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2013 Economic Impact Study San Francisco International Airport

2013 Economic Impact Study San Francisco International Airport SFO Connects the Bay Area to the World. May, 2013. In Association with: ICF SH&E, Inc . and Polaris Research and Development, Inc. Prepared by:

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2013 Economic Impact Study San Francisco International Airport

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  1. 2013 Economic Impact StudySan Francisco International Airport SFO Connects the Bay Area to the World • May, 2013 • In Association with: • ICF SH&E, Inc. and Polaris Research and Development, Inc. • Prepared by: • Economic Development Research Group, Inc.155 Federal Street, Suite 600, Boston, MA 02110

  2. I Executive Summary

  3. Findings • Direct Impacts • On Airport – 33,600 jobs, $5.5 billion in business activity • Off Airport – 82,800 jobs from $9.1 billion in visitor spending • Off Airport – 36,400 jobs from cargo valued at $17 billion, originating in the Bay Area and shipped from SFO • Spin-off “ripple” effects of 135,500 jobs and $24.6 billion in business revenues • $2.5 billion in state and local tax revenues

  4. Total Economic Impact

  5. How We Got There • Verified on-airport direct employment • Conducted a 1,500 person visitor intercept survey in 4 languages • Collected and analyzed freight data • Applied the IMPLAN Modeling Package • Identified aviation and major state and local tax impacts

  6. II Overview

  7. SFO Plays an Important Role in the Bay Area • A jobs center and economic engine • An enabler of business and travel tourism • Enhancing the regional economy and hospitality industries • A freight gateway • Supporting goods producing industries throughout the Bay Area • A generator of tax revenues for California and the Bay Area

  8. What are the impacts? • Jobs • Direct Jobs – generated by SFO and would not exist without SFO. • Indirect Jobs – generated when SFO or SFO-dependent firms buy goods and services from businesses located in the area. • Induced Jobs – generated by spending of wages that are earned by workers of SFO or SFO - dependent firms, and by employees of suppliers, for items such as food, clothing and housing. • Business Revenue • Sales to airlines and service companies directly dependent on SFO. • Reported in terms of direct, indirect (local purchases) and induced (labor re-spending) categories. • Personal Income • Wages and salaries received by individuals employed due to SFO activity. • Reported in terms of direct, indirect (local purchases) and induced (labor re-spending) categories.

  9. Categories and Measures of Impacts • Jobs, business revenues, personal income and taxes are shown by airport-generated, visitor industry, and air cargo related categories 9

  10. Contribution to the Bay Area Economy 10

  11. III Jobs Center and Economic Engine

  12. 33,580 People Work at SFO Distribution of On-Airport Jobs Jobs at SFO include: • Airlines – passenger and cargo activities • Aviation Support Services – catering, in-flight entertainment, aircraft handling, fueling and maintenance • Freight Transport – courier, delivery, customs broker and trucking • Concessions – restaurants, retail stores and passenger services • Ground Transportation Services – rental car, taxi, limousine service, and bus companies • Air Terminal Operations Staff – security, building maintenance and facility management • Public Agencies – FAA, other Federal Agencies and Airport Administration (including Police and Fire Departments) Admin., Gov’t& Security 9% Concessions 15% Passenger Ground Trans. 17% Construction 3% Aviation Support Services 7% Passenger Airlines 47% Freight Transport 2%

  13. Jobs and Business Revenues by County Airport Generated Business Impacts (3)($ millions) Jobs Across the Bay Area $35 $90 $162 $103 Subtotal Direct: 33,600 Subtotal Indirect & Induced: 26,400 Total: 60,000 $394 $804 $675 $6,663 $932 (1) By place of residence(2) By location of job (3) Includes direct, indirect, and induced impacts Note: Jobs rounded to the nearest 100.

  14. IV Visitor Industry Impacts

  15. The Airport Supports Tourism Domestic Enplaned Passengers International Enplaned Passengers 3.6 million total 13.1 million total 51.6% 55.4% Domestic Visitors International Visitors Total Visitors 6.8 million 8.7 million 2.0 million California Rest of U.S. 1.2 million 5.6 million Note: Totals may not add due to rounding. Sources: SFO Traffic Statistics; U.S. DOT O&D Survey, YE 2Q 2012; U.S. DOT, T-100 Database; IATA, PaxIS Database; U.S. DOC, International Air Travel Statistics, 2011.

