When aviation was still new in the country, most airports were constructed in dry and rural areas where there were few neighbors and the land was cheap or affordable. However, with the growth of commercial air travel, there are various supporting industries that were constructed close to the airports. The current modern airports have become constrained because of the rapid development around the airports, and they have inadequate federal funding. Air travel is not only useful for the movement of people but of goods and services especially in the Just-In-Time principle ( Wittman, 2014) . The world is in the information age where the focus in on the mobility of goods and services. The realization that airports have a key role in the economic development of every country has led to the expansion of most airports. Nevertheless, due to the inadequate federal funding, private funding has become essential in the industry. The paper will evaluate the funding of airports.
Airports are the anchors of the local investment and the drivers of economic wealth in the country. As the significance of airports increases so does the role of financing the aviation system and the national aviation system. Federal funding has proved unable to meet the infrastructural needs of the aviation system, and it has made the industry to fall behind that of some countries. After the World War II, the government came up with the grants in aid program to develop the aviation system. They also created the Federal Aviation Administration (FAA) in 1958 ( Zou et al., 2015) . The FAA and the grants in aid program were precursors to the formulation of the Airport Improvement Program (AIP) that was formed in 1982. Similar to the national highway system, most of the aviation infrastructure is collected from taxes imposed on aviation fuel.
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Federal and state agencies tax aviation fuel so that they can collect revenues to fund the National Aviation System. Citizens pay the tax on aviation fuel through a section of the ticket price. The funding of airports is highly associated with a significant federal role and a dominant role of debt finance, especially from the private sector. The role of the federal government is evident in two main ways. The first technique is the discretionary and formula grants that are funded by international departures, airline tickets, freight waybills, and aircraft fuel. The second technique is by the exempting federal tax on the interest income for the owners or holders of airport bonds. Also, the FAA runs the Passenger Facility Charge (PFC) program where they generate local finances to fund airport improvements ( Kenville & Smith, 2017) . While airport capital investment is financed by the combination grants, cash reserves, commercial loans, and debt capital, the lion's share of airport infrastructure is contributed by the provision of federal grants and the sale of tax-free bonds via the AIP program.
PFCs are not just a tax but a user fee that is levied on all passengers who travel through the airport. Also, the funds raised by the PFCs can only be used in the airport they were collected. Airports also generate revenue from aircraft and automobile parking fees. While US airports are only owned by the local and state governments, they may contract some of the services to private companies. Some of the services that are contracted to private firms may include retail concessions. However, some airports have gone a step further and allowed private firms to manage airport operations fully such as Albany International ( Zou et al., 2015) . Other firms have also contracted private companies in the design, construction, and management of new terminals. In general, US airport as managed as static utilities by the government and not for profit making or entrepreneurial business.
The US aviation needs to improve. Otherwise, it risks falling behind its global peers. The potential of the national aviation system to invest in airport infrastructure is significant to maintain and improve the level and quality of service. All airports and their governing bodies are searching for new methods of improving their revenue generation systems. One of the options that were considered includes eliminating the federal cap that was set on the PFCs. Since airports have the mandate to serve a certain region or locality, the local government should be given the responsibility to set the appropriate PFCs according to the average income of the customers they serve. Also, airports are requesting to have a deregulated PFC system that will assist in “de-politicization” of the airport system ( Wittman, 2014) . The other option is to fully privatize the US Aviation industry in the form of long-term leases. The leases assist the governments to shifty growth responsibilities, risks, and responsibilities to the private companies ( Wittman, 2014) . Canada successfully privatized its airports in the 1990s. In Europe, about 75% of air transports are through privatized airports. Also, most of the government-owned airports in Europe act like commercial enterprises such as the Charles de Gaulle Airport in Paris. In Spain, about 46 major airports are publicly traded corporations.
The paper evaluates the funding of airports. The national aviation system in the US requires adequate funding so that it can improve its infrastructure. Also, the US airport system has fallen behind the major airport systems regarding multimodal opportunities, growth opportunities, infrastructure development, and customer service. The capacity of US airport to partner with the private sector and local communities to create stronger economic corridors and regions is dependent on the availability of adequate funding ( Kenville & Smith, 2017) . The federal government should formulate better policies that will encourage private investment in US airports to improve its management and competitiveness.
References
Kenville, K. A., & Smith, J. F. (2017). Funding Industrial Aviation (No. Project A11-03, Topic S01-14).
Wittman, M. D. (2014). Public funding of airport incentives in the United States: The efficacy of the Small Community Air Service Development Grant program. Transport Policy , 35 , 220-228.
Zou, B., Kafle, N., Chang, Y. T., & Park, K. (2015). US airport financial reform and its implications for airport efficiency: An exploratory investigation. Journal of Air Transport Management , 47 , 66-78.
