserve Lending Programs: Use
of CARES Act-Supported Programs Has Been Limited and Flow of Credit Has Generally
Improved, GAO-21-180 (Washington, D.C.: Dec. 10, 2020).




Page 32                                                 GAO-22-104429 COVID-19 Pandemic
                             in April 2020 to bolster its liquidity and thus did not pursue any CARES
                             Act loans.

Aviation and Aerospace
Stakeholders Took Steps
to Mitigate the Spread of
COVID-19
Protecting Employee Health   Stakeholders across aviation and aerospace sectors reported taking
                             actions to protect employee health in 2020. These include such actions
                             as requiring and providing masks, providing other personal protective
                             equipment, implementing social distancing, and allowing employees to
                             work from home when possible. 68 For example, representatives from a
                             network airline reported providing on-site COVID-19 testing at its airport
                             hubs and providing at-home testing for U.S. based employees. 69 Airlines
                             also reported implementing remote work for employees able to do so,
                             such as support center staff. Similarly, representatives from airports told
                             us they implemented mask and social distancing requirements for
                             employees and allowed some staff to work remotely. 70 Representatives
                             from a cargo airline with its own repair station told us that to maintain
                             social distancing among employees, they had to limit the number of
                             mechanics working on a given aircraft as well as the number of
                             mechanics working on the same part of an aircraft at the same time.
                             Representatives from manufacturers told us they implemented
                             temperature checks and added social distancing where possible,




                             68Personal protective equipment includes items such as N95 respirators, surgical and
                             non-surgical masks, face shields and goggles, and gloves, among other items. Social
                             distancing, also known as physical distancing, is the practice of maintaining physical
                             distance from others and avoiding large gatherings, with the intent of reducing the rate of
                             transmission of infectious diseases. COVID-19 brought social distancing practices to the
                             forefront worldwide as a means of controlling local spread of the disease.
                             69Diagnostic testing for COVID-19 is critical to controlling and understanding the spread of
                             the virus, according to the CDC. We previously reported on the types of COVID-19 testing
                             in GAO, Science & Tech Spotlight: COVID-19 Testing, GAO-20-584SP (Washington,
                             D.C.: May 20, 2020).
                             70Within commercial airports, the Transportation Security Administration (TSA) has
                             responsibility for passenger screening checkpoints. For a review of measures
                             implemented by TSA to protect its screening workforce and the traveling public, see GAO,
                             COVID-19: TSA Could Better Monitor Its Efforts to Reduce Infectious Disease Spread at
                             Checkpoints, GAO-21-364 (Washington, D.C.: June 14, 2021).




                             Page 33                                                 GAO-22-104429 COVID-19 Pandemic
                               including in production areas. 71 Representatives from two manufacturers
                               also told us they developed protocols for contact tracing if employees
                               reported positive COVID-19 infections. 72

Protecting Passengers and      Airlines and airports also took actions in 2020 with an intent to protect
Increasing Confidence in the   passengers and increase passenger confidence in the air travel
Air Travel Experience          experience. 73 Representatives from airlines and airports we spoke to
                               emphasized the enhanced cleaning protocols they implemented
                               throughout their airports and on aircraft. Some airlines also changed their
                               onboard food and beverage services to reduce interactions between
                               passengers and crew and blocked the sale of middle seats to allow for
                               greater distancing between passengers. Representatives from one airline
                               and seven airports also told us they implemented contactless technology
                               to reduce interaction between passengers and employees, such as
                               adding automated bag drops and biometric ID checks. Representatives
                               from six airports also told us it was important to implement consistent
                               messaging and expectation setting about mask and social distancing
                               requirements throughout their airports to help passengers navigate
                               differences in requirements at different destinations (see figure 5). While
                               some of these measures, such as contactless technology, may be
                               maintained in the long-term, others have been changing as public health
                               needs have evolved with the rollout of vaccines and the beginning of
                               pandemic recovery. 74




                               71Centers for Disease Control and Prevention (CDC) guidance states that screening
                               employees for symptoms of COVID-19, such as a fever, is an optional strategy employers
                               may use to reduce the spread of COVID-19 in the workplace.
                               72Contact tracing is a process in which public health officials attempt to limit disease
                               transmission by identifying infected individuals, notifying their “contacts”—all the people
                               they may have transmitted the disease to—and asking infected individuals and their
                               contacts to quarantine, if appropriate.
                               73We have not evaluated the effectiveness of these actions, but we are currently reviewing
                               the research surrounding the transmission of communicable disease in air travel.
                               74Two COVID-19 vaccines using a two-dose regimen (Pfizer and Moderna) were
                               authorized for emergency use in December 2020 and a third, one-dose vaccine (Johnson
                               & Johnson) was authorized in February 2021. As of June 23, 2021, about 323 million
                               vaccine doses have been administered, according to data reported to CDC, and about
                               53.1 percent of the U.S. population 12 and over—almost 150.7 million individuals—have
                               been fully vaccinated. For additional information, see GAO-21-551.




                               Page 34                                                  GAO-22-104429 COVID-19 Pandemic
Figure 5: Sign at Hartsfield-Jackson Atlanta International Airport with COVID-19
Requirements and Reminders




Page 35                                            GAO-22-104429 COVID-19 Pandemic
FAA Provided Airlines
and Other Aviation
Sectors Temporary
Relief from Some
Regulatory
Requirements and
Selected
Stakeholders Said the
Changes Were
Helpful
FAA Granted Airlines’    In March 2020, FAA began granting specific and temporary regulatory
Requests for Temporary   relief, including granting regulatory waivers, approving operational
                         adjustments, and issuing guidance, in response to requests from airlines,
Relief from Meeting
                         airports, and their industry associations (see table 1). As aviation activity
Certain Regulatory       declined with the start of the pandemic, airlines and aviation associations
Requirements             sought FAA’s assistance to ease regulatory and operational requirements
                         that they claimed negatively affected the safety and continuity of aviation
                         operations. For example, Airlines for America and National Air
                         Transportation Association petitioned FAA on behalf of their members for
                         exemptions to regulations requiring crewmembers to don emergency
                         equipment (e.g., oxygen masks and life vests) during training. 75 These
                         associations explained that, without a temporary exemption, such
                         procedures could lead to the transmission of COVID-19. Associations
                         also petitioned FAA for regulatory relief that would allow them to make
                         operational changes. For example, Airlines for America petitioned FAA for
                         exemptions that would allow airlines to transport cargo in a plane’s
                         passenger cabin when no passengers were present. 76 Airlines for
                         America explained that some airlines might want to use their excess
                         capacity to carry cargo, including critical medical cargo.




                         7514 C.F.R. § 121.417. See Regulatory Docket No. FAA-2020-0307 and FAA-2020-0291.

                         76See Regulatory Docket No. FAA-2020-0492.




                         Page 36                                           GAO-22-104429 COVID-19 Pandemic
Table 1: Federal Aviation Administration (FAA) Pandemic Relief Actions, March 2020-July 2021

                                                                                                            Effective Date/Expiration
FAA Relief Actions (as of July 2021)                                                                        Date (if applicable)
Regulatory Relief
FAA’s exemptions—Exemption 18510 and 18511—extended the timeframes for charter carriers’ and                March 2020/ March 2021
commercial airlines ground personnel, crewmembers, and dispatchers to complete recurring training
and qualification requirements. FAA granted 3 extensions for each exemption. See Regulatory Docket
No. FAA-2020-0292 and FAA-2020-0308 respectively.
FAA’s exemptions—Exemption 18515 and 18516—extended the duration of medical certificates for                March 2020/ June 2020
pilots and flight engineers operating flights outside of the U.S. FAA subsequently broadened the
medical relief to all pilots and flight engineers through the issuance of the Special Federal Aviation
Regulation (see below). See Regulatory Docket No. FAA-2020-0317 and FAA-2020-0318 respectively.
FAA’s exemptions—Exemption 18509 and 18512—allowed airline crewmembers to use alternate                     March 2020/ March 2021
means when conducting required emergency procedures during training, testing, and checking. For
example, crewmembers were exempted from having to don oxygen masks or life vests during training.
FAA granted 3 extensions for each exemption. See Regulatory Docket No. FAA-2020-0291 and FAA-
2020-0307 respectively.
FAA waived the minimum usage requirement for airlines using runway slots (i.e., a take-off or landing)      March 2020/ October 2021
associated with a scheduled nonstop flight between John F. Kennedy International, New York
LaGuardia, and Ronald Reagan Washington National airports and other points that were cancelled as
a result of pandemic-related impacts. FAA also provided similar relief to airlines using Chicago O’Hare
International, Newark Liberty International, Los Angeles International, and San Francisco International
airports that prioritized flights cancelled due to pandemic-related impacts for purposes of establishing
an airline’s operational baseline in the next corresponding season. FAA granted 3 extensions. See
Notice of Limited Waiver of the Slot Usage Requirement 85 Fed. Reg. 15,018 (Mar. 16, 2020).a
FAA’s partial exemptions—Exemption 18561 and 18584—allowed commercial airlines to carry cargo               May 2020/ July 2021
on seats and floors in airplanes when no passengers are transported. FAA granted 2 extensions for
exemption 18561 and 1 extension for exemption 18584. See Regulatory Docket No. FAA-2020-0429.
FAA’s exemption—Exemption 18522—allowed flight attendants to relocate seats they would normally             April 2020/ June 2021
occupy in order to comply with recommendations from the Centers for Disease Control and Prevention
concerning proximity to others. It also waived the requirement to don oxygen masks and other
equipment during passenger safety briefings. FAA granted 3 extensions. See Regulatory Docket No.
FAA-2020-0372.
FAA’s Special Federal Aviation Regulation 118 (SFAR) provided relief to training, testing, qualification,   April 2020/ April 2021
and medical certification requirements pertaining to pilots, mechanics, and dispatchers. This included
granting relief for non-commercial operations to individuals or companies that were unable to meet
training duration and renewal requirements. The relief allowed the continued use of pilots and other
crewmembers in support of essential operations. The SFAR also made it easier for operators to move
aircraft from one storage facility to another. FAA granted 2 extensions. Relief from Certain Persons
and Operations During the Coronavirus Disease 2019 (COVID-19) Outbreak, 85 Fed. Reg. 26,326
(May 4, 2020).
FAA’s exemption—Exemption 18537—extended the timeframes for air ambulance personnel to                      April 2020/ December 2020
complete recurring training and testing requirements. FAA granted 2 extensions. See Regulatory
Docket No. FAA-2020-0412.
Operational Adjustments
FAA allowed airlines to park unused aircraft that overflowed ordinary parking areas at airports and         March 2020/ Dates varied
issued guidance to airport operators on developing a plan to park overflow aircraft and when to close       but most overflow aircraft
runways and taxiways for temporary aircraft parking.                                                        removed by late fall 2020




                                             Page 37                                                  GAO-22-104429 COVID-19 Pandemic
                                                                                                                                  Effective Date/Expiration
 FAA Relief Actions (as of July 2021)                                                                                             Date (if applicable)
 FAA reduced operating hours of some air traffic control towers in response to decreased air traffic                              April 2020/ March 2021
 operations.
 FAA allowed airlines that temporarily removed aircraft from service to deviate from their normal aircraft                        June 2020/ August 2021
 maintenance program while the aircraft was grounded.
 FAA closed air traffic control towers during COVID-19 outbreaks.                                                                 July 2020/ Ongoing
 Guidance and Enforcement Actions
 The Department of Transportation (DOT) issued an enforcement notice to international passengers                                  March 2020
 that airlines may refuse transportation to passengers with COVID-19 symptoms because they pose a
 direct health and safety threat.
 DOT issued an enforcement notice to airlines requiring prompt refunds for cancelled flights.                                     April 2020
 FAA issued health and safety alerts and policies covering a range of topics from health guidance for                             Various
 crews to prevent spread of COVID-19, to safely transporting dry ice, to the observation period after
 pilots and air traffic controllers get vaccinated.
 FAA/DOT, in collaboration with Department of Homeland Security and Department of Health and                                      July 2020
 Human Services, issued an update to Runway to Recovery, a guide for airlines and airports to mitigate
 the public health risks of COVID-19. FAA/DOT published an update in December 2020.
 FAA directed its investigative personnel to take stricter action in the form of civil penalties against                          January 2021
 unruly airline passengers who assault, threaten, intimidate, or interfere with airline crew members.
Source: GAO analysis of Federal Aviation Administration information. | GAO-22-104429
                                                                 a
                                                                  See also Notice of Extension of Limited Waiver of the Minimum Slot Usage Requirement, 85 Fed.
                                                                 Reg. 21,500 (Apr. 17, 2020); Extension of Limited Waiver of the Minimum Slot Usage Requirement,
                                                                 85 Fed. Reg. 63,335 (Oct. 7, 2020); and FAA Policy Statement: Limited, Conditional Extension of
                                                                 COVID-19 Related Relief for the Summer 2021 Scheduling Season (Docket No. FAA-202-0862) (Jan.
                                                                 13, 2021).