  16. SFO Binds the Bay Area to the Nation 525 Daily Departures to 72 Domestic Markets (non-stop) Source: OAG, July 2013. 16

  17. SFO is the Bay Area’s International Gateway 546 Weekly Departures to 33 International Markets (non-stop) Source: OAG, July 2013. 17

  18. The Airport Supports Tourism • Visitors spend on hotels, restaurants, retail purchases, recreation, and local travel (taxis, car rental, and public transportation) • International business travelers on average spend close to $2,000 per trip while domestic leisure travelers spend more than $800 per trip Individual Spending per Trip * direct, indirect and induced

  19. Total Impacts of Visitor Spending By County* Business Sales($Millions) Jobs in County Santa Clara $1,521 Santa Clara 11,283 San Mateo 10,994 San Mateo $1,416 Alameda $1,524 Alameda 12,671 Napa 8,670 Napa $1,016 Sonoma 6,481 Sonoma $725 Contra Costa $239 Contra Costa 1,968 Marin 1,582 Marin $192 Solano $93 Solano 834 San Francisco $9,556 San Francisco 70,710 *direct, indirect and induced 19

  20. V Impacts of Air Reliant Users (Freight shippers)

  21. Air Freight at SFO Supports the Bay Area Economy • Enables transport of goods from Bay Area to customers in both long-distance domestic and international markets. • Cargo services at SFO support Bay Area firms’ efforts to sell products across the U.S. and the world, and thereby maximize shares of national and international trade. • Without the freight services offered at SFO (and if the similar scale of services are not assumed by another regional airport) • Companies in the Bay Area that produce and ship products would find markets limited and market shares curtailed. • In turn, economic activity in the Bay Area that is associated with production of goods shipped through SFO would be reduced.

  22. Value of Air Freight Goods produced in the Bay Area and shipped from SFO • Represent sales of Bay Area companies in international and long distance US markets • The sales bring income into the Bay Area from these markets to support jobs in the region. • “Multiplier” effects (supplier sales and worker spending) generate additional jobs in the Bay Area. • Parts of the sales revenue are paid as wages & profits that are spent in the region; and • parts of the sales revenue is paid to supplier firms in the region for purchase of good and services that support additional jobs and wages

  23. Exports from SFO Exceed Imports (by value) Value of Exports by Air – Value of Imports by Air = Surplus or Deficit Comparison of SFO and U.S. Air Exports by Value Source: US Census Bureau Foreign Trade Division, provided by WISERTrade. Dollars are in nominal value.

  24. Shipments by Bay Area Firms through SFO • Jobs – 103,144 • Labor Income (payroll) – nearly $9.9 Billion • Business Revenue – over $29 Billion Economic Value Top International Exports Top Domestic Shipments $8.64B $7.99B Chemicals 7% Machinery 8% Trans. Equip 4% Machinery 19% Computer & Electronics 67% Computer & Electronics 75% Elec. Equip. & Appliances 2% All Other 2% Textile / Mill Prod. 2% All Other 12% Leather & Allied Prod. 2% 24

  25. VI State & Local Tax Impacts

  26. State & Local Tax Revenues Generated by SFO 2012 SFO State & Local Tax Revenues $629M $9M $927M $942M $2.5B $220M 35.0% $323M 34.9% $1.2B 47.2% $6M 66.7% $633M 67.2% $603M 65.1% $409M 65.0% $1.32B 52.8% $309M 32.8% $3M 33.3%

  27. State & Local Taxes Generated On-Airport and from Visitor Spending Subtotal Direct: $1.01B Subtotal Indirect & Induced: $544M Total: $1.56B $ millions * Direct tax revenues from on-airport employees are based on place of residence

  28. VII Summary of Impacts

  29. SFO- Economic Engine for the Bay Area* • 288,000 jobs • $55.8 billion in business revenues, of which $19.6 billion is personal income • $68,000 average income per employee * direct, indirect and induced

  30. Many Roles of SFO Create an Economic Engine for the Bay Area and its Counties

  31. VIII Appendix

  32. Elements of Economic Impacts and Interrelationships

  33. Classification of Impacts • Direct (Initial Economic Activities) • Airport-based economic activities (airport terminal-related and tenants) • Off-airport businesses serving airport travelers • Off-airport businesses dependent on the airport for cargo movement • Indirect • Suppliers of goods and services to the airport and air-dependent business • Induced • Personal income spent by households in the Bay Area and re-circulated in the economy (earned by jobs in airport-based activities, visitor spending, air-dependent businesses, and suppliers of goods and services).

  34. Direct Visitor Spending Ripples Through the Bay Area • 125,000 jobs • $6 billion in labor income • $7 billion in additional indirect and induced output ($16 billion in total output) $9 billion of visitor spending in the Bay Area generated: * direct, indirect and induced 34

  35. Visitor Destinations Also Reach Beyond the Bay Area Common Visitor Destinations Outside the Bay Area 35

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