On December 21, 2020, Congress passed the Consolidated Appropriations Act of 2021, H.R. 133 (the “2021 Appropriations Act”). The President signed the legislation on December 27. The 2021 Appropriations Act authorizes $2.3 trillion in federal spending, including a second round of aid for airports and the air transportation industry in response to the massive decline in air traffic during the COVID-19 pandemic.
Aid to Airports
The 2021 Appropriations Act allocates $2 billion in additional funding for grants-in-aid for airport sponsors to prevent, prepare for, and respond to COVID-19. As with the bulk of funding allocated to airports in April of this year, airport sponsors will not be required to pay a local matching share of funds to receive these grants.
FAA had issued updated Information for Airport Sponsors Considering COVID-19 Restrictions or Accommodations on December 22, which does not address the new legislation. We anticipate FAA will provide further updates to this document in light of the language in the 2021 Appropriations Act. Among other things, FAA may need to clarify the relationship between the conditions requiring relief to all concessionaires and those requiring sponsors to prioritize minority-owned businesses.
In exchange for the funding described above, Congress has extended the requirement in the CARES Act that hub and primary airports retain at least 90% of the number of employees they had as of March 27 through December 31, 2020 (after making adjustments for retirements or voluntary separations) to February 15, 2021. DOT may waive this requirement due to economic hardship or for safety and security reasons.
Aid to the Air Transportation Industry
The legislation also earmarks $15 billion in aid for passenger air carriers and$1 billion for contractors to passenger air carriers. “Contractors” include contractors that provide catering functions for air carriers on or off the airport, and functions on airport property directly related to the air transportation of persons, property, or mail. This category includes security, airport ticketing and check-in, ground handling, aircraft cleaning and sanitation, and waste removal. While cargo carriers received $ 4 billion in aid under the CARES Act, they are not allocated funding under the 2021 Appropriations Act.
As was the case under the CARES Act, Congress directed that the financial assistance be used “for the continuation of payment of employee wages, salaries, and benefits” in these portions of the air transportation industry. Funds are to be allocated based on the amounts distributed pursuant to the CARES Act, with certain adjustments for airlines that did not take full advantage of CARES Act funding.
In exchange for this funding, an entity receiving aid must provide certain assurances, including an assurance that the recipient will (a) refrain from involuntary furloughs or pay cuts through at least March 31, 2021, (b) not buy back its own securities or stock or pay out dividends or capital distributions through at least March 31, 2022; and (c) limit salaries, salary increases, and severance packages for higher paid officers and employees through at least March 31, 2021. To the extent a passenger carrier or contractor furloughed or terminated employees during the pandemic it will be required to recall certain of those employees and provide back pay. Congress also extended DOT’s authority to require that an air carrier receiving assistance maintain scheduled air transportation services as DOT deems necessary to any point the air carrier served before March 1, 2020. DOT’s earlier administration of this program generally permitted significant service reductions.
As was the case under the CARES Act, additional aid may be available to particular airport tenants and contractors under other portions of the 2021 Appropriations Act. In particular, the legislation provides small businesses relief of up to $2 million under the “Second Draw” Paycheck Protection Program (“PPP”). As explained above, however, airport tenants that receive Second Draw funding may not be eligible for the aid allocated specifically for airport concessionaires.
 The 2021 Appropriations Act also makes annual appropriations for FAA and includes several provisions regarding aircraft safety certification in response to recent investigations of Boeing 737-Max crashes.