                                                                 During 2020, FAA granted stakeholders’ requests for extensions of
                                                                 regulatory relief as it determined that pandemic conditions warranted
                                                                 relief, but as of July 2021, most of FAA’s relief measures had expired. By
                                                                 mid-2021, the public health emergency diminished, aviation operations
                                                                 began to normalize, and aviation stakeholders did not petition FAA for
                                                                 further extensions. In granting some extensions, FAA identified additional
                                                                 ways to mitigate potential safety impacts that might result from the
                                                                 extensions. For example, FAA phased out medical certification grace
                                                                 periods for crewmembers who had already been granted extensions and
                                                                 extended the grace period relief to new cohorts of crewmembers facing
                                                                 imminent expiration dates.

                                                                 According to FAA officials, the agency granted regulatory relief and
                                                                 issued guidance using its standard processes in most cases. For
                                                                 example, FAA followed its standard procedure in publicizing airlines’
                                                                 petitions for regulatory exemption and accepting public comments on




                                                                 Page 38                                                   GAO-22-104429 COVID-19 Pandemic
those petitions. 77 However, FAA expedited some processes, which,
according to FAA officials, helped both the airlines and FAA. For
example, FAA did not require airlines to submit petitions for exemption
120 days before the desired effective date of the exemption, 78 allowed
industry associations to submit petitions on behalf of their members, and
granted exemptions to all affected airlines that submitted a letter of
intent. 79 This change expedited relief because it removed the requirement
that each airline must petition individually for an exemption and thus
removed the need for FAA to evaluate multiple individual petitions for the
same relief. FAA’s exemption letters, waivers, and Special Federal
Aviation Regulation (SFAR) 80 summarize the agency’s reasons for
granting relief, its assessment of potential safety impacts, and any
additional requirements airlines accepting relief must follow.

According to FAA officials, FAA’s foremost considerations in evaluating
the stakeholder requests for regulatory relief were whether the relief
measure would have an adverse effect on safety or would not be in the
public interest, and would facilitate the continuity of aviation operations.

77FAA published some petitions for regulatory exemptions in a regulatory docket and other
petitions in the Federal Register depending on the waiver sought. For example, in one
regulatory exemption, FAA found good cause under 14 C.F.R. § 11.87 not to publish a
summary of the petition in the Federal Register because “delaying action on the petition
would have an adverse and potentially immediate impact on the petitioner’s ability to
ensure continuity of critical air ambulance operations essential to the public interest.” In
the Matter of the Petition of Air Medical Operators Association, Exemption No. 18537 (Apr.
30, 2020).
78Aviation stakeholders affected by a regulation in Title 14 of the Code of Federal
Regulations may petition for an exemption from any rule issued by FAA under its statutory
authority. The regulations governing this process (14 C.F.R. pt. 11) describe the steps for
petitioning for exemptions. These steps include submitting the petition 120 days before it
is needed to take effect, describing the relief needed, reasons it would not affect safety,
and other information. FAA publishes information about petitions for exemption in the
Federal Register. 14 C.F.R. § 11.85.
79FAA directed airlines that were requesting an exemption to submit a letter of intent to
FAA. The letter of intent required the airline to affirm its request to use the exemption and
its intentions to comply with the conditions and limitation of the exemption. Some
exemptions contained other requirements, such as evaluating and describing how the
airline would prevent negative safety impacts.
80According to FAA, an SFAR pertaining to airspace is typically a temporary rule to
address a temporary situation. Further, FAA notes that an SFAR is generally not used to
replace or enforce regulations that are to remain in effect for many years. Consequently,
an SFAR has an expiration date, usually no more than 3 years from its effective date.
SFARs are listed at the beginning of the most relevant Code of Federal Regulations, and
may be cross-referenced to other regulations. SFARs can prohibit, restrict, or impose
additional requirements to operate in the airspace to which the SFAR applies.




Page 39                                                  GAO-22-104429 COVID-19 Pandemic
                            FAA officials said that focusing on aviation stakeholder requests enabled
                            the agency to quickly address the most critical operational issues.

                            FAA took other actions in addition to providing regulatory relief. For
                            example, in March 2020, FAA created a rapid response team that was a
                            focal point for gathering and responding to airport operators’ and other
                            stakeholders’ questions and concerns. According to FAA officials, the
                            team’s main purpose was to create a channel of communication with
                            industry, quickly tackle any issue brought to its attention, and elevate
                            issues that need broader attention. For example, the team fielded
                            questions ranging from where to obtain hand sanitizer to who needs to
                            know about overflow aircraft parking plans. Since its inception, the team
                            has cataloged over 750 requests for information and policy decisions.

Airlines Credited FAA for   The airlines we contacted commented that FAA’s actions demonstrated
Quick Actions in Support    its ability to provide operational relief quickly. FAA officials stated that the
                            agency’s efficiency was due in part to industry input because industry
of Continuing Operations
                            stakeholders—particularly airline associations—identified regulatory relief
                            that was critical to continuing operations. According to FAA officials, some
                            exemptions were beneficial to airlines and the public because the
                            exemptions enabled airlines to maintain qualified crewmembers. These
                            officials said other exemptions were beneficial because they reduced
                            crewmembers’ potential exposure to COVID-19 during training or
                            operations and two airlines we contacted agreed. For example, one
                            airline said that by allowing flight attendants to sit in seats throughout the
                            plane at a distance from crewmembers and passengers (not in their
                            designated jump seat), FAA likely helped airlines reduce the spread of the
                            virus. FAA officials stated that it was up to each airline whether to apply
                            for regulatory relief and that not all airlines did so. The airlines we
                            contacted said they chose the exemptions that fit their operations. One
                            airline ceased training pilots on aircraft used for international flights while
                            another allowed its flight dispatchers to work from home. One airline
                            official stated that although exempting crewmembers from demonstrating
                            safety equipment was likely only marginally helpful, pilots and flight
                            attendants appreciated that their safety was being acknowledged.




                            Page 40                                         GAO-22-104429 COVID-19 Pandemic
The Extent of Industry
Recovery Remains
Uncertain and
Stakeholders
Identified
Considerations for
Potential Federal
Support
Uncertainty about the
Ongoing Recovery
Remains despite Rebound
in U.S. Leisure Travel
Recovery in U.S. Leisure   Passenger airlines experienced a resurgence in demand for domestic
Travel is Slowing          leisure travel in the spring and summer of 2021; however, their recovery
                           has been slowed by operational challenges and concerns about the
                           COVID-19 Delta variant. In March 2021, the credit rating agency Fitch
                           Ratings noted that a decline in COVID-19 death rates could be sufficient
                           to loosen pandemic restrictions, increase consumer comfort with the idea
                           of traveling, and begin a rebound in air travel. 81 Fitch cautioned that the
                           emergence of highly transmissible variants could extend the pandemic
                           and delay a recovery in air travel in the United States and Canada.

                           According to the most recent BTS data available as of September 2021,
                           passenger airlines carried 66 million passengers within the United States
                           in July 2021, which was more than double passenger levels in either
                           January or February 2021, and a roughly 191 percent increase compared
                           to July 2020. In response to increasing demand for domestic leisure
                           travel, U.S. airlines began adapting flight operations and their workforce
                           levels in spring 2021. For example, in April 2021, United Airlines
                           announced plans to hire 300 new pilots, and American Airlines
                           announced it would add 150 new routes on its network in summer 2021.


                           81Fitch Ratings, North American Airline and Airport Pressures to Ease, Accelerating
                           Recovery Later This Year, Fitch Wire (Mar., 11, 2021).




                           Page 41                                               GAO-22-104429 COVID-19 Pandemic
On June 11, 2021, 2 million people crossed TSA airport security
checkpoints, the highest level since March 7, 2020. 82

However, in certain cases, the fast rebound in demand for air travel has
exceeded airlines’ ability to return capacity to service, resulting in
cancelled and rescheduled flights. For example, Spirit Airlines cancelled
more than 2,000 flights between late July and early August. According to
airlines, the increase in cancellations are due to a combination of staffing
shortages, weather, and information technology problems. 83 As noted
above, many airlines reduced their staffing through voluntary and
involuntary measures as a cost cutting measure and are now trying to
hire and train more staff. However, retraining and recertifying some staff,
especially pilots, can be a lengthy process.

The emergence and spread of the COVID-19 Delta variant appears to
have contributed to weakened demand for air travel in late summer 2021.
On July 27, 2021, prompted by a rise in COVID-19 case and
hospitalization rates around the country, the CDC released updated
guidance urging an increase in vaccination coverage around the country
and recommending that people in areas of substantial or high
transmission wear a mask in public or indoor places, even if they are fully
vaccinated. On August 11, Southwest Airlines reported that bookings
have slowed and trip cancellations have increased, which the airline
attributed to the recent rise in COVID-19 cases associated with the Delta
variant. According to the Airlines Reporting Corporation, tickets sales for
the week of August 9 were down 41 percent compared to 2019, the worst
differential between 2021 and 2019 sales since mid-May. The TSA
reported that it screened 1,607,238 air passengers on August 17, a 28
percent decline from the 2,238,462 passengers screened on August 1.
However, this decline also coincided with the summer travel season


82In June, the Centers for Disease Control and Prevention (CDC) updated its guidance to
advise that fully vaccinated travelers could safely travel within the United States and U.S.
territories provided that they continue to wear a mask as required on planes, buses, trains,
and other forms of public transportation traveling into, within, or out of the United States
and while indoors at U.S. transportation hubs such as airports and stations. The CDC also
advised that travelers follow all state and local recommendations and requirements,
including for mask wearing and social distancing.
83In 2019, we reported on airline technology issues, noting that federal regulators do not
have data on airline technology outages, but we noted at least 34 instances of outages
and the vast majority resulted in delays and cancellations. GAO, Commercial Aviation:
Information on Airline IT Outages, GAO-19-514 (Washington DC; Jun 12, 2019).




Page 42                                                 GAO-22-104429 COVID-19 Pandemic
                                 winding down; in August 2019, there was a 16 percent decline in
                                 passengers screened over the same period.

International and Business Air   Although U.S. airlines experienced a rebound in demand for domestic
Travel Continue to Lag           leisure travel in 2021, demand for international and business travel has
                                 lagged and is likely to continue to do so, according to aviation industry
                                 stakeholders including credit rating agencies and consulting firms. As
                                 discussed previously, international and business travel are critical
                                 contributors to the profitability of network airlines. According to McKinsey,
                                 for example, business travelers can account for 55–75 percent of airline
                                 profits. 84 Some stakeholders project that it will take until sometime in the
                                 2023–2025 period for a return to pre-pandemic traffic levels. These
                                 stakeholders note that international and business travel recovery are also
                                 dependent on factors including the progress of vaccine dissemination
                                 outside of the U.S. and the extent to which businesses continue to use
                                 videoconferencing in lieu of in-person meetings.

                                 Demand for international air travel remains depressed in late summer
                                 2021, and may not recover to pre-pandemic levels for several years,
                                 according to industry observers. International air travel remains roughly
                                 40 percent below 2019 levels in early September 2021, according to A4A,
                                 and the consulting firm Oliver Wyman has projected that, based on
                                 pandemic-related travel restrictions, the growing number of infections due
                                 to COVID-19 variants, and the lack of progress in vaccine dissemination
                                 outside of the United States, international travel will not recover until 2023
                                 or 2024. 85

                                 Industry analysts also expect a lag in the return of demand for business
                                 air travel. Moody’s reported in March 2021 that the extent to which virtual
                                 meetings will replace business travel in the longer term is unknown, and
                                 estimated that 10–30 percent of this segment may not return after the
                                 pandemic. According to Moody’s, factors that may limit the recovery of
                                 business travel include (1) greater use and familiarity with virtual meeting
                                 technologies, (2) a desire to continue to reap savings from reduced travel
                                 that were gained during the pandemic, (3) an increased interest in
                                 reducing carbon emissions, and (4) a greater emphasis on prioritizing
                                 travel dollars where they provide the greatest benefit, such as when it
                                 helps to promote customer relationships or revenue generation. Notably,
                                 Moody’s reported that while travel to meet with customers may return

                                 84McKinsey & Company, For corporate travel, a long recovery ahead (August 2020).

