The US Federal Aviation Administration (FAA) provides grants to airports for capital developments under the Airport Improvement Program (AIP). The AIP is one of five major sources of airport capital development funding. The other sources are tax-exempt bonds, passenger facility charges (PFC), state and local grants, and airport operating revenue. Different airports use different combinations of these sources depending on the individual airport's financial situation and the type of project being considered. Small airports are more dependent on AIP grants than large or medium sized airports. The larger airports, whose projects tend to be much more costly, are more likely to participate in the tax-exempt bond market or finance capital development projects with a PFC (Kirk, 2007). Hence, although the AIP may not be the main source of finance for major airports, it is still an important source of capital for improvements related to airport safety, capacity, security and the environment. In 2014, $586.2 million in AIP funds were allocated to the 30 largest hubs in the US (approximately 18.2% of the nationwide grants). The latest estimates for the AIP budget indicate a 19% decrease ($52.2 billion to $42.5 billion) for the period 2013-2017, with respect to the estimates provided two years earlier (FAA, 2012). While this drop can be linked to the waning effect of the economic stimulus legislation (DOT, 2013), the FAA has also been pressured to reduce its budget; the Department of Transportation (DOT) pointing at cost inefficiencies as the root of the problem (DOT, 2013:113). From the Agency's perspective, a debate on the future of the FAA's funding model has been proposed (Flightglobal, 2013). Within a context of financial constraints, public spending should look for a higher efficiency and impact of the resources invested. In this regard, this paper develops a new US airport typology that can help optimise the AIP. The current statutory classification is defined in the National Plan of Integrated Airport Systems (NPIAS) report, which groups airports according to their size and role within the US network and it is mainly based on each airport's share of the total US passenger enplanements (Table 1). Table 1.FAA's system of airport classification. Commercial Airport Type At least 2,500 boardings Hub type Percentage of US-wide annual passenger enplanements (739.3 million enplanements in 2013) Common name Primary Large 1% or more Large Hub Medium At least 0.25%, but less than 1% Medium Hub Small At least 0.05%, but less than 0.25% Small Hub Non-hub More than 10,000 enplanements, but less than 0.05% Non-hub Primary Non-primary Non-hub At least 2,500 and no more than 10,000