Aviation is an industry in transition. From the pandemic putting commercial air travel into a steep dive to becoming a significant beneficiary of spending from the Infrastructure Investment and Jobs Act (IIJA), there’s no shortage of opportunities — and related challenges. What follows is a brief overview of what’s happening with air travel and an update on airport-related projects and spending resulting from the IIJA.
the demand for air travel is rebounding
Air travel, which experienced steep declines during the pandemic, is finally recovering. One statistic used to measure the health of the commercial airline industry is passenger load factor (PLF). PLF measures the proportion of available airline passenger capacity to that consumed. Individual airlines are thought to require a load factor somewhere between 72 and 79 percent to avoid losing money. For U.S. airlines, the total load factor for April 2022 was 84.59 percent, compared to 68.55 percent a year earlier. Even with improving passenger load factors, the total number of passengers in February 2022 compared to 2020 pre-pandemic numbers is still down around 20 percent — but up 106 percent compared to February 2021. It is anticipated that for all of 2022 passenger numbers for North America will be 94 percent of 2019 numbers and that the numbers will fully recover by 2023. By 2025, those numbers will be 112 percent of 2019’s numbers.
Right now, this turnaround is wreaking havoc with airlines’ ability to accommodate demand. Although airline staffing shortages existed before the pandemic, the steep decline in travel drove carriers to reduce their workforces by thousands of people. Globally, there were over two million fewer workers in aviation by September 2021 ,compared to before the pandemic. And as air travel continues to recover, the aviation labor market is still not expanding as fast as it contracted, causing recruiting challenges, higher salaries and more.
the IIJA is a boon to airports
Between fiscal years 2022 - 2026, the IIJA makes available $25 billion to be spent on airport and air traffic control projects. This figure includes $15 billion in grants for infrastructure projects that increase safety and expand capacity, $5 billion in competitive grants for airport terminals and airport-owned control towers and another$5 billion toward improving the condition of FAA air traffic control facilities.
Usually, civil aviation infrastructure is funded through the Airport and Airway Trust Fund, which obtains its revenues from user taxes and fees, including Passenger Facility Charges (PFCs). The FAA collected only $1.69 billion in 2020 from PFCs, less than half the total from 2019. The $25 billion from the IIJA for infrastructure spending comes from the U.S. Treasury General Fund.
The IIJA infrastructure grants can be used for any airport-related project applying the existing Airport Improvement Program (AIP) or PFC criteria. Under these criteria, the money can be spent on runways, taxiways and safety and sustainability projects, in addition to “landside” projects, like terminals and airport-transit connection projects.
According to the FAA, more than 500 airports have submitted applications for more than 600 projects. For the fiscal year 2022, nearly $3 billion will be available for U.S. airports. Almost $1 billion has already been directed to 85 airports to enlarge and upgrade terminals and other facilities. The map below shows the fiscal year 2022 airport funds available by state including projects currently in progress:
FY 2022 Airport Infrastructure Grant Funding by State (in millions of dollars)
The application period for IIJA grants for FY 2022 closed at the end of March 2023. If your organization is interested in pursuing upcoming work, keep in mind that the FAA is prioritizing projects that increase air safety, equity and sustainability and is conducting outreach to minority businesses. Firms interested in pursuing work should check out the process and requirements provided here. A complete listing of the grants made under the Airport Improvement Program at the end of June 2022 can be found here.
a growing aviation sector job market
These grants offer plenty of upside for air-travel-related employers, but finding the labor you’ll need to perform all this work is going to be challenging. It’s anticipated that the demand for engineers (civil, electrical and mechanical) and project managers, already strong before the IIJA was passed, is projected to well outstrip supply.
The aviation industry in the U.S. accounts for more than five percent of the Gross Domestic Product, almost $2 trillion in total economic activity and supports close to 11 million jobs. The rebound in air travel, along with IIJA spending, will fuel a growing job market for engineers and other industry workers. According to the U.S. Bureau of Labor Statistics, job growth for all occupations between 2020 – 2030 will be six percent. Compare that to the growth for these jobs during that same period:
- civil engineers – 8.2 percent
- electrical engineers – 6.8 percent
- mechanical engineers – 7.0 percent
- construction managers – 11.5 percent
These numbers reflect the growing demand for talent and the challenges ahead for those organizations working either directly or indirectly in the aviation industry. If your firm is pursuing, or considering pursuing airport-related IIJA projects, and is concerned about fulfilling your engineering talent requirements, we suggest not delaying your workforce planning, hiring and/or contracting as the demand for this talent will significantly outstrip the supply.
Remember that Randstad Engineering offers many flexible engineering talent delivery models, in addition to placing full-time employees. We can also provide contract professionals, as well as complete or partial project outsourcing. To learn more about how we can help you find the talent you’ll need to capitalize on the IIJA, get in touch today. We’re here to help.