                                 85Oliver Wyman, Airline Economic Analysis 2020-21.




                                 Page 43                                              GAO-22-104429 COVID-19 Pandemic
                               relatively quickly, trips related to conventions or trade shows could be
                               slower to recover. Forecasts from several industry observers vary, but
                               generally converge on expecting a multi-year period for a return to pre-
                               pandemic levels of business travel. For example, Moody’s forecasted in
                               March 2021 that business travel will not reach 2019 levels until at least
                               2024, 86 and McKinsey estimated in April 2021 that business travel will
                               likely recover to 80 percent of pre-pandemic levels by 2024. 87 The U.S.
                               Travel Association and research firm Tourism Economics forecast in July
                               2021 that business travel will return to 76 percent of 2019 levels in 2022,
                               92 percent in 2023, and finally exceed 2019 levels in 2024.

The Aviation Industry’s        The recovery of the aviation industry to profitability and financial health
Recovery to Financial Health   depends on how various aviation sectors—predominantly airlines, but
Depends on How It Adapts to    also airports, manufacturers, and repair station operators—are able to
the Evolving Market in the     adapt to evolving market conditions in the coming years. How sectors
Coming Years                   adapt, in turn, may result in changes to business models and operations.

                               Passenger Airlines

                               Industry analysts suggest that based on the expected lag in recovery for
                               international and business air travel, airlines that serve primarily domestic
                               routes and rely on leisure travel, such as low-cost airlines, are better
                               positioned for near-term recovery than airlines that have focused on
                               business and international travel. For example, Delta Air Lines, United
                               Airlines, and American Airlines generate at least a third of their revenue
                               from business travelers, according to Moody’s. 88 As a result, these
                               airlines may face challenges in regaining their previous level of
                               profitability if demand for business travel does not quickly return to pre-
                               pandemic levels. Airlines may act to offset the possible effects of a slow
                               recovery in business travel by more conservatively managing capacity
                               dedicated to such routes, increasing their focus on leisure travel, and
                               raising leisure fares, according to Moody’s. In particular, they may choose
                               to reconfigure aircraft cabins to focus on serving more leisure travelers,
                               with less business-class seating and more economy or premium seating.
                               According to Oliver Wyman’s Airline Economic Analysis 2020–2021, a

                               86Moody’s Investors Service, Business Travel Faces Higher Substitution Risk Post-
                               COVID, But Airlines Will Adapt (Mar. 24, 2021).
                               87McKinsey & Company, Back to the future? Airline sector poised for change post-COVID-
                               19 (April 2021).
                               88Moody’s Investors Service, Business Travel Faces Higher Substitution Risk Post-
                               COVID, But Airlines Will Adapt (Mar. 24, 2021).




                               Page 44                                              GAO-22-104429 COVID-19 Pandemic
near-term focus on leisure travel will alter aspects of airlines’ demand
forecasting and capacity planning, as patterns of leisure demand are
different than business demand.

Airports

U.S. airport operators are also likely to face several challenges resulting
from reduced air travel demand caused by the pandemic. In a dynamic
similar to that facing U.S. airlines, airports oriented toward domestic
leisure travel are expected to rebound more quickly than international
gateway airports or those with a high reliance on business travelers,
according to a March 2021 Fitch Ratings report. In January 2021, S&P
Global Ratings reported that airports that have traditionally relied on
strong business and international travel may have more difficulty or take
longer to compensate for a loss of non-aeronautical revenues from
parking, concessions, and rental car operations if the travelers that
patronize these businesses are slow to return. 89

Airports may also face challenges in capital planning moving forward, as
airports reported deferring or delaying such projects during the pandemic.
According to Airports Council International–North America, airports face a
backlog of $115 billion in planned capital investments. Among other
capital planning considerations, some smaller airports may face
challenges in accommodating increasing passenger volumes with social
distancing protocols still in place. For example, one industry analyst told
us that airports that are near outdoor leisure destinations like national
parks are experiencing increased demand, but have comparatively small
physical footprints.

Manufacturers and Repair Station Operators

Evolving market conditions are affecting the airline industry’s demand for
new aircraft as well as for maintenance services, with associated effects
for manufacturers, repair stations, and other businesses in the aviation
supply chain.

•   Manufacturing. According to S&P Global Ratings, Airbus and Boeing
    reduced production of most aircraft models by 30–50 percent in 2020
    in response to airline decisions to defer or cancel new aircraft orders.

89S&P Global Ratings, Outlook for U.S. Not-for-Profit Transportation Infrastructure: Light
at Tunnel’s End–But How Long is the Tunnel? (Jan. 13, 2021).




Page 45                                                 GAO-22-104429 COVID-19 Pandemic
                                 S&P forecasts that aircraft production rates are likely to remain at this
                                 level in 2021 and may not reach 2018 levels until 2024. 90 Based on
                                 recovering demand for domestic leisure travel, airline demand for
                                 narrowbody aircraft will likely recover before demand for the
                                 widebodies used for long-haul, international travel. 91 Boeing, for
                                 example, reported slowing production of the widebody 787 aircraft
                                 from 14 per month before the pandemic to five per month as of March
                                 31, 2021 based on reduced customer demand. However, according to
                                 Boeing’s data on airplane gross orders, orders for aircraft have
                                 increased recently. In January and February 2021, Boeing received
                                 orders for 86 aircraft; from March through July, the manufacturer
                                 received orders for 544 aircraft, the bulk of which are for the
                                 narrowbody 737 MAX.
                             •   Maintenance, Repair, and Overhaul. A December 2020 report from
                                 S&P Global Ratings forecasted that repair stations may recover in line
                                 with increased demand for air travel as airlines bring aircraft back into
                                 service. Similarly, officials from the Aeronautical Repair Station
                                 Association (ARSA) told us in May 2021 that they are seeing a return
                                 in demand for aircraft maintenance service as network airlines return
                                 aircraft to service. According to ARSA, as demand has increased, pre-
                                 pandemic concerns about an industry shortage in aviation
                                 maintenance technicians have resumed.

Aviation Industry            During our review, aviation industry stakeholders identified several areas
Stakeholders Identified      of concern for policymakers to consider as they determine how or
                             whether to continue to assist the aviation industry as COVID-19 relief
Considerations for
                             funds are expended and market conditions evolve. Additionally,
Potential Federal Support    stakeholders noted considerations for policymakers in preparing a federal
                             aviation response to future pandemics.

Strengthening the Aviation   As a result of workforce reductions undertaken in response to the
Workforce Pipeline           pandemic, a key concern moving forward will be maintaining healthy
                             workforce pipelines for key aviation professions including airline pilots and
                             aviation maintenance technicians, according to representatives from
                             airlines and repair stations we spoke with. These pipelines include
                             collegiate training programs and apprenticeships. We have previously
                             reported on industry concerns that an insufficient supply of airline pilots

                             90S&P Global Ratings, Industry Top Trends 2021–Aerospace and Defense (Dec. 10,
                             2020).
                             91Narrowbody aircraft have one aisle, whereas widebody aircraft have two aisles.




                             Page 46                                               GAO-22-104429 COVID-19 Pandemic
                              and maintenance technicians could develop as a result of retirements,
                              education and training costs, and difficulty hiring individuals with desired
                              experience levels. 92 An Oliver Wyman study forecasts that a pilot
                              shortage—a concern before the pandemic—will reemerge quickly and
                              may exceed 12,000 pilots by 2023. 93 Although reduced demand from the
                              pandemic temporarily alleviated these pressures, they appear to have
                              reemerged as firms face difficulty in replacing skilled aviation workers
                              who were encouraged to retire, were laid off, or migrated to other
                              industries during the industry downturn in 2020. In March 2021, the
                              American Rescue Plan Act of 2021 was enacted, establishing the
                              Aviation Manufacturing Jobs Protection (AMJP) Program. Through this
                              program, DOT is to provide up to $3 billion in funding to eligible aviation
                              manufacturing companies to pay up to half of their compensation costs
                              for certain categories of employees, for up to six months. 94 As we testified
                              in March 2021, aviation workforce retraining and efforts to strengthen the
                              pipeline of new applicants for aviation careers, such as through
                              apprenticeships and pathway programs, could help ensure the workforce
                              is ready to respond to future air travel demand. 95

Providing Small Communities   While communities of all sizes seek access to air service as a driver for
Access to the National        attracting investment, generating employment, and providing mobility for
Transportation System         citizens, as we have reported, small communities were collectively losing
                              air service prior to COVID-19, and the pandemic may exacerbate this
                              trend. 96 DOT has required airlines receiving payroll payments and loans
                              to maintain some service levels to small communities, as authorized by
                              COVID-19 relief laws. In addition, the Consolidated Appropriations Act,
                              2021 set aside up to $5 million of the $2 billion appropriated for Grants-in-

                              92GAO, Aviation Workforce: Current and Future Availability of Airline Pilots, GAO-14-232
                              (Washington, D.C.: Feb. 28, 2014), and Aviation Workforce: Current and Future
                              Availability of Aviation Maintenance and Engineering Professionals, GAO-14-237
                              (Washington, D.C.: Feb. 28, 2014).
                              93Oliver Wyman, “After COVID-19, Aviation Faces a Pilot Shortage.” March 2021.

                              94§ 7202, 135 Stat. 4, 103-04.

                              95GAO, COVID-19 Pandemic: Preliminary Observations on Efforts toward and Factors
                              Affecting the Aviation Industry’s Recovery, GAO-21-412T (Washington, D.C.: Mar. 2,
                              2021).
                              96GAO, Small Community Air Service Development: Process for Awarding Grants Could
                              Be Improved, GAO-19-172 (Washington, D.C.: March 26, 2019), and Commercial
                              Aviation: Status of Air Service to Small Communities and the Federal Programs Involved,
                              GAO-14-454T (Washington, D.C.: April 30, 2014).




                              Page 47                                               GAO-22-104429 COVID-19 Pandemic
                               Aid for Airports for the Small Community Air Service Development
                               Program (SCASDP). 97 In addition, the Act directed that in allocating this
                               funding and SCASDP funding for fiscal years 2019, 2020, and 2021, DOT
                               give priority to communities that have had airline service reduced or
                               suspended as a result of the pandemic.

                               As DOT ends these air service obligations in March 2022, some small
                               communities may face a reduction in or a complete loss of air service as
                               airlines focus on more profitable markets during recovery. Aviation
                               stakeholders such as the Regional Airline Association have suggested
                               that Congress address service reductions stemming from the pandemic
                               by providing funding for Essential Air Service (EAS) and SCASDP to
                               maintain service to small communities. 98 We and others have found that a
                               broader set of issues is driving the longer-term decline of air service to
                               small communities, and solutions provided through other options such as
                               bus service or unscheduled air taxi service, or in the longer term,
                               Advanced Air Mobility technologies, may be worth consideration. 99

Considering Future Financial   The airline industry received substantial financial support from several
Assistance                     COVID-19 relief assistance programs that aided businesses and
                               protected jobs, but some analysts noted potential downsides to that
                               support. While this assistance helped businesses respond to the
                               unprecedented demand shock by keeping many workers on the payroll
                               and enabled airlines and other businesses to be better prepared to meet
                               demand when it returned, some analysts believe that it also may have
                               deterred market adjustments that likely would have occurred in the



                               97SCASDP is a grant program designed to help small communities address air service
                               and airfare issues. For more information, see GAO-19-172.
                               98The Airline Deregulation Act of 1978, which established the EAS program, specifies that
                               if DOT determines that if air service will not be provided without subsidy, DOT shall use
                               EAS program funds to award a subsidy to an airline willing to provide service. For more
                               information, see GAO, Commercial Aviation: Effects of Changes to the Essential Air
                               Service Program, and Stakeholders’ Views on Benefits, Challenges, and Potential
                               Reforms, GAO-20-74 (Washington, D.C.: Dec. 10, 2019).
                               99Department of Transportation, Report of the Working Group on Improving Air Service to
                               Small Communities (Washington, D.C.: May 9, 2017), and GAO, National Transportation
                               System: Options and Analytical Tools to Strengthen DOT’s Approach to Supporting
                               Communities’ Access to the System (Washington, D.C.: July 17, 2009). See also The
                               National Academies of Sciences, Engineering, and Medicine, Advancing Aerial Mobility: A
                               National Blueprint, (Washington, D.C.: 2020).




