Airport Financial Management Flashcards

Which accounting standard requires most US public airports to follow governmental or enterprise fund accounting?

Answer: GASB standards

The Governmental Accounting Standards Board (GASB) sets the accounting rules for public-sector entities, including most US airports.

What is the purpose of an airport's Capital Improvement Program (CIP)?

Answer: To plan and prioritize multi-year infrastructure investments

A CIP is a multi-year schedule identifying planned capital projects, their costs, timing, and funding sources.

Airport landing fees are most commonly calculated based on which aircraft characteristic?

Answer: Maximum certificated gross landing weight

Landing fees are typically assessed per 1,000 lbs of maximum certificated gross landing weight (MGLW) to reflect pavement impact.

When airports apply for AIP discretionary grants, which federal agency reviews and approves those applications?

Answer: FAA

The FAA administers the AIP and reviews applications to determine eligibility and approve discretionary grant awards.

A 'coverage covenant' in an airport revenue bond indenture typically requires the airport to maintain a debt service coverage ratio of at least:

Answer: 1.25x

A 1.25x coverage covenant is the most common minimum threshold in US airport revenue bond indentures.

Which term describes the practice of using revenues from profitable non-aeronautical activities (e.g., parking, concessions) to subsidize aeronautical operations?

Answer: Cross-subsidization

Cross-subsidization transfers surplus revenue from one business segment to offset costs or deficits in another.

Under FAA grant assurances, airports that accept federal AIP funds must make airport property available for aeronautical use on:

Answer: A reasonable and nondiscriminatory basis to all users

Grant assurance 22 (economic nondiscrimination) requires airports to provide access on reasonable and nondiscriminatory terms.