Bridging the Gap: Financial, Operational, and Modernization Challenges Facing Nonhub Primary Commercial Service Airports

A bustling airport runway with multiple aircraft and a prominently visible control tower during the day.

Introduction

Nonhub primary commercial service (NPCS) airports are a critical component of the United States (U.S.) National Airspace System (NAS). These less busy airports are generally located in smaller communities and connected to the broader aviation network of hub airports. In addition to providing passenger travel options, NPCS airports play a vital role in the sustainment of their local economies. Airports are catalysts for encouraging local development, investment, business opportunities, supply chain, cargo movement, medical care, government, and emergency support services (American Association of Airport Executives [AAAE], 2025). The Federal Aviation Administration (FAA) defines a NPCS airport as those airports that account for less than 0.05 percent of all commercial passenger enplanements but have more than 10,000 annual enplanements (Federal Aviation Administration [FAA], 2024). According to the latest National Plan of Integrated Airport Systems (NPIAS), there are 252 NPCS airports, encompassing three percent of the nation’s 2023 passenger enplanements (FAA, 2024). Although these figures appear smaller in comparison to larger hub airports, the social and economic impact of NPCS airports on their local communities reaches far beyond what the numbers suggest.

Historical Context

Over the decades, a divide developed between large hub airports and smaller NPCS airports due to financial, operational, and network changes. This gap began with the passage of the Airline Deregulation Act in 1978 which removed the federal government’s control over airline routes, fares, and market entry (Airline Deregulation Act, 1978). Prior to its passage, the U.S. Civil Aeronautics Board, the predecessor of the FAA, regulated airline services and ensured that smaller communities had access to scheduled air service. However, after deregulation the airlines transitioned to a profit-driven model that concentrated resources at hub airports and systematically began cutting less profitable routes. This left smaller communities marginalized and without air service once less profitable routes were removed from the network (U.S. Department of Transportation [USDOT], 2024; Prather, 2015).

Recognizing this challenge, the U.S. Congress included the Essential Air Service (EAS) program in the Airline Deregulation Act. The EAS program subsidized airlines to provide qualifying EAS communities at least two round trips per day from their local airport to a larger hub airport (USDOT, 2024; Prather, 2015). Today, there are 110 communities serviced by the EAS program. Even with the support of this program, many NPCS airports and surrounding communities continue to face challenges associated with limited revenue streams, reduced flights schedules, and aging infrastructure.

Federal Funding and Systematic Disparities

To sustain the NAS, significant amounts of capital funding are required to maintain and expand America’s aging airports. A critical component of airport revenue is federal funding through federal grant and charge programs. The Airport Improvement Program, Passenger Facility Charges, and the more recent Airport Infrastructure Grant program offers airports consistent federal funding to meet their capital needs (FAA, 2025). However, funding levels are dependent on passenger enplanement data and generally favor large hub airports that service a larger percentage of the traveling public. According to the latest NPIAS report, the 31 large hub airports accounted for 69% of all passenger enplanements across the U.S. and 36.5% ($25 billion) of the planned airport development costs. By comparison, the 252 NPCS airports only accounted for 3% of nationwide enplanements and 12% ($8 billion) of future airport development costs (FAA, 2024). These figures highlight the central challenge faced by NPCS airports: the requirement to meet the same regulatory and operational requirements of larger airports, but with far less financial resources and revenue streams. The result is a growing divide between large airports with substantial means and NPCS airports that struggle to meet basic operational demands. This is one of the many challenges faced by NPCS airports.

Research Gap and Purpose of Study

To understand the unique challenges faced by NPCS airports, this paper explores the current body of research regarding this topic. The researcher determined that numerous studies examined the financial, operational, and sustainability challenges of airports in general or favored large hub airports (Debbage & Baba, 2025; Siozos-Rousoulis et al., 2021; Zhao et al., 2021). Some research was available that discussed challenges faced by regional airports in Europe, China, and the South Pacific (Budd et al., 2024; Feng et al., 2022; Wu et al., 2023). However, it was difficult to find studies conducted on topics associated with U.S. NPCS airports and only a few were located that specifically addressed NPCS airport challenges (Gao, 2020; Gao & Sobieralski, 2021; White, 2024).

Given this context, the purpose of this paper is to answer the research question, “What challenges do U.S. NPCS airports face as they balance regulatory compliance, operational sustainability, and the need for modernization?” Key themes from the available body of literature are presented through the lens of NPCS airports. Understanding the unique challenges faced by NPCS airports can help policymakers, airport managers, and investors make informed decisions about the future of their airport.

Financial and Economic Challenges

Financial and economic challenges were among the most identified topics in the current body of literature. Airports of all sizes must balance airport revenue and expenditures, however, NPCS airports are systematically at a disadvantage given their limited resources and passenger enplanements. Long-term financial and economic challenges create persistent funding gaps that impact operational readiness and sustainability. The following subsections examine airport revenue and investment limitations, economic sensitivity and competition, financial risk and environmental hazards as they apply to NPCS airports.