                               Page 48                                               GAO-22-104429 COVID-19 Pandemic
                         absence of substantial assistance. 100 For example, economic contraction
                         and expansion—leading in some cases to mergers, restructuring, and
                         liquidation—have been a feature of the airline industry since its
                         deregulation in 1978. Despite the dramatic downturn in traffic and
                         revenues, only two small airlines filed for bankruptcy in 2020. 101 Although
                         it may be too soon to examine these issues empirically, some analysts
                         believe that pandemic relief could have delayed industry adjustments that
                         might have proven to be beneficial in the long run. For example, business
                         failure and new entry can spur relatively rapid and substantive
                         readjustments in business models at minimal cost to taxpayers.
                         According to some analysts, financial support also rewarded
                         management, creditors, and shareholders that were shielded from the
                         financial consequences of risks they had assumed. 102 Additionally,
                         analysts note that the industry might suffer if, based on the recent
                         pandemic relief, airlines expect federal financial assistance when shocks
                         to air travel demand occur in the future. 103 That expectation might limit the
                         steps firms would otherwise take to prepare for future disruptions, and as
                         such, could hamper the industry’s development of longer-run resilience to
                         respond to such events.

Preparing for the Next   Several aviation stakeholders we spoke with in 2020 and early 2021,
Pandemic                 including representatives from airports and airlines, told us that
                         passenger confidence in the air travel experience could have been
                         restored more quickly if the federal government had provided greater
                         coordination and guidance earlier in the pandemic regarding, among
                         other things, COVID-19 testing, masking requirements, and baseline
                         actions—such as sanitizing and updating signage—that airports and
                         airlines could take. 104 For example, representatives from one airport told

                         100Veronique de Rugy and Gary Leff, The Case Against Bailing Out the Airline Industry,
                         George Mason University Mercatus Center, March 2020.
                         101Ravn Air and Air Miami International filed for Chapter 11 bankruptcy in 2020.

                         102Veronique de Rugy and Gary Leff, The Case Against Bailing Out the Airline Industry,
                         George Mason University Mercatus Center, March 2020. See also Veronique de Rugy
                         and Gary Leff, The Economic Case Against a Second Airline Payroll Bailout, George
                         Mason University Mercatus Center, October 2020, and Hubert Horan, “The Airline Industry
                         after COVID-19: Value Extraction or Recovery?” American Affairs, Spring 2021.
                         103Veronique de Rugy and Gary Leff, The Case Against Bailing Out the Airline Industry,
                         George Mason University Mercatus Center, March 2020.
                         104These interviews were conducted before President Biden’s January 2021 executive
                         order requiring mask-wearing on certain domestic modes of transportation.




                         Page 49                                                GAO-22-104429 COVID-19 Pandemic
                  us that inconsistent passenger procedures between origin and destination
                  airports were a major challenge, and that the federal government has a
                  pivotal role to play in restoring passenger confidence in flying. Such
                  federal coordination and guidance is consistent with our June 2020 matter
                  urging Congress to take legislative action to require DOT to work with
                  relevant agencies and stakeholders, such as the Department of Health
                  and Human Services (HHS) and the Department of Homeland Security
                  (DHS), to develop a national aviation preparedness plan for
                  communicable disease outbreaks. 105 This plan would provide a
                  mechanism for public health and aviation sectors to coordinate to limit the
                  spread of communicable disease threats and minimize trade and travel
                  impacts. Without such a plan, the U.S. may not be as prepared to
                  minimize and quickly respond to future communicable disease threats.
                  Members of the House and Senate have introduced bills in support of this
                  matter. In February 2021, H.R. 884, the National Aviation Preparedness
                  Plan Act of 2021,106 was introduced in the House of Representatives, and
                  in May 2021, the Ensuring Health Safety in the Skies Act of 2021,107 was
                  reported favorably out of the Senate Committee on Commerce, Science,
                  and Transportation.

                  We provided a copy of this report to DOT for review and comment. DOT
Agency Comments   provided technical comments, which we incorporated as appropriate.

                  We are sending copies of this report to the appropriate congressional
                  committees, the Secretary of Transportation, and other interested parties.
                  In addition, the report is available at no charge on the GAO website at
                  http://www.gao.gov.



                  105In 2015, we recommended that the Secretary of Transportation work with relevant
                  stakeholders, such as the Department of Health and Human Services (HHS), to develop a
                  national aviation-preparedness plan for communicable diseases. DOT agreed that an
                  aviation-preparedness plan is needed. DOT, however, maintains that those agencies that
                  have both legal authority and expertise for emergency response and public health—
                  namely the Department of Homeland Security (DHS) and HHS—are best positioned to
                  take the lead role in developing such a plan. We continue to believe that DOT would be in
                  the best position to lead the effort because FAA and DOT have stronger and deeper ties
                  to, as well as oversight responsibility for, the relevant stakeholders that would be most
                  involved in such a broad effort, namely airlines, airports, and other aviation stakeholders.
                  In June 2020, we urged Congress to take legislative action to require DOT to develop a
                  national aviation-preparedness plan. See GAO-20-625.
                  106H.R. 884, 117th Cong. (2021).

                  107S. 82, 117th Cong. (2021).




                  Page 50                                                 GAO-22-104429 COVID-19 Pandemic
If you or your staff have any questions about this report, please contact
Heather Krause at (202) 512-2834 or krauseh@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. GAO staff who made key
contributions to this report are listed in appendix III.




Heather Krause
Director, Physical Infrastructure Issues




Page 51                                      GAO-22-104429 COVID-19 Pandemic
List of Addressees

The Honorable Patrick Leahy
Chair
The Honorable Richard Shelby
Vice Chairman
Committee on Appropriations
United States Senate

The Honorable Ron Wyden
Chair
The Honorable Mike Crapo
Ranking Member
Committee on Finance
United States Senate

The Honorable Patty Murray
Chair
The Honorable Richard Burr
Ranking Member
Committee on Health, Education, Labor, and Pensions
United States Senate

The Honorable Gary C. Peters
Chairman
The Honorable Rob Portman
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate

The Honorable Kyrsten Sinema
Chair
The Honorable James Lankford
Ranking Member
Subcommittee on Government Operations and Border Management
Committee on Homeland Security and Governmental Affairs
United States Senate

The Honorable Rosa L. DeLauro
Chair
The Honorable Kay Granger
Ranking Member
Committee on Appropriations


Page 52                                   GAO-22-104429 COVID-19 Pandemic
House of Representatives

The Honorable Frank Pallone, Jr.
Chair
The Honorable Cathy McMorris Rodgers
Republican Leader
Committee on Energy and Commerce
House of Representatives

The Honorable Bennie G. Thompson
Chair
The Honorable John Katko
Ranking Member
Committee on Homeland Security
House of Representatives

The Honorable Carolyn B. Maloney
Chairwoman
The Honorable James Comer
Ranking Member
Committee on Oversight and Reform
House of Representatives

The Honorable Peter A. DeFazio
Chair
The Honorable Sam Graves
Ranking Member
Committee on Transportation and Infrastructure
House of Representatives

The Honorable Richard Neal
Chair
The Honorable Kevin Brady
Republican Leader
Committee on Ways and Means
House of Representatives




Page 53                                    GAO-22-104429 COVID-19 Pandemic
The Honorable Garret Graves
Ranking Member
Subcommittee on Aviation
Committee on Transportation and Infrastructure
House of Representatives




Page 54                                    GAO-22-104429 COVID-19 Pandemic
Appendix I: Objectives, Scope, and
              Appendix I: Objectives, Scope, and
              Methodology



Methodology

              This report addresses (1) the effects of the COVID-19 pandemic on
              selected aviation and aerospace industry sectors; (2) the actions, if any,
              that selected stakeholders took in response; (3) actions the Federal
              Aviation Administration took to help the aviation industry respond to the
              pandemic, and selected aviation stakeholders’ perspectives on those
              actions; and (4) the outlook for aviation industry recovery, and
              stakeholder considerations for potential federal support in assisting the
              aviation industry in the future.

              To identify the effects of the pandemic on selected aviation industry
              sectors, we analyzed Department of Transportation (DOT) Form 41
              financial and operational data for calendar years 2019 and 2020—the
              most recent and complete data available. All dollar figures in this report
              are nominal unless otherwise noted. To assess the reliability of these
              data, we reviewed the quality control procedures used by DOT and
              subsequently determined that the data were sufficiently reliable for our
              purposes. We also analyzed financial statements reported to the
              Securities and Exchange Commission by publicly-traded airlines and
              other aviation businesses from the first quarter through the fourth quarter
              of 2020 to obtain quantitative information on their financial performance
              as well as qualitative descriptions of the impact of the pandemic on
              businesses and actions those businesses took in response. 1 We reported
              on the immediate effects of the pandemic based on the expectation that
              other effects will be long-term.

              We conducted interviews about the effects of the COVID-19 pandemic on
              selected aviation and aerospace industry sectors and actions
              stakeholders took in response with a judgmental sample of 47 aviation
              and aerospace industry stakeholders, including six passenger airlines
              (two network, two low-cost, and two regional airlines); three cargo
              airlines; 11 large and medium hub airports; five airframe, engine, or
              aerostructures manufacturers; three repair stations that provide aircraft
              maintenance, repair, and overhaul services; two commercial space
              launch providers; two aviation labor organizations; one engineering and
              analytics firm; three credit rating agencies; two aviation industry analysts;
              and nine industry associations. We selected stakeholders to represent a
              cross-section of sectors within the aviation and aerospace industries as
              well as based on geographic representation. Because we used a
              judgmental sample of industry stakeholders, findings from these
              interviews cannot be generalized to a broader population. However, we

              1The four quarters cover the 12 months of calendar year 2020.




              Page 55                                              GAO-22-104429 COVID-19 Pandemic
Appendix I: Objectives, Scope, and
Methodology




determined that the selection of these stakeholders was appropriate for
our design and objectives and that these interviews would generate valid
and reliable evidence to support our work. See table 2 for the list of
stakeholders we interviewed.

Table 2: Selected Aviation and Aerospace Industry Stakeholders GAO Interviewed

U.S. federal agencies
Department of Transportation
Federal Aviation Administration
Analytics and engineering firms
BryceTech, LLC
Industry associations
Aeronautical Repair Station Association
Aerospace Industries Association
Aircraft Owners and Pilots Association
Airports Council International–North America
American Association of Airport Executives
Commercial Spaceflight Federation
General Aviation Manufacturers Association
National Business Aviation Association
Satellite Industry Association
Aviation labor organizations
Airline Pilots Association
International Association of Machinists and Aerospace Workers
Passenger airlines
American Airlines
Delta Air Lines
Frontier Airlines
Spirit Airlines
SkyWest Airlines
Mesa Airlines
Cargo airlines
United Parcel Service
Western Global Airlines
USA Jet Airlines
Aviation manufacturers
Boeing
GE Aviation




Page 56                                             GAO-22-104429 COVID-19 Pandemic
                             Appendix I: Objectives, Scope, and
                             Methodology




                             Gulfstream Aerospace
                             Spirit AeroSystems
                             Textron Aviation
                             Repair station operators
                             Aviation Technical Services
                             HAECO Americas
                             Velocity Aerospace
                             Large and medium hub airports
                             Baltimore/Washington Thurgood Marshall International Airport
                             Bradley International Airport
                             Chicago O’Hare International Airport
                             Cleveland-Hopkins International Airport
                             Dallas-Fort Worth International Airport
                             Denver International Airport
                             Hartsfield-Jackson Atlanta International Airport
                             Nashville International Airport
                             Norman Y. Mineta San Jose International Airport
                             Pittsburgh International Airport
                             St. Louis Lambert International Airport
                             Commercial space launch providers
                             Blue Origin
                             Space-X
                             Credit rating agencies
                             Fitch Ratings
                             Moody’s Investors Service
                             S&P Global Ratings
                             Aviation industry analysts
                             Helane Becker, Cowen Group
                             William Swelbar, Swelbar–Zhong Consultancy
                             Source: GAO. | GAO 22-104429




Survey of Smaller Airports   To identify the effects of the COVID-19 pandemic on smaller airports (i.e.,
                             small hub, non-hub, non-primary commercial service, general aviation,
                             and reliever airports), and actions those airports took in response, we
                             designed and administered a web-based survey of a stratified random
                             sample of smaller airports from November 16, 2020, to December 11,
                             2020.




