Troy LaRue, Statewide Aviation Division operations manager, told the Alaska Senate Finance Subcommittee on March 12, 2025, that the state’s rural airport system faces growing capital and maintenance needs, a shortage of bidders on construction contracts, and workforce and housing challenges, while also piloting new connectivity and remote-sensing tools.

LaRue said the rural aviation maintenance and operations budget runs just under $50 million and that leasing revenue for the rural system brings in “a little less than $7 million.” He said the statewide leasing program manages more than 1,400 lease agreements. “It costs just under $50,000,000,” LaRue said of maintenance and operations. He described aging lighting systems, failing automated weather-observation equipment, long lead times for replacement equipment, and an equipment backlog of about $67 million.

Capital-delivery challenges: DOT staff said inflation and difficulty attracting bidders have eroded the purchasing power of recent federal infrastructure dollars. The presentation shows large cost-estimate variance on recent projects and explained that engineers’ estimates have been less accurate during the inflationary period, leaving some projects over budget when advertised for construction. LaRue said the department is pivoting more federal dollars to equipment replacement and surface maintenance to protect at-risk airports.

Procurement and grants: LaRue and administrative staff said the department had a higher administrative burden after the FAA required individual grants for some maintenance programs; they noted a temporary reduction in federal match rates for certain eligible airports under recent federal legislation. The presentation pointed to the Bipartisan Infrastructure Law as a source of new capital funding, but said inflation limited the number of projects deliverable compared with initial expectations.

Starlink deployment and data security: Committee members raised questions about use of SpaceX’s Starlink for rural connectivity. LaRue and Dom Pinon (administrative services director) said the department has procured roughly 150 Starlink terminals, some directly from Starlink and others via third-party managed-service providers (for example, Armada). Pinon said procurements follow state procurement rules and that Starlink is used where other services are unavailable. On security, staff said they do not broadcast operational flight data over Starlink; instead, the terminals are connected to Meraki routers and an encrypted VPN tunnel back to the state data center. “We do not broadcast any operations through Starlink,” LaRue said.

Innovation and unmanned systems: DOT highlighted the ARROW program (Alaska Rural Remote Operating Work program in the presentation), a USDOT smart-grant-funded pilot that taught drone operations to 11 western communities, provided Esri credits for mapping, and enabled live streaming for emergency response. LaRue said a subsequent USDOT grant application worth about $12.4 million (0% match) is under review and would expand the program to additional communities if approved.

Other rural items: The presentation described problems with dilapidated tenant buildings at some remote airports, high costs for rural maintenance contracts (quoted between $30,000 and $35,000), employee housing shortages, and staffing turnover as trained equipment operators move to higher-paying jobs. The slides also noted PFAS testing and remediation pilot projects at Fairbanks (an FAA-funded pilot study) and an automated 139-inspections dashboard that integrates with FAA NOTAM generation to document outages and repairs more precisely.

Follow-ups and committee requests: Senators asked for project-status updates on Angoon (property-acquisition phases were reported as ongoing) and for more detail on procurement and grant timing. DOT staff said they would return with status updates and noted that if federal reimbursements are delayed the airport system has cash flow options to bridge short delays but would need to re-evaluate priorities if grants were permanently unavailable.

Ending note: Statewide Aviation staff framed innovation pilots (Starlink and ARROW drone work) as operational efficiency and emergency-response tools while underscoring the continuing capital and workforce pressures in Alaska’s rural airport system.