Airport Size and Revenue Limitations

A common theme presented in the current body of literature was the connection between airport size and financial performance. Although commercial service airports are typically non-profit ventures managed and owned by a local government entity, they are expected to be financially self-sufficient and raise capital to fund development projects. NPCS airports have limited funding options and struggle to cover maintenance, development, and modernization costs (AAAE, 2025). Airports produce revenue through a variety of aeronautical and non-aeronautical activities including landing fees, airport parking, passenger service charges, retail concessions, parking lots, and ground transportation. However, these small-scale funding sources rarely provide the revenue required to complete capital projects which requires airports to look elsewhere (AAAE, 2025).

Additionally, Raghavan and Ya (2021) found that airport size was a major factor in determining liquidity and leverage capacity, with smaller airport being more financially vulnerable. Other research suggested that smaller airports were more dependent on internal subsides where revenue streams were more limited in comparison to larger hub airports (Karanki, 2024). One of the ways in which airports bridge the funding gap between revenue and costs is through issuing airport bonds. Research indicated that bond ratings for NPCS airports were typically lower than ratings for large hub airports, which discouraged airport investment (Golkar et al., 2024). This brings forth a recurring cyclical issue: smaller airports cannot attract investors because of limited revenue, but without adequate investment, they are not able to modernize aging airport infrastructure or expand their existing capabilities.

Dependence on Federal Funding Subsidies

Due to limited internal revenue-generating capacity, many NPCS airports depend heavily on federal grant programs or subsidies to sustain their operations. In the U.S., the FAA established various federal grant programs to ensure that all NPIAS airports receive consistent annual federal funding for capital projects (FAA, 2025). Although NPCS airports receive the same amount of entitlement funds as larger airports, they generally lack the resources and personnel to develop competitive grant application packages for discretionary grant funds (FAA, 2024). This is unfortunate because NPCS airports have grown to be reliant on federal grant funds to cover their airport expenditures and the additional funding could help upgrade their aging facilities.

Moreover, a comparative study of regional airports in the South Pacific suggested that airport subsidies were helpful in transforming smaller airports. Wu et al. (2023) found that airport subsides were related to a significant increase in scheduled flight capacity and helped unprofitable regional airports increase their regional air transport activity. Although the U.S. has a more robust federal funding process, local and regional governments often support their local NPCS airports financially when there is a gap in capital funding requirements. Bloch et al. (2021) supported these findings, suggesting that an active local, regional, or national governing authority was an essential component in producing a successful airport.

Economic Sensitivity and Competition

NPCS airports also face external financial pressures from their local economies, passenger leakage, and competition from nearby large hub airports. In one study, Gao (2020) evaluated air traffic leakage from Indianapolis International Airport to two large hub airports in the neighboring state of Illinois, Chicago O’Hare International Airport and Chicago Midway International Airport. The study found that an airport’s catchment area was impacted by location, service level, traffic volume of competing nearby airports, length of trip, destination, purpose of travel, preference of airline, and number of travelers in the group. These findings were supported by Gao and Sobieralski (2021) who found that the passenger yields of nonhub airports increased as distance from a neighboring hub airport increased.

Additional research examined the impact of local economies on passenger traffic rates and found that 41.2% of the variation in air passenger demand during 2021 was correlated to the percent of the local workforce employed in information, transportation, and warehousing, professional-scientific-technical services, or finance-insurance-real estate industries (Debbage & Baba, 2025). Further research suggested that airport proximity to logistics and air cargo hubs facilitated airport economic growth (Florido-Benitez, 2023). These are valuable insights for NPCS airport managers as they develop operational and marketing plans to reach their customer base. Understanding the impact of passenger leakage, airport competition, and the local economy is an important step in overcoming the financial and economic challenges faced by NPCS airports.

Financial Risk and Environmental Hazards

Finally, Assab (2023) explored the financial burdens of environment, climate, and insurance costs on airports. Through the examination of the top 100 U.S. airports, Assab (2023) compared the impact of extreme precipitation on airports, the impact of flood damage, cost of flood insurance premiums, county-level public adaptation investment, and building costs. Findings suggested that an increase in insurance costs had a negative effect on investment. However, flood insurance costs did not appear to affect investment–cash sensitivity. Although this study was not specific to NPCS airports, it highlights an industry-wide financial challenge for airports when it comes to balancing financial risk, operations, and environmental hazards. It is expected that NPCS airports would be strained more by environmental hazards given their limited financial resources and ability to deal with those hazards.