                             Page 57                                             GAO-22-104429 COVID-19 Pandemic
Appendix I: Objectives, Scope, and
Methodology




Survey Population and Sample Design

We constructed the population of airports for our survey sample using
data on existing and proposed airports from the Federal Aviation
Administration’s 2019-2023 National Plan of Integrated Airport Systems
(NPIAS), the most recent version available when we began our audit
work. Using NPIAS data, we determined that there were (1) 380 primary
airports—including 30 large hub, 31 medium hub, 72 small hub, and 247
non-hub airports; (2) 2,941 non-primary airports—including 126 non-
primary commercial service airports, 2,554 general aviation airports, and
261 reliever airports; 2 and (3) 7 proposed airports. We excluded from this
population large hub and medium airports, non-primary airports with an
unclassified role, airports outside of the continental U.S., and proposed
airports. The outcome was a survey sample frame of 2,752 airports that
included 64 small hub airports, 209 non-hub airports, 63 non-primary
commercial service airports, and 2,416 general aviation and reliever
airports.

We selected a stratified random sample of 1,136 airports that included 64
small hub airports, 209 non-hub airports, 63 non-primary commercial
airports, and 800 general aviation and reliever airports. Small hub, non-
hub, and non-primary commercial service airports were selected with
certainty. To determine the appropriate sample size for the general
aviation and reliever airports, we determined the minimum sample size
needed to achieve precision levels of percentage estimates within plus or
minus 5 percentage points. We then increased this sample size for an
expected response rate of 64 percent in order to achieve the necessary
number of completed surveys for our desired precision level (see table 3).
We obtained completed questionnaires from 817 respondents, or about a
72 percent unweighted response rate. The weighted response rate was
65 percent. The survey results can be generalized to the target population
of 2,752 smaller airports.




2Non-primary airports are categorized as either national, regional, local, basic, or
unclassified.




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Appendix I: Objectives, Scope, and
Methodology




Table 3: Description of the Sample Frame, Stratification, and Sample Sizes for the
Stratified Random Sample of Smaller Airports

                                                                                                  Number of
                                                                                                  completed
 Stratum                                  Population size                        Sample size        surveys
 Small hub                                                    64                            64            59
 Non-hub                                                    209                            209           183
 Non-primary                                                  63                            63            61
 commercial service
 General aviation                                         2,416                            800           514
 and reliever
 Total                                                    2,752                           1,136          817
Source: GAO, based on analysis of Federal Aviation Administration data. | GAO-22-104429

Note: Small hub, non-hub, and non-primary commercial service airports were selected with certainty.


Administration of Survey and Quality Assurance

We developed a questionnaire to obtain information about the effects of
the COVID-19 pandemic on smaller airports, and the actions these
airports took in response. On November 9, 2020, we sent an initial email
alerting airport contacts to the upcoming web-based survey, and a week
later, the web-based survey was also delivered to recipients via email
message. Our email message described the purpose and topic of the
survey, and encouraged the respondent to consult with other individuals
in the provider’s organization if that would increase the accuracy of their
responses. The web-based survey requested information on, among
other things, the effects of the pandemic on scheduled commercial
passenger air service and airport revenue streams; changes in airport
operating expenses and capital improvement projects; the outlook for
businesses operating on airport property including repair stations, fixed
base operators, pilot schools, aviation maintenance technician schools,
and concessions; and airport use of CARES Act grant funding. To help
increase our response rate, we sent reminder emails on December 3 and
December 8, 2020 and called airport contacts. The survey was available
from November 16 through December 11, 2020. Our survey included both
closed-ended and open-ended questions. We performed a content
analysis on select open-ended questions, whereby one analyst coded all
comments using a list of developed categories, and a second analyst
independently coded the first 100 responses for each selected question,
then reviewed the remaining assigned codes for selected questions as a
quality assurance step.




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Appendix I: Objectives, Scope, and
Methodology




To pretest the questionnaire, we conducted interviews with officials from
eight airports with knowledge about their airport’s operations. Each
pretest was conducted on the phone. We selected pretest respondents to
represent a range of airport categories in different parts of the country.
We conducted these pretests to determine if the questions were
burdensome, understandable, and measured what we intended, and to
ensure we could identify an appropriate individual who was
knowledgeable about their airport operations to respond to the survey. On
the basis of feedback from the pretests, we modified the questions as
appropriate.

Sampling Error and Estimation

To produce the estimates from this survey, answers from each
responding case were weighted in the analysis to generalize to the
members of the population, including those who were not selected or did
not respond to the survey. Estimates produced from this sample are
generalizable to the target population of 2,752 smaller airports.

Because our results are based on a sample and different samples could
provide different estimates, we express our confidence in the precision of
our particular sample’s results as a 95 percent confidence interval. We
are 95 percent confident that each of the confidence intervals in this
report include the true values in the study population. Unless we note
otherwise, percentage estimates based on all airports have 95 percent
confidence intervals of within plus or minus 10 percentage points.

Non-Sampling Error

In addition to the reported sampling errors, the practical difficulties of
conducting any survey may introduce other types of errors, commonly
referred to as non-sampling errors. For example, differences in how a
particular question is interpreted, the sources of information available to
respondents, or the types of people who do not respond can introduce
unwanted variability into the survey results. We included steps in both the
data collection and data analysis stages for the purpose of minimizing
such non-sampling errors.

We took the following steps to increase the response rate: pre-testing the
questionnaires with airports, and conducting multiple follow-ups to identify
the appropriate contact at some airports and to encourage responses to
the survey.




Page 60                                       GAO-22-104429 COVID-19 Pandemic
Appendix I: Objectives, Scope, and
Methodology




Survey Analysis

We analyzed the response status to our survey to identify potential
sources of nonresponse bias, in accordance with best practices in survey
research and echoed in Office of Management and Budget, Standards
and Guidelines for Statistical Surveys (September 2006). We examined
the response propensity of the sampled airports using both bivariate and
multivariate logistic regression models. The factors we examined included
airport characteristics available for respondents and non-respondents on
the NPIAS sample frame: airport ownership, role, the number of revenue
passengers that boarded aircraft (enplanements), the 5-year estimate of
airport improvements eligible for federal development grants under the
Airport Improvement Program, the number of aircraft hangered or based
at the airport, and the stratification variable that combined hub and airport
category. We detected significant associations between the probability of
response and the stratification variable, role, enplanements, and number
of based aircraft.

We adjusted for the characteristics significantly associated with response
propensity using weighting class adjustments. Specifically, we grouped
the predicted response propensity derived from our logistic regression
model using quintiles of the predicted response propensity distribution to
form five weighting adjustment groups. We applied nonresponse
adjustments to the sampling weights within these groups to form
nonresponse-adjusted analysis weights used in our survey analyses.

The nonresponse bias analysis and subsequent weighted adjustments
only included variables available on the NPIAS sample frame and did not
account for unobserved variables that could potentially be related to the
likelihood of response. However, based on our knowledge of aviation
operations, we did not expect survey responses or the likelihood of
response to vary by other airport characteristics. Based on this
nonresponse bias analysis and resulting nonresponse-adjusted analysis
weights, we determined that estimates using these weights are
generalizable to the population of smaller airports and are sufficiently
reliable for the purposes of our reporting objectives.

We compared—as appropriate—weighted survey estimates generated by
the airport strata described above. For each subgroup, we produced
percentage estimates and standard errors for each level and used these
results to confirm the significance of the differences between weighted
survey estimates.




Page 61                                        GAO-22-104429 COVID-19 Pandemic
Appendix I: Objectives, Scope, and
Methodology




To identify the actions the Federal Aviation Administration (FAA) took to
help the aviation industry respond to the pandemic, we reviewed requests
for regulatory relief submitted to FAA by aviation stakeholders and FAA’s
regulatory rulemakings, exemptions, and extensions, as well as
operational guidance. We interviewed officials from FAA divisions
responsible for implementing these actions as well as those of the 47
aviation and aerospace stakeholders selected whose operations were
potentially affected by these actions.

To describe the outlook for aviation industry recovery and stakeholder
considerations for potential federal support in assisting the aviation
industry in the future, we reviewed forecasts published by aviation
industry stakeholders, including consulting firms, credit rating agencies,
and an aviation manufacturer, and synthesized their findings. We also
interviewed the 47 aviation and aerospace industry stakeholders to obtain
their perspectives on considerations for federal assistance, and reviewed
our prior work on civil aviation and federal assistance to the private
sector.

We conducted this performance audit from July 2020 through October
2021 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.




Page 62                                      GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports
               Appendix II: Survey of Smaller Airports




               This appendix contains selected questions from our survey of smaller
               airports and their responses. Our web-based survey of a stratified random
               sample of small hub, non-hub, non-primary commercial service, and
               general aviation and reliever airports was administered from November
               16, 2020 to December 11, 2020. Our survey was comprised of two types
               of questions: those for which several possible answers were provided to
               choose from (closed-ended) and those that allowed respondents to
               provide their own answers (open-ended). We did not verify the
               statements of those who completed the survey. In this appendix, we
               include selected survey questions and aggregate results of responses to
               both closed-ended and open-ended questions. Using professional
               judgment, we excluded some survey questions from our analysis due to
               the timing of our survey field period and report issuance. The survey
               results for the closed-ended questions were weighted in our analysis to
               be generalizable to the members of our target population of 2,752 smaller
               airports, including those who were not selected or that did not respond to
               our survey. General aviation and reliever airports made up the majority
               (about 88 percent) of smaller airports (see table 4). For all questions that
               ask for a comparison between 2019 and 2020, the respondent was
               presented with a range of options, including: (1) decrease by 76-100%,
               51-75%, 26-50%, 10-25%, or less than 10%; (2) about the same (roughly
               0%); and (3) increase by more than 100%, 76-100%, 51-75%, 26-50%,
               10-25%, or less than 10%. In our analysis, we collapsed the response
               categories in order to produce statistically reliable estimates. For selected
               open-ended questions, we performed a non-generalizable content
               analysis of written responses. For a detailed discussion of our survey
               methodologies, see appendix I.

               Results for the generalizable, closed-ended questions are presented
               below with lower and upper bounds for 95 percent confidence intervals.
               We have noted where the margin of error between the estimate and the
               upper or lower bound is greater than 10 or 20 percentage points:

               •   Superscript “a”: The margin of error between the estimate and the
                   upper or lower bound is greater than 10 percentage points, and
                   therefore should be interpreted with caution.
               •   DNR (data not reliable): The margin of error between the estimate and
                   upper or lower bound is greater than 20 percentage points and was
                   considered unreliable; these estimates were not included in our
                   findings.




               Page 63                                        GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




Table 4. The Population Size and Distribution of Smaller Airports by Survey Strata

 Strata                                                      Population size                            Percent
 Small hub                                                                       64                            2
 Non-hub                                                                        209                            8
 Non-primary commercial                                                          63                            2
 service
 General aviation/reliever                                                   2,416                            88
 Total                                                                       2,752                           100
Source: GAO, based on analysis of Federal Aviation Administration data. | GAO-22-104429




Survey of Smaller Airports

Is scheduled commercial passenger air service provided at your
airport?

                         Estimated percentage (lower bound, upper bound)
                                                                          Non-primary
                                                                           commercial         General
 Response                   Total          Small hub              Non-hub     service aviation/reliever
 Yes                14 (13, 15)        100 (95, 100)            97 (93, 99)           93 (84, 98)         2 (1,4)
 No                 86 (85, 87)                 0 (0, 5)             3 (1, 7)             7 (2, 16)    98 (96,99)



      A. If yes, what was the estimated change in scheduled
         commercial passenger air service, as measured by
         enplanements, when comparing the following months from
         2019 and 2020?

April 2019 vs April 2020

                         Estimated percentage (lower bound, upper bound)
 Response                                                                 Non-primary
                                                                           commercial         General
                                 Total        Small hub           Non-hub     service aviation/reliever
 Decrease
 >50%                    90 (85, 93)        97 (88, 100) 94 (89,97)                 85 (73, 94)a            DNR
 1-50%                      8 (4, 12)            3 (0, 12)         5 (2, 10)              7 (2, 18)a        DNR
 Roughly 0%                   2 (0, 5)             0 (0, 5)          0 (0, 2)             4 (0, 13)         DNR
 Increase                      0 (0,2)             0 (0, 5)          1 (0, 3)               0 (0, 5)        DNR
 Don’t know                   1 (0, 2)             0 (0, 5)          0 (0, 2)             4 (0, 13)         DNR




Page 64                                                                       GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




September 2019 versus September 2020

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total    Small hub      Non-hub            service aviation/reliever
Decrease
>50%             64 (60, 69)    77 (65, 87) 69 (66,71)          53 (50, 55)            DNR
1-50%            31 (27, 35)    23 (13, 35) 28 (26, 31)         38 (25, 52)a           DNR
Roughly 0%           2 (1, 6)       0 (0, 5)     1 (0, 4)          2 (0, 10)           DNR
Increase             1 (0, 4)       0 (0, 5)     2 (0, 5)          4 (0, 13)           DNR
Don’t know           1 (0, 2)       0 (0, 5)     0 (0, 2)          4 (0, 13)           DNR



Is unscheduled/charter air service provided at your airport?

