Financing the $110 Million Project
Unlike most of Oklahoma City’s recent renovation and renewal projects,
the expansion of the terminal at Will Rogers was not financed with city tax dollars. Instead, all construction dollars came from funds acquired and managed by the Oklahoma City Airport Trust.
...
The Trust derives most of its funds from three main sources. For capital projects, AA Senior Lien and A+ Junior Lien bonds (as rated by Standard & Poor’s) are sold to investors, while airport improvement project (AIP) grants are obtained from the Federal Aviation Administration (FAA) to fund improvements that affect aircraft and airfield operations. The airport’s operational costs are paid with rents collected from airport tenants and with royalties from airport mineral assets.
AIP grants from the FAA contributed almost $22.5 million to the recent terminal expansion, with the rest coming from the sale of bonds.
To service the bonds, passenger facilities charges (PFCs) are set by the Trust and added to the price of individual airline tickets, then distributed to the Trust by the airlines. The use of the PFCs collected is regulated and approved by the FAA. For the terminal construction project,
$98.5 million of the cost was raised by the sale of bonds, to be paid off with PFC revenues. As a result, nearly 90 percent of the terminal construction expenses came from the people who actually use the air terminal.
The Trust’s reliance on this “pay-as-you-go” concept insures that citizens of Oklahoma City will always have an air terminal that is appropriate to its needs, as reflected by passenger traffic and airline service.
Bookmarks