In summary, research suggests that NPCS airports face many financial and economic challenges including funding and investment limitations, economic sensitivity and competition, financial risk and environmental hazards. The lack of financial resources also impacts NPCS airports’ operational and modernization capabilities, which are discussed in the following sections.

Operational Challenges

While financial and economic challenges were the most common theme presented in the current body of literature, NPCS airports also face significant operational challenges. NPCS airports are required to meet the same regulatory, security, and safety requirements as their large hub airport competitors. However, they generally have fewer personnel, equipment, smaller budgets, and passenger base resulting is less revenue production. Revenue is needed to cover operational and modernization costs. The following subsections highlight a variety of operational challenges discussed in the current body of literature including unstable passenger markets, route and network disruptions, and seasonality implications as they pertain to NPCS airports.

Unstable Passenger Markets

The post-pandemic world saw a shift in passenger travel markets with airports adjusting to meet the new demand. Historically, NPCS airports had unstable and highly sensitive markets impacted by local economic conditions and network events (Debbage & Baba, 2025; Florido-Benitez, 2023; Gao, 2020). In a comparative study of regional airports in England, several key factors leading to the cessation of commercial air service at regional airports were identified. These factors included geographic location, relying on a single airline operator or a single type of airline model, ownership stability, public sector shareholder involvement, airport branding, and inadequate infrastructure or operational constraints (Budd et al., 2024). These findings are applicable to U.S. NPCS airports because they highlight key friction points that airport managers should address before reaching the point that commercial service ceases at their airport.

Additionally, the impact of COVID-19 on the aviation industry reshaped domestic air travel operations and revealed structural weaknesses at smaller airports. In response to the pandemic, the FAA provided emergency relief through the Coronavirus Aid, Relief, and Economic Security (CARES) Act grants to help cover operational costs during a period of limited passenger traffic (FAA, 2023; Hotle & Mumbower, 2021). However, Hotle and Mumbower (2021) found that smaller airports lacked the network resilience of larger hubs, which led to uneven recovery rates and impacted airline scheduling. Under the CARES Act, those airlines servicing larger airports were allowed to reduce their flight departures, while they were expected to retain flights to smaller airports. In the short-term, this action ensured that smaller communities retained airline service during the pandemic, however, NPCS airports still recovered at a slower rate than larger airport hubs (Hotle & Mumbower, 2021).

Route and Network Disruptions

Another operational challenge faced by NPCS airports was developing profitable route networks for its passenger market. According to Gao and Sobieralski (2021), proximity to larger competing hub airports impacted NPCS airports negatively due to traffic leakage and route availability. However, the addition of airline service provided by low-cost carriers (LCCs), such as Allegiant Airlines, helped lower passenger yield at nonhub airports (Gao & Sobieralski, 2021). In comparison, the U.S. domestic cargo market favored route network structures utilizing smaller airports in small or mid-sized cities rather than large hub airports located in metropolitan cities (Florido-Benitez, 2023; Zhao et al., 2021). These findings offer insight for NPCS airport managers, highlighting the importance of revenue diversification through the integration of LCCs and entrance into the cargo market.

However, the U.S. domestic air transportation network still faces challenges in its ability to handle significant travel disruptions or global events. According to Siozos-Rousoulis et al. (2021), the September 11^th , 2001 terrorist attacks triggered vast restructuring of the U.S. air traffic network, with commercial airlines improving their efficiency and the U.S. government improving security. In the period after the attacks, the NAS’s disruption tolerance showed significant improvement. However, research suggested that the robustness of the system did not significantly improve and remains vulnerable to traffic disruptions (Siozos-Rousoulis et al., 2021). This is an important distinction because NPCS airports already struggle under normal conditions, therefore, even minor disruptions in the network can cause significant impact at the local level.

Seasonal Implications

Additionally, research suggested that NPCS airports were exposed to more challenges in travel demands due to weather or tourism activities, leading to higher operating costs (Adorno, 2025). In one study, Ardorno (2025) explored the impact of seasonality on regional airports in Italy and found that strategic partnerships with LCCs and ground transportation modes helped facilitate year-round traffic growth. However, regional airports continued to face challenges posed by seasonal travel demands and the need for coordinated stakeholder engagement. These findings have practical applications for U.S. NPCS airports because many have local economies based on seasonal activities or recurring non-aviation events.

In summary, research showed that NPCS airports face operational challenges associated with unstable passenger markets, route and network disruption, and seasonal implications. These challenges stem from network vulnerabilities, shifts in demand, competition from large hub airports, and global dynamics. Understanding the operational challenges of NPCS airports is essential to their long-term sustainability.

Modernization Challenges

Finally, in addition to financial and operational pressures, NPCS airports face significant challenges associated with the modernization of the NAS. Legacy airports are being pushed to integrate emerging technologies, develop sustainable airports, and meet future noise compatibility requirements. Given their limited financial resources, NPCS airports often struggle to maintain existing aging infrastructure and are unable to build new capital projects to meet modernization expectations (AAAE, 2025). Given this context, the following subsections explore the modernization challenges faced by U.S. NPCS airport as presented in the current body of literature.