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total    Small hub       Non-hub           service aviation/reliever
Yes              35 (32, 39)    78 (65, 88)    75 (72, 77)      62 (60, 64)      30 (27, 34)
No               65 (61, 68)    22 (12, 35)    25 (23, 28)      38 (36, 40)      70 (66, 73)



     A. If yes, what was the estimated change in unscheduled/charter
        air service, as measured by enplanements, when comparing
        the following months from 2019 and 2020?

April 2019 vs April 2020

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total    Small hub       Non-hub           service aviation/reliever
Decrease         67 (62, 72)    72 (57, 84)a   79 (71, 85)      58 (41, 74)a     64 (58, 71)
Roughly 0%       15 (11, 20)     11 (4, 24)a    10 (5, 16)       16 (6, 31)a     17 (11, 23)
Increase           7 (5, 11)      4 (1, 15)a      2 (1, 6)        5 (1, 18)a       9 (5, 14)
Don’t know        11 (8, 15)     13 (5, 26)a     9 (5, 15)      21 (10, 37)a      11 (6, 16)




Page 65                                                      GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




September 2019 vs. September 2020

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response               Total   Small hub        Non-hub            service aviation/reliever
Decrease         58 (53, 63)   70 (54, 82)a    72 (69, 74)       50 (47, 53)       55 (47, 62)
Roughly 0%       19 (14, 23)   11 (4, 24)a      10 (6, 17)        18 (8, 34)a      21 (15, 28)
Increase          12 (9, 16)     7 (1, 18)a      9 (5, 15)        11 (3, 25)a       14 (9, 20)
Don’t know        11 (8, 15)   13 (5, 26)a       9 (5, 15)       21 (10, 37)a       11 (6, 17)



Is non-mail cargo air service provided at your airport?

                  Estimated percentage (lower bound, upper bound)
                                                         Non-primary
                                                          commercial         General
Response               Total    Small hub        Non-hub     service aviation/reliever
Yes              13 (11, 15)   81 (69, 90)a     49 (47, 52)       40 (38, 42)        7 (5, 10)
No               87 (85, 89)   19 (10, 31)a     51 (48, 53)       60 (58, 62)      93 (90, 95)



     A. If yes, what was the estimated change in non-mail cargo air
        service, as measured by weight (either pounds or tonnage),
        when comparing the following months from 2019 and 2020?

April 2019 vs April 2020

Estimated percentage (lower bound, upper bound)
                                                                Non-primary
                                                                 commercial         General
Response               Total    Small hub       Non-hub             service aviation/reliever
Decrease         36 (30, 43)    54 (50, 58) 42 (39, 46)                 DNR       29 (16, 46)a
Roughly 0%       35 (28, 42)     15 (6, 28)a   27 (18, 37)a             DNR       42 (26, 59)a
Increase         15 (10, 21)   31 (19, 46)a     15 (8, 24)        13 (3, 32)a      11 (3, 25)a
Don’t know        14 (9, 20)        0 (0, 6)    16 (9, 25)          8 (1, 27)a     18 (7, 33)a




Page 66                                                       GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




September 2019 vs September 2020

                  Estimated percentage (lower bound, upper bound)
                                                                Non-
                                                             primary
                                                          commercial         General
Response               Total      Small hub       Non-hub    service aviation/reliever
Decrease         26 (19, 32)     30 (17, 45)a    22 (14, 32)a           DNR       28 (14, 45)a
Roughly 0%       33 (26, 40)      15 (6, 28)a     29 (26, 33)           DNR       37 (22, 54)a
Increase         27 (22, 33)     55 (51, 59)      33 (29, 36)           DNR        17 (7, 32)a
Don’t know        14 (9, 21)         0 (0, 6)      16 (9, 25)       8 (1, 27)a     18 (8, 34)a



Are there general aviation operations at your airport?
(General aviation operations may include business jet operations,
turboprops, piston airplanes, or helicopters. Please do not include military
operations in your response.)

                  Estimated percentage (lower bound, upper bound)
                                                                Non-primary
                                                                 commercial         General
Response             Total       Small hub      Non-hub             service aviation/reliever
Yes             95 (93, 96)     98 (91, 100)      99 (97,       100 (95, 100)      94 (92, 96)
                                                    100)
No                  5 (4, 7)        2 (0, 9)      1 (0, 3)            0 (0, 5)        6 (4, 8)



     A. If yes, what was the estimated change in general aviation
        operations when comparing the following months from 2019
        and 2020?

April 2019 vs April 2020

                  Estimated percentage (lower bound, upper bound)
                                                                Non-primary
                                                                 commercial         General
Response               Total     Small hub       Non-hub            service aviation/reliever
Decrease
>50%             29 (26, 32)     52 (48, 55)    41 (39, 44)      36 (24, 49)a      27 (24, 31)
1-50%            40 (36, 43)     38 (34, 41)    40 (38, 43)       38 (36, 40)      40 (36, 44)
Roughly 0%       18 (15, 21)        2 (0, 9)      7 (4, 11)        11 (5, 22)a     20 (16, 23)
Increase           8 (6, 10)       7 (2, 17)      6 (3, 11)         7 (2, 16)        8 (6, 11)
Don’t know           5 (4, 7)       2 (0, 9)      6 (3, 10)         8 (3, 18)         5 (3, 7)




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September 2019 vs September 2020

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response               Total    Small hub        Non-hub           service aviation/reliever
Decrease
>50%             14 (12, 17)       5 (1, 14)    17 (12, 23)      20 (11, 32)a     14 (11, 17)
1-50%            42 (39, 46)    60 (57, 64)     44 (42, 47)      41 (39, 43)      41 (38, 45)
Roughly 0%       21 (18, 24)      9 (3, 19)a      8 (4, 13)       11 (5, 22)a     23 (19, 26)
Increase         17 (15, 20)    24 (14, 37)a    25 (23, 27)      20 (11, 32)a     17 (14, 19)
Don’t know           5 (4, 7)       2 (0, 9)      6 (3, 10)         8 (3, 18)         5 (3, 8)


What was the estimated change in your airport’s aeronautical
operating revenue, when comparing the months of September 2019
versus September 2020?

Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response               Total      Small hub      Non-hub           service aviation/reliever
Decrease
>50%             14 (12, 17)     30 (19, 44)a 38 (36, 41)         15 (7, 26)a       12 (9, 15)
1-50%            44 (40, 47)      54 (51, 58) 54 (51, 57)        54 (52, 56)      42 (38, 46)
Roughly 0%       28 (25, 31)        5 (1, 14)      2 (0, 5)       18 (9, 30)a     31 (27, 34)
Increase           9 (7, 11)      10 (4, 21)a     6 (3, 10)       10 (4, 20)a       10 (7, 13)
Don’t know           5 (4, 7)        0 (0, 5)      1 (0, 3)         3 (0, 11)         6 (4, 8)


What was the estimated change in your airport’s Passenger Facility
Charges (PFCs), when comparing the months of September 2019
versus September 2020?
(If your airport does not collect PFCs, please select “not applicable.”)

Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response               Total      Small hub      Non-hub           service aviation/reliever
Decrease         64 (57, 70)      93 (83, 98) 97 (93, 99)        79 (62, 91)a     25 (14, 40)a
Roughly 0%       28 (22, 35)         2 (0, 9)      1 (0, 4)       12 (3, 27)a     60 (45, 74)a
Increase             3 (1, 6)       3 (0, 12)      0 (0, 2)        6 (1, 20)a       5 (1, 15)a
Don’t know         5 (3, 10)         2 (0, 9)      2 (0, 5)        3 (0, 15)a      10 (3, 22)a




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What was the estimated change in your airport’s non-aeronautical
operating revenue, when comparing the months of September 2019
versus September 2020?

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total    Small hub       Non-hub           service aviation/reliever
Decrease
>50%              10 (8, 12)    47 (44, 51)    32 (30, 34)       13 (6, 24)a         7 (5, 9)
1-50%            20 (17, 22)    48 (44, 51)    54 (51, 57)      31 (20, 44)a     16 (13, 19)
Roughly 0%       51 (48, 55)      3 (0, 12)      8 (4, 13)      39 (37, 42)      57 (53, 61)
Increase             4 (3, 5)      0 (0, 5)       5 (2, 9)         7 (2, 16)         4 (2, 6)
Don’t know       15 (13, 18)       2 (0, 9)       1 (0, 4)       10 (4, 20)a     17 (14, 20)



Does your airport have non-aeronautical land leases?

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total    Small hub      Non-hub            service aviation/reliever
Yes              47 (43, 50) 91 (81, 97)a 76 (74, 78)           70 (57, 81)a     42 (38, 46)
No               53 (50, 57)     9 (3, 19)a   24 (22, 26)       30 (19, 43)a     58 (54, 62)



Have any measures been taken to generate additional revenue at
your airport since the start of the COVID-19 pandemic?

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total    Small hub      Non-hub            service aviation/reliever
Yes              26 (24, 29)    61 (58, 65) 45 (42, 48)         26 (16, 39)a     24 (21, 27)
No               74 (71, 76)    39 (35, 42) 55 (52, 58)         74 (61, 84)a     76 (73, 79)




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                                                    A. If yes, please describe any measures taken to generate
                                                       additional revenue.

                                                                                                                                   Number of
Identified revenue measures                                                                                                        responses
Built or developed revenue opportunities (built structures to rent out, developed land for lease, etc.)                                     59
Filled office or land vacancies (empty, available resources were filled with rent-paying tenants)                                           62
Increased marketing (additional advertising/marketing efforts to raise awareness about opportunities to bring business                      37
to the airport)
Opportunistic and/or temporary measures (revenue-generating activities taking advantage of low activity at airport,                         26
adapting to COVID-19 precautions, etc., that are likely to be discontinued once aviation recovers)
Created incentives (efforts that would directly encourage or drive demand, through promos, discounts, etc.)                                 29
Raised rates and/or fees                                                                                                                    18
Pursued favorable agreements (airports worked to gain greater efficiency with their agreements/pursuing more                                17
favorable terms for themselves, e.g. tenants with lower rates, renegotiated contracts)
Sold assets (airports sold off land or other assets in order to raise revenue)                                                               7

                                              Note: The above results are based on a content analysis of written responses. A total of 249
                                              respondents provided a valid, written response to this question. Respondents may have mentioned
                                              more than one measure taken, therefore responses do not add up to 100 percent. There were also 60
                                              comments made regarding airport revenue measures that did not fall into the identified categories.


                                              Have any of the following measures been taken to reduce operating
                                              costs at your airport since the start of the COVID-19 pandemic?

