Expected $15B In Federal Money Is 'Gasoline On The Fire' For Airport Construction

With $9B in federal funding since 2021 offering a substantial lift, airports across the country are embarking on ambitious construction projects aimed at serving the millions of passengers taking to the skies after years spent grounded by the pandemic.

Another $6B in federal money is expected in the next two fiscal years for a grand total of $15B in half a decade, the result of airport infrastructure funding in the Bipartisan Infrastructure Law.

Airport renovations from coast to coast are seen as crucial for maintaining the vitality of cities and their economies through business and leisure travel. But even with local political support and funding available, they run into challenges.

“We have all of the challenges that conventional construction folks are having right now,” Clayco Aviation Business Unit Leader Mac Glinn told Bisnow, referring to worker shortages, materials delays and scheduling dilemmas. “And then layer on the difficulties associated with working at an airport.”

U.S. airlines carried 83.1 million passengers in August, according to the Bureau of Transportation Statistics. Enplanements, or passenger boardings, were up 1.7% month-over-month in August, the latest month for which data is available, and up 8.4% from the same month in 2022. The August 2023 total is also only 4.2% less than the all-time-high passenger volume reached in January 2020, the bureau reported.

Paralleling that growth, the U.S. airport construction market came in at about $123.9B in 2022, according to data released earlier this month, and is estimated to grow by 4% each year by 2028. Worldwide, airport construction totaled $1.3T in 2022 and is forecast to reach $1.8T by 2030.

“[The pandemic] had a real chilling effect on our business. A lot of stuff slowed down or stopped completely,” Glinn said.

But “enplanements at most airports are at or above pre-pandemic levels,” he said.

The surge in travel and accompanying interest in renovating airports has created a rush on contractors who perform the somewhat specialized job of improving the complex beasts that are airports. St. Louis, Houston and Denver are just a few of the large cities with airport work underway, along with a slew of smaller cities.

“So all of that pent-up demand, all of that work that stopped during Covid, is being rushed forward now, and air carriers are flush with cash as well,” Glinn said. “They're working on ground equipment, maintenance facilities, hangars, and clubs and amenities for elite travelers to try and attract elite travelers. All of that work is going gangbusters as well.”

Airport infrastructure funds are “the gasoline on the fire,” according to Glinn, along with pandemic stimulus money.

But demand and financing are just two of the elements needed for a successful project. Others are harder to attain.

Laborers working on airport projects often have to clear higher security bars than construction workers putting up a standard warehouse or apartment building. Complying with federal authorities like the Federal Aviation Administration and Transportation Security Administration adds a layer of difficulty to hiring and thins the herd of potential workers. 

There has been a decrease in salaried professionals who are prepared to invest the necessary on-site hours that an airport project delivery poses, Skanska USA Civil Project Executive David Tullis told Bisnow by email.

Coordinating with federal agencies is just one element of the complicated dance contractors and airports must perform. The very volume of travelers the projects seek to accommodate also complicates matters.

“Some of the challenges we’ve seen recently have to do with complex sequencing of the work,” PCL Construction Manager Blake Holtom told Bisnow in an email. “There is so much going on with upgrades or renovations due to the increased traveler throughput in many airports that we are not able to just shut down portions of the operating airport during our projects.

“In many cases, the company has requirements to remodel a gate or restaurant while keeping it open or to remove and replace a baggage handling system while keeping it operational,” Holtom said. 

Despite the challenges, work is underway not only at large airports like Chicago’s O'Hare International Airport or Seattle-Tacoma International Airport but also at midsized and smaller facilities.

Clayco is working on some of the large airport projects, including work at O'Hare, but also on major upgrades for smaller airports that don't want to be so small, such as a terminal renovation and expansion at Fort Wayne International Airport in Indiana and an expansion of Idaho Falls Regional Airport.

Appleton, Wisconsin, is among the smaller cities looking to expand its air travel capacity.

“If we go back to 2016, we've experienced double-digit growth in our passengers every year, with the exception of the unpleasantness of 2020,” Appleton International Airport Air Service and Business Development Manager Jesse Funk said, adding that plans for expanding Appleton's small airport began before the pandemic but kicked into high gear since, as passenger volume recovered quickly.

A 47K SF addition to the airport will essentially double Appleton's concourse space, and the airport's 10 gates are being revamped to handle larger jets more efficiently, Funk said, as airliners phase out the regional jets that used to be the norm for airports the size of Appleton.

“Our community has supported the Appleton airport, and then the airlines have seen that demand and added flights,” Funk said. 

Another element driving the charge to give U.S. airports a facelift is the growing number of international travelers who have seen airports in other countries that are often in better shape and offer more pleasant travel experiences. 

“I call it terminal envy,” said Ty Osbaugh, who leads Gensler's aviation practice.

“U.S. airports, in particular, have watched airports around the world invest billions in new facilities and upgraded facilities that try to enhance the passenger experience and essentially become civic monuments to that location,” Osbaugh said. “Whether that's Dubai, Abu Dhabi, Singapore, they're trying to create destinations, and for years, the U.S. airports have kind of fallen into this model of being very efficient machines.”

U.S. airports now want to join the movement, Osbaugh said, citing Nashville International Airport as an example. This year, it unveiled a 140-foot-tall digital art installation to remind passersby of where they are arriving.

“It used to be that airports were somewhat homogenous, and they were designed in such a way that didn't necessarily reflect the brand of their city,” Osbaugh said. “We're now seeing that in most of the RFPs. Airports want to reflect the culture of the city in some ways, and they don't always want to be subtle about how they express it.”