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Financial Feasibility Report

The financial study portion of an airport master plan provides guidance on what will be required to demonstrate the airport sponsor’s ability to fund the projects in the master plan. Planners should emphasize the projects that they expect to implement over the near-term, as presented in a Capital Improvement Program (CIP). A more general discussion of the funding of medium- and long-term projects is more appropriate because of the uncertainty of future funding and possible shifts in the importance of those projects.

Airport improvements can be financed from various sources. Some of those sources include the following:

The facility implementation plan of the airport master plan prepares what is commonly referred to as a Capital Improvement Program (CIP). A summary of the CIP and its associated development phasing plan will help recognize appropriate funding sources. Realistic assumptions about the level of funding available are necessary to create an accurate plan of finance that can be carried forward in a financial feasibility analysis.

Review of an airport’s revenue structure also is part of the financial study. Revenue-producing areas, both aeronautical and non-aeronautical, are catalogued. At larger commercial service airfields, additional review of lease agreements, cash flows, and debt service is taken into consideration.

Some of the airport’s improvements also may require that a benefit cost analysis be conducted. A formal benefit cost analysis is required when projects that enhance capacity at an airport will receive $5 million or more in Airport Improvement Program discretionary funds or are named in a letter of intent.

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