                                                    A. Hiring freezes

                                                                 Estimated percentage (lower bound, upper bound)
                                                                                                               Non-
                                                                                                            primary
                                                                                                         commercial         General
                                               Response                Total     Small hub       Non-hub    service aviation/reliever
                                               Yes               29 (26, 32)     75 (62, 85)a 57 (54, 59)     38 (36, 41)          25 (22, 28)
                                               No                46 (43, 49)     24 (14, 37)a   41 (39, 44)   55 (53, 57)          47 (43, 51)
                                               Don’t know            0 (0, 1)        0 (0, 5)      0 (0, 2)       0 (0, 5)             0 (0, 1)
                                               Not applicable    25 (22, 28)         2 (0, 9)      2 (0, 5)      7 (2, 16)         28 (24, 31)




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     B. Staff layoffs

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total     Small hub      Non-hub           service aviation/reliever
Yes                  6 (5, 8)   19 (10, 31)a   14 (10, 20)         3 (0, 12)         5 (3, 7)
No               72 (69, 75)    80 (67, 89)a   84 (78, 89)      92 (82, 97)a     70 (67, 74)
Don’t know           0 (0, 1)       0 (0, 5)      0 (0, 2)          0 (0, 5)         0 (0, 2)
Not applicable 21 (18, 24)          2 (0, 9)      2 (0, 5)         5 (1, 14)     24 (21, 27)


     C. Reduce staff hours

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total     Small hub      Non-hub           service aviation/reliever
Yes              20 (17, 22)     39 (35, 42) 34 (32, 37)        22 (12, 34)a     18 (15, 21)
No               61 (58, 64)     56 (52, 60) 66 (63, 68)        73 (60, 84)a     60 (57, 64)
Don’t know           0 (0, 1)       0 (0, 5)      0 (0, 2)          0 (0, 5)         0 (0, 1)
Not applicable 19 (16, 22)         5 (1, 14)      0 (0, 2)         5 (1, 14)     21 (18, 25)



     D. Reduce staff travel

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response               Total     Small hub      Non-hub           service aviation/reliever
Yes              44 (41, 48)    98 (91, 100) 88 (83, 93)        75 (62, 85)a     38 (34, 42)
No               29 (26, 32)        0 (0, 5)    10 (6, 16)      20 (11, 32)a     31 (28, 35)
Don’t know           0 (0, 1)       0 (0, 5)      0 (0, 2)          2 (0, 9)         0 (0, 1)
Not applicable 27 (23, 30)          2 (0, 9)      1 (0, 4)         3 (0, 12)     30 (27, 34)




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     E. Reduce staff training

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response                Total Small hub          Non-hub           service aviation/reliever
Yes               26 (23, 29) 47 (44, 51) 54 (51, 56)            36 (24, 49)a     23 (20, 26)
No                53 (50, 57) 48 (44, 51) 46 (43, 48)            63 (60, 65)      54 (50, 58)
Don’t know            0 (0, 1)       2 (0, 9)      0 (0, 2)          0 (0, 5)         0 (0, 1)
Not applicable    20 (17, 23)      3 (0, 12)       1 (0, 3)          2 (0, 9)     23 (20, 27)



     F. Defer debt finance

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response                Total Small hub          Non-hub           service aviation/reliever
Yes                   3 (2, 5)     8(3, 19)a      8 (5, 13)         7 (2, 16)         2 (1, 4)
No                65 (61, 68)    80 (67, 89)a   75 (73, 78)      78 (65, 88)a     63 (59, 67)
Don’t know            4 (3, 5)       2 (0, 9)      2 (1, 6)         5 (1, 14)         4 (2, 6)
Not applicable    29 (25, 32)    10 (4, 21)a     14 (9, 20)       10 (4, 21)a     31 (27, 35)



     G. Defer maintenance

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response                Total Small hub          Non-hub           service aviation/reliever
Yes               23 (21, 26) 52 (48, 55) 35 (33, 38)            28 (17, 41)a     21 (18, 25)
No                62 (58, 65) 48 (45, 52) 65 (62, 67)            70 (57, 81)a     62 (58, 65)
Don’t know            1 (0, 2)       0 (0, 5)      0 (0, 2)          0 (0, 5)         1 (0, 2)
Not applicable    14 (11, 17)        0 (0, 5)      0 (0, 2)          2 (0, 9)     16 (13, 19)




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     H. Other

                  Estimated percentage (lower bound, upper bound)
                                                                 Non-
                                                              primary
                                                           commercial         General
Response                Total      Small hub       Non-hub    service aviation/reliever
Yes                  9 (6, 12)     49 (44, 53) 24 (16, 34)        8 (1, 26)a      6 (4, 10)
No                36 (32, 41)      18 (7, 33)a       28 (19,           DNR      37 (32, 43)
                                                        38)a
Don’t know            3 (2, 6)        0 (0, 7)      4 (1, 11)     8 (1, 26)a        3 (2, 6)
Not applicable    51 (47, 56)     33 (19, 50)a 43 (40, 47)             DNR      53 (48, 58)



Have you made any changes to any ongoing or planned (within the
next year) infrastructure/capital improvement projects since the
start of the COVID-19 pandemic?

                  Estimated percentage (lower bound, upper bound)
                                                                 Non-
                                                              primary
                                                           commercial         General
Response                Total      Small hub       Non-hub    service aviation/reliever
Yes               30 (27, 33)     80 (67, 89)a 42 (39, 45)       38 (36, 41)    27 (24, 31)
No                68 (65, 71)     20 (11, 33)a 57 (55, 60)       58 (56, 61)    70 (67, 74)
Not applicable        2 (1, 4)        0 (0, 5)       1 (0, 3)      3 (0, 12)        3 (1, 4)



     A. If yes, how, if at all, has the scope/timeline for the project(s)
        been impacted by COVID-19? Please check all that apply.

Project Cancelled

                  Estimated percentage (lower bound, upper bound)
                                                                 Non-
                                                              primary
                                                           commercial         General
Response              Total      Small hub         Non-hub    service aviation/reliever
Checked          14 (10, 19) 25 (14, 40)a        21 (12, 31)a     4 (0, 22)a     13 (8, 20)
Not checked      86 (81, 90) 75 (60, 86)a        79 (69, 88)a   96 (78, 100)a   87 (80, 92)




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Project Delayed

                  Estimated percentage (lower bound, upper bound)
                                                               Non-
                                                            primary
                                                         commercial         General
Response               Total    Small hub        Non-hub    service aviation/reliever
Checked          77 (72, 82)   92 (80, 98)a 77 (66, 86)a           DNR        77 (69, 84)
Not checked      23 (18, 28)      8 (2, 20)a 23 (14, 34)a          DNR        23 (16, 31)



Project Accelerated

                  Estimated percentage (lower bound, upper bound)
                                                               Non-
                                                            primary
                                                         commercial         General
Response               Total    Small hub        Non-hub    service aviation/reliever
Checked           11 (8, 16)     11 (4, 23)a 18 (10, 29)a          DNR         10 (6, 16)
Not checked      89 (84, 92)   89 (77, 96)a    82 (71, 90)a        DNR        90 (84, 94)



Other

                  Estimated percentage (lower bound, upper bound)
                                                               Non-
                                                            primary
                                                         commercial         General
Response               Total    Small hub        Non-hub    service aviation/reliever
Checked            7 (5, 11)      6 (1, 18)a     10 (5, 19)        DNR          7 (3, 12)
Not checked      93 (89, 95)   94 (82, 99)a    90 (81, 95)         DNR        93 (88, 97)




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Is your airport at risk of defaulting on any outstanding obligations?

Estimated percentage (lower bound, upper bound)
                                                             Non-primary
                                                              commercial         General
Response            Total      Small hub       Non-hub           service aviation/reliever
Yes               3 (1, 6)       7 (1, 24)a     9 (4, 18)            DNR              1 (0, 6)
No            97 (94, 99)     93 (76, 99)a    91 (82, 96)            DNR         99 (94, 100)



Is your airport at risk of closing/ceasing all operations?

Estimated percentage (lower bound, upper bound)
                                                            Non-primary
                                                             commercial              General
Response            Total      Small hub       Non-hub          service      aviation/reliever
Yes               2 (1, 5)       0 (0, 11)a     5 (2, 13)           DNR               1 (0, 6)
No            98 (95, 99)    100 (89, 100)a   95 (87, 98)           DNR          99 (94, 100)



Do any repair stations operate on your airport’s property, whether
airport-owned/operated or non-airport owned/operated? (According
to FAA, the term “Repair Station” refers to a maintenance facility that has
a certificate issued by the FAA under Title 14 of the Code of Federal
Regulations (14 C.F.R.) Part 145 and is engaged in the maintenance,
inspection, and alteration of aircraft and aircraft products. FAA rules are
specific on who can perform maintenance and approve an aircraft,
airframe, engines, etc., for return to service after maintenance has been
performed.)

                  Estimated percentage (lower bound, upper bound)
                                                             Non-primary
                                                              commercial         General
Response            Total      Small hub       Non-hub           service aviation/reliever
Yes           47 (44, 50)     73 (60, 83)a    63 (60, 65)      62 (60, 64)         45 (41, 48)
No            53 (50, 56)     27 (17, 40)a    37 (35, 40)      38 (36, 40)         55 (52, 59)




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     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this repair station/these repair
        stations?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response             Total     Small hub       Non-hub            service aviation/reliever
Negative        50 (45, 54)   65 (49, 79)a    55 (52, 59)       63 (46, 78)a     48 (42, 53)
No impact       25 (21, 29)    12 (4, 25)a     13 (7, 20)       21 (10, 37)a     27 (22, 32)
Positive          8 (6, 11)       2 (0, 12)     7 (3, 13)         3 (0, 14)a       9 (6, 13)
Don’t know      17 (14, 21)   21 (10, 36)a    25 (17, 34)        13 (4, 28)a     16 (12, 22)



Do any fixed base operators (FBOs) operate on your airport’s
property, whether airport-owned/operated or non-airport
owned/operated?
(FBO services may include fueling, hangaring, tie down and parking,
aircraft rental, aircraft maintenance, and similar services.)

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response             Total    Small hub        Non-hub            service aviation/reliever
Yes             77 (74, 80) 98 (90, 100)      98 (95, 100)      95 (94, 96)      74 (71, 78)
No              23 (20, 26)     2 (0, 10)         2 (0, 5)         5 (1, 14)     26 (22, 29)




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     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this FBO/these FBOs?

                  Estimated percentage (lower bound, upper bound)
                                                                Non-
                                                             primary
                                                          commercial         General
Response                 Total    Small hub       Non-hub    service aviation/reliever
Very/moderately 45 (41, 48)       61 (58, 65) 62 (59, 65)       42 (40, 44)   42 (38, 47)
negative
Slightly negative 30 (27, 34) 23 (13, 36)a 24 (22, 27)         28 (17, 42)a   31 (27, 35)
No impact          12 (10, 15)       2 (0, 9)       3 (1, 7)     9 (3, 19)a   14 (11, 18)
Positive              8 (6, 10)    9 (3, 19)a     6 (3, 10)     12 (5, 24)a     8 (5, 11)
Don’t know             5 (4, 7)     5 (1, 15)       5 (2, 9)     9 (3, 19)a       5 (3, 8)



Do any pilot schools operating under Part 141 regulations operate
on your airport’s property, whether airport-owned/operated or non-
airport owned/operated?
(FAA-certificated pilot schools are regulated in accordance with Title 14 of
the Code of Federal Regulations (14 C.F.R.) Part 141. Unlike pilot training
conducted under 14 C.F.R. Part 61, Part 141 pilot schools are required to
use a structured training program and syllabus. Part 141 pilot schools
may be able to provide a greater variety of training aids and require
dedicated training facilities, flight instructor oversight, and FAA-approved
course curricula. Colleges and universities, which may offer aviation
degrees, often provide pilot training under Part 141.)

                  Estimated percentage (lower bound, upper bound)
                                                               Non-
                                                            primary
                                                         commercial         General
Response                Total Small hub          Non-hub    service aviation/reliever
Yes               25 (22, 28) 51 (47, 54)       45 (43, 48)    25 (14, 37)a   23 (20, 26)
No                75 (72, 78) 49 (46, 53)       55 (52, 57)    75 (63, 86)a   77 (74, 80)




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     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this school/these schools?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response             Total     Small hub        Non-hub           service aviation/reliever
Negative        60 (53, 66)    67 (47, 83)a    62 (58, 66)            DNR        59 (51, 66)
No impact       15 (11, 21)      7 (1, 22)a     11 (5, 20)            DNR        17 (11, 25)
Positive         13 (9, 19)     17 (6, 35)a     11 (5, 19)            DNR         14 (8, 21)
Don’t know       11 (8, 16)     10 (2, 27)a     16 (9, 26)            DNR         11 (6, 18)



Do any aviation maintenance technician schools operate on your
airport’s property, whether airport-owned/operated or non-airport
owned/operated?
(An Aviation Maintenance Technician School (AMTS) is an educational
facility certificated by the FAA to train prospective aircraft mechanics for
careers in the airline industry, in aviation maintenance facilities, and in
commercial and General Aviation (GA). 14 C.F.R. Part 147 specifies
requirements for the certification and operation of an AMTS. The
regulation includes both the curriculum requirements and the operating
rules for all certificated AMTSs.)

                  Estimated percentage (lower bound, upper bound)
                                                              Non-primary
                                                               commercial         General
Response             Total     Small hub       Non-hub            service aviation/reliever
Yes                 5 (4, 7)   24 (14, 37)a    12 (7, 17)          5 (1, 14)         4 (2, 6)
No              95 (93, 96)    76 (63, 86)a   88 (83, 93)       95 (86, 99)      96 (94, 98)




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     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this school/these schools?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                                 Non-primary
                                                                  commercial         General
Response                Total      Small hub Non-hub                 service aviation/reliever
Negative         57 (44, 70)a            DNR            DNR              DNR              DNR
No impact           8 (2, 18)a       0 (0, 19)a         DNR              DNR              DNR
Positive            8 (2, 21)a       0 (0, 19)a    5 (0, 24)a            DNR              DNR
Don’t know       28 (16, 42)a            DNR            DNR              DNR              DNR



Do any paid parking concessions operate on your airport’s property,
whether airport-owned/operated or non-airport owned/operated?