Integration of Emerging Technologies

The advancement of new aviation technologies presents both opportunities for growth and challenges for NPCS airports. Aircraft size and operational characteristics directly impact the longevity of airport infrastructure. The integration of new airframes into legacy airports pose infrastructure challenges that require funding to rectify. For example, White (2024) explored the effect of new variants of narrow-body aircraft on regional airport pavements and found that the heaviest variants of B737/A320-sized aircraft required, on average, a 51% thicker pavement base than the lightest variants. For NPCS airports that already have aging infrastructure and limited funding availability, the requirement for thicker pavement to meet the demands of new aircraft variants poses a significant challenge. Failure to provide adequate operational surfaces for new aircraft will limit NPCS airports’ ability to attract new airline business with modernized fleets.

Moreover, the integration of electric aircraft into legacy airports highlights another challenge faced by NPCS airports. Doctor et al. (2022) examined battery charging regimes for electric aircraft, and their impact on airside stand capacity. A critical issue identified through this study was the relationship between optimal charging times and the number of aircraft stands that were needed for electric aircraft recharging. To support electric aircraft, NPCS airports must provide retrofitted apron parking spots that have the required charging capabilities. Updating existing infrastructure costs significant capital, especially given the added power infrastructure requirements to support electric aircraft charging capabilities.

Similarly, Kelly et al. (2024) highlighted the importance of airport design and operational efficiency as it pertains to modernizing legacy airports. In this study, Part 139 airports located in the Southern and Southeastern U.S. were evaluated to determine which airport characteristics led to operational efficiency. Runway configuration and the scale of air carrier and general aviation operations were significant predictors of airport efficiency. However, NPCS airports lack the financial resources needed to make significant changes to airport infrastructure design or reorient the runway for maximum operational efficiency. Regardless, these findings are helpful for long-term development planning and to assist NPCS airports with identifying operational limitations in their airport design.

Developing Sustainable Airports

NPCS airports also faced challenges developing sustainable operations, however, this appears to be a consistent issue across all airports. Jia et al. (2024) found that most of the world’s top 150 busiest airports were not aligning with the United Nations sustainable development goals, including the reduction of carbon emissions and integrating renewable energy sources into the airport environments. Despite this reality, research suggests that public opinion strongly supports funding and developing sustainable airports (Winter et al., 2021). Additionally, Marete and Johnson (2021) explained that small nonhub airports in the U.S. lacked a consistent sustainability planning framework. Instead, these airports focused efforts on workforce development and passenger safety as immediate priorities. This was expected given the limited resources available to smaller airports, which must be used to improve customer satisfaction and airport performance.

Future Airport Noise Compatibility

Finally, there is hope for NPCS airports as aircraft technology continues to advance into the future. Aircraft noise compatibility is a long-standing issue for airports and directly impacts their surrounding communities. Einicke and Kennedy (2025) projected that despite a rise in air traffic, overall noise exposure is anticipated to decrease over time as aircraft become more efficient. Should this projection become a reality, NPCS airports will benefit from the reduction in aircraft noise and expected positive effect on their community relations. The challenge will be for NPCS airports to develop suitable infrastructure to support the emerging technologies as they join the industry.

In summary, NPCS airports face unique modernization challenges related to emerging technologies, airport infrastructure compatibility, and sustainability. The integration of electric aircraft and new passenger aircraft variants into legacy airports will require significant investment to achieve an operational environment that is supportive of emerging technologies. NPCS airports will continue to face modernization challenges as the industry rapidly advances, funding remains limited, and the industry focus remains on the development of large hub airports.

Conclusion

The purpose of this research paper was to explore the financial, operational, and modernization challenges faced by NPCS airports. These smaller airports are a vital component of the aviation network and provide essential air service to their communities. A review of the current body of literature highlighted many challenges, but one key theme emerged that underscores the main challenge faced by NPCS airports: the tension between limited financial resources and the need for future development. NPCS airports consistently rely on federal assistance to meet their financial obligations and complete airport development projects (AAAE, 2025; FAA, 2024; Prather, 2015). Annual passenger enplanements are a key factor is determining airport hub status, funding opportunities, and encouraging airline partnerships. Until NPCS airports can attract more passengers, strategic airline partnerships, or community stakeholder investment, they will continue to struggle to compete with larger airports. The themes from the current body of literature presented in this paper, highlights the continuous tension between NPCS airports’ financial reality and operational necessity. In conclusion, future research is recommended that specifically explores the unique challenges faced by U.S. NPCS airports and determine sustainable solutions that benefit the NAS at large.

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