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What Is The Economic Value of Your Airport?

What Is The Economic Value of Your Airport?. Presentation to the Association of California Airports Annual Conference September 14, 2011 Presented by Doug Svensson, President Applied Development Economics Walnut Creek, California. Today’s Presentation. Why do an economic impact study?

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What Is The Economic Value of Your Airport?

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  1. What Is The Economic Value of Your Airport? Presentation to the Association of California Airports Annual ConferenceSeptember 14, 2011 Presented by Doug Svensson, President Applied Development Economics Walnut Creek, California

  2. Today’s Presentation Why do an economic impact study? What approaches can be used and how do we collect the data? What can the results tell us? How can we focus on the right questions for each airport?

  3. Introduction Purposes of Airport Economic Impact Studies Measure economic significance of airport for the region Justify airport investment/expansion Measure significance of airport for specific industries Formulate economic development/planning initiatives Supplement airport system plan Obtain financial support from municipal partners Determine allocation of matching funds

  4. Introduction Perception of Airport Impacts – the sectors that represent the obvious impacts Commercial passenger service General aviation Charters

  5. Introduction Airport Operations – big source of direct employment Flight crews Ground support Customer service Terminal personnel

  6. Introduction Other Airport Operations –extensive, even without passenger service Fixed-base operations Aircraft maintenance/repair Air traffic control Security Ground transportation Administration

  7. Introduction Other Airport Property Tenants – big impact that flies under the radar Retail and personal services Offices Visitor services recreation/sports (skydiving, golf, etc.) excursions charters lodging car rental

  8. Introduction Other Airport Property Tenants – big impact that flies under the radar Industrial parks Distribution Warehousing/customs Food processing Air courier services Military functions R&D

  9. Methodology ACRP Study – identified three main approaches Input-Output Analysis Collection of Benefits Catalytic Effects

  10. Methodology Input-Output Analysis captures the multiplier effects of the airport on the region–three categories of impact: Direct – Onsite business activity Indirect - Off-site business to business transactions Induced – Offsite employee spending

  11. Methodology Indirect Effects All businesses need suppliers in order to operate Airports and their tenants buy lots of stuff! Supplier relationships generate jobs throughout a region

  12. Methodology Induced Effects Jobs = income Income = spending Spending = more jobs created throughout the region

  13. Methodology Collection of Benefits – quantitative or qualitative measure of airport benefits Time saved Costs avoided Capacity improvements from reliever airports Stimulation of business Local fiscal benefits

  14. Methodology Catalytic Effects– spillover effects in terms of benefit to local economy Investment Trade Economic productivity and fiscal benefits

  15. Methodology Aviation Trends Subject to Study Growth in air freight Non-aviation commercial development co-located with airport Use of air transportation in supply chains and just-in-time delivery Reliance on aviation by specific industries such as R&D, biotech, banking, and universities

  16. Economic Impact Examples: California Air Transportation – The Multiplier Effect Every job in air transportation creates an additional 1.7 jobs 2010 air transportation jobs: 41,200 Total impact of airport operations also includes other industries

  17. Economic Impact Examples: Stockton Airport Identifying the Actual Impact Passenger carriers hadstopped service to Stockton (service has since resumed) Perception that airport was dead However, ADE study identified over 1,500 jobs on Stockton Airport grounds Process included individual business interviews and data research

  18. Economic Impact Examples: Stockton Airport Study Findings Jobs at airport site touched on a broad range of aviation and non-aviation businesses Multiplier effect: over 1,000 additional jobs supported throughout San Joaquin County Total wages: $96 million Total economic impact: $245 million

  19. Stockton Airport Regional Business Revenues and Wages

  20. Stockton Airport Employment Impacts

  21. Stockton Airport Airport vs. Tenant Impacts

  22. Handout: Quick Impact Calculator

  23. Conclusion Potential Pitfalls/Objections Cost of the study Collecting sufficient data Complexity of economic models Lack of standard methodologies Omission of offsetting impacts Need for periodic updates Difficulty of corroborating study results

  24. Conclusion Potential Benefits/Illumination Gaining the big picture perspective of an airport’s true impact Documenting the airport benefits to the community Broadening the airport’s benefits beyond its boundaries Linking the airport to economic development goals Defining an airport’s role as an important resource Focusing discussions about an airport by providing hard numbers

  25. Thank You! Discussion

  26. Methodology Developing Issues that Require Further Study Fractional ownership Globalization Emergence of very light jets

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