                  Estimated percentage (lower bound, upper bound)
                                                                 Non-primary
                                                                  commercial         General
Response              Total      Small hub         Non-hub           service aviation/reliever
Yes                8 (6, 10)     88 (77, 95)a     60 (57, 62)         7 (2, 16)         2 (1, 3)
No              92 (90, 94)       12 (5, 23)a     40 (38, 43)      93 (84, 98)      98 (97, 99)




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     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this business?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                              Non-
                                                           primary
                                                        commercial         General
Response              Total     Small hub       Non-hub    service aviation/reliever
Negative        91 (82, 96)    98 (90, 100) 99 (95, 100)           DNR            DNR
No impact          8 (3, 17)        0 (0, 6)     0 (0, 3)          DNR            DNR
Positive            0 (0, 3)        0 (0, 6)     1 (0, 5)          DNR            DNR
Don’t know          0 (0, 3)      2 (0, 10)      0 (0, 3)          DNR            DNR



Do any car rental or ground transportation concessions operate on
your airport’s property, whether airport-owned/operated or non-
airport owned/operated?

                  Estimated percentage (lower bound, upper bound)
                                                              Non-
                                                           primary
                                                        commercial         General
Response              Total      Small hub      Non-hub    service aviation/reliever
Yes             26 (24, 29)    100 (95, 100) 98 (94, 99)    79 (66, 88)a    17 (14, 19)
No              74 (71, 76)          0 (0, 5)    2 (1, 6)   21 (12, 34)a    83 (81, 86)




Page 80                                                 GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this business?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response                 Total Small hub         Non-hub           service aviation/reliever
Very               65 (60, 71)         90 (79, 82 (76, 87)       65 (49, 78)a     53 (43, 62)
moderately/                               96)a
negative
Slightly           16 (12, 20)      8 (3, 19)a   12 (7, 17)       19 (9, 33)a     18 (11, 28)
negative
No impact             6 (3, 10)       0 (0, 5)     0 (0, 2)         2 (0, 11)      11 (5, 19)
Positive               4 (2, 7)       0 (0, 5)     3 (1, 6)       12 (5, 25)a       4 (1, 11)
Don’t know            9 (5, 13)       2 (0, 9)     3 (1, 7)         2 (0, 11)      13 (7, 22)



Do any food and beverage concessions operate on your airport’s
property, whether airport-owned/operated or non-airport
owned/operated?

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response               Total       Small hub     Non-hub           service aviation/reliever
Yes              21 (18, 23)      98 (91, 100) 80 (74, 86)       41 (39, 43)      13 (10, 15)
No               79 (77, 82)          2 (0, 9) 20 (14, 26)       59 (57, 61)      87 (85, 90)




Page 81                                                       GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this business?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                    Estimated percentage (lower bound, upper bound)
                                                                Non-
                                                             primary
                                                          commercial         General
Response                    Total       Small hub Non-hub    service aviation/reliever
Very moderately/ 89 (84, 93)          98 (91, 100) 94 (89, 97)     88 (69, 97)a     85 (75, 93)a
negative
Slightly negative       7 (4, 11)          0 (0, 5)   6 (3, 11)      12 (3, 31)a       8 (3, 18)
No impact                 3 (1, 7)         2 (0, 9)    0 (0, 2)       0 (0, 11)a       5 (1, 13)
Positive                  1 (0, 4)         0 (0, 5)    0 (0, 2)       0 (0, 11)a        1 (0, 8)
Don’t know                0 (0, 1)         0 (0, 5)    0 (0, 2)       0 (0, 11)a        0 (0, 4)



Do any gift and/or retail concessions operate on your airport’s
property, whether airport-owned/operated or non-airport
owned/operated?

                    Estimated percentage (lower bound, upper bound)
                                                                  Non-primary
                                                                   commercial         General
Response               Total    Small hub       Non-hub               service aviation/reliever
Yes                 9 (7, 11)        100 (95, 39 (36, 41)             3 (0, 11)         4 (2, 6)
                                        100)
No              91 (89, 93)           0 (0, 5) 61 (59, 64)         97 (89, 100)      96 (94, 98)




Page 82                                                      GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this business?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                           Non-primary
                                                            commercial         General
Response             Total        Small hub        Non-hub     service aviation/reliever
Negative       92 (82, 97)      100 (95, 100) 100 (96, 100)             DNR              DNR
No impact         4 (1, 12)           0 (0, 5)       0 (0, 4)           DNR              DNR
Positive           2 (0, 9)           0 (0, 5)       0 (0, 4)           DNR              DNR
Don’t know        2 (0, 11)           0 (0, 5)       0 (0, 4)           DNR              DNR


Do any other aviation-related businesses operate on your airport’s
property, whether airport-owned/operated or non-airport
owned/operated?

                  Estimated percentage (lower bound, upper bound)
                                                                 Non-
                                                              primary
                                                           commercial         General
Response               Total       Small hub       Non-hub    service aviation/reliever
Yes               34 (31, 37)      56 (52, 59) 35 (33, 38)        38 (36, 41)      33 (30, 37)
No                66 (63, 69)      44 (41, 48) 65 (62, 67)        62 (59, 64)      67 (63, 70)



     A. If yes, if known, how would you describe the overall impact
        COVID-19 has had on this business?
        (If more than one business of this type is operating at your airport,
        please report the overall impact on these businesses at your
        airport.)

                  Estimated percentage (lower bound, upper bound)
                                                                Non-primary
                                                                 commercial         General
Response            Total        Small hub        Non-hub           service aviation/reliever
Negative      54 (48, 60)       70 (51, 84)a     61 (56, 65)            DNR        53 (47, 60)
No impact     26 (21, 31)          6 (1, 20)a    17 (9, 29)a            DNR        27 (21, 33)
Positive         7 (4, 11)        12 (3, 28)a    11 (5, 22)a            DNR          6 (3, 11)
Don’t know      13 (9, 18)        12 (3, 28)a    11 (5, 21)a        9 (1, 28)a      13 (9, 19)




Page 83                                                        GAO-22-104429 COVID-19 Pandemic
                                            Appendix II: Survey of Smaller Airports




                                            Have you provided any rent or other rent relief to any of the tenants
                                            operating at your airport?

                                                               Estimated percentage (lower bound, upper bound)
                                                                                                           Non-primary
                                                                                                            commercial         General
                                             Response            Total     Small hub        Non-hub            service aviation/reliever
                                             Yes           23 (21, 26)    81 (69, 90)a     78 (76, 80)       44 (42, 47)         16 (13, 19)
                                             No            77 (74, 79)    19 (10, 31)a     22 (20, 24)       56 (53, 58)         84 (81, 87)



                                                  A. If yes, please describe the type of relief you have provided to
                                                     tenants.

                                                                                                                                Number of
Identified relief measures                                                                                                      responses
Deferred payments (airports provided relief to tenants by not holding tenants to payment deadlines for a period                          152
of time, allowing them to catch up on what they owed later on (by a specified future date)
Waived payments (airports provided relief to tenants by providing abatement/cancellation/waiver of rent, MAG,                            117
or fees for an amount of time)
Changed rates and/or agreements (reduced rates and fees, changed/adjusted leases and agreements, opted                                    77
not to proceed with rate increases, etc.)
Other relief measures                                                                                                                     26

                                            Note: The above results are based on a content analysis of written responses. A total of 289
                                            respondents provided a valid, written response to this question. Respondents may have mentioned
                                            more than one measure taken, therefore responses do not add up to 100 percent.



                                            Have any of your tenant businesses defaulted on any rents?

                                                               Estimated percentage (lower bound, upper bound)
                                                                                                           Non-primary
                                                                                                            commercial         General
                                             Response            Total       Small hub       Non-hub           service aviation/reliever
                                             Yes            10 (8, 12)      27 (17, 40)a 30 (28, 33)         20 (11, 32)a          7 (5, 10)
                                             No            90 (88, 92)      73 (60, 83)a    70 (67, 72)      80 (68, 89)a        93 (90, 95)




                                            Page 84                                                       GAO-22-104429 COVID-19 Pandemic
Appendix II: Survey of Smaller Airports




Has your airport received a CARES Act Airport Grant?

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response             Total       Small hub Non-hub                 service aviation/reliever
Yes             91 (88, 93)    100 (95, 100)     100 (98,      100 (95, 100)      89 (86, 92)
                                                    100)
No                9 (7, 12)          0 (0, 5)     0 (0, 2)           0 (0, 5)      11 (8, 14)



     A. If yes, as of October 2020, for what purposes have you used
        or do you intend to use the grant award?

Payroll/labor costs

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response               Total     Small hub       Non-hub           service aviation/reliever
Checked          47 (43, 50)    85 (73, 93)a 82 (76, 87)         69 (56, 80)a     42 (37, 46)
Not checked      53 (50, 57)     15 (7, 27)a    18 (13, 24)      31 (20, 44)a     58 (54, 63)



Utilities

                  Estimated percentage (lower bound, upper bound)
                                                               Non-primary
                                                                commercial         General
Response              Total     Small hub Non-hub                  service aviation/reliever
Checked         35 (31, 38)    46 (42, 49) 60 (57, 62)           46 (44, 48)      32 (28, 35)
Not checked     65 (62, 69)    54 (51, 58) 40 (38, 43)           54 (52, 56)      68 (65, 72)




Page 85                                                       GAO-22-104429 COVID-19 Pandemic
                                           Appendix II: Survey of Smaller Airports




                                           Debt Service

                                                              Estimated percentage (lower bound, upper bound)
                                                                                                         Non-primary
                                                                                                          commercial         General
                                            Response              Total    Small hub       Non-hub           service aviation/reliever
                                            Checked         12 (10, 14)    53 (49, 56)   34 (32, 37)        18 (9, 30)            8 (6, 11)
                                            Not checked     88 (86, 90)    47 (44, 51)   66 (63, 68)       82 (70, 91)          92 (89, 94)



                                           Equipment

                                                              Estimated percentage (lower bound, upper bound)
                                                                                                    Non-primary
                                                                                                     commercial         General
                                            Response              Total    Small hub        Non-hub     service aviation/reliever
                                            Checked         22 (19, 25)    10 (4, 21)a     35 (33, 38)     30 (19, 43)a         21 (18, 25)
                                            Not checked     78 (75, 81)   90 (79, 96)a     65 (62, 67)     70 (57, 81)a         79 (75, 82)


                                                B. If yes, in what ways did the CARES Act financial assistance
                                                   and its implementation work well in supporting your airport?

                                                                                                                               Number of
Identified relief measures                                                                                                     responses
Budget solvency (Relates to financial aspect of CARES. Responses may include combatting revenue loss, paying                            268
bills, debt covenant requirements, “stay in the black,” meeting payroll, etc.)
Maintain level of service and/or operations (Relates to CARES Act impact on airport operations. Responses may                           235
include kept doors open, rates and charges, maintenance projects, services/operations.)
Avoid layoffs (Relates to impact of CARES on airport employees. Responses include avoiding layoffs and/or                                87
furloughs, allowing employees to keep jobs, and impact on staffing.)
Support projects (Responses include comments that relate to infrastructure projects, 100% match.)                                        74
CARES Act was well distributed (Relates to how the process was implemented. Responses include comments that                              77
relate to the process being easy, expedited, and flexible.)

                                           Note: The above results are based on a content analysis of written responses. A total of 594
                                           respondents provided a valid, written response to this question. Respondents may have mentioned
                                           more than one measure taken, therefore responses do not add up to 100 percent.




                                           Page 86                                                     GAO-22-104429 COVID-19 Pandemic
Appendix III: GAO Contact and Staff
                  Appendix III: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Heather Krause, (202) 512-2834 or krauseh@gao.gov
GAO Contact
                  In addition to the contact named above, Amy Abramowitz, Paul
Staff             Aussendorf, Melissa Bodeau, Kim Bohnet, Jon Carver (Assistant
Acknowledgments   Director), Gail Marnik, Josh Ormond, Justin Reed (Analyst-in-Charge),
                  Gretchen Snoey, Larry Thomas, Elizabeth Wood, Sirin Yaemsiri, and
                  April Yeaney made key contributions to this report.




(104429)
                  Page 87                                     GAO-22-104429 COVID-19 Pandemic
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