INTRODUCTION:
Rumack: Can you fly this plane, and land it?
Striker: Surely you can't be serious.
Rumack: I am serious... and don't call me Shirley.
DETAILS:
Economic impact analyses of airports are very popular. Venckus and Vaidas (2011) state the main reasons as to prevent an airport closing or relocation, to highlight the ramifications of service additions or cancellations, and to justify spatial expansion. [1]
Operations
There are two main IMPLAN Industries associated with airports. The first is Industry 414 - Air transportation. This Industry includes both passenger and cargo flights, even space travel. This Industry is the operations of the airlines and would be used for both current services and potential new services (like a new route being added). The second is Industry 420 - Scenic and sightseeing transportation and support activities for transportation. This Industry includes air traffic control, hangar rental, parking, and a few other associated services. Also keep in mind that not all employees working at the airport are employed by the airport. Transportation Security Administration employees are actually paid under the Federal Department of Homeland Security and would fall under Industry 546 - Employment and payroll of federal govt, non-military.
However, nothing is ever that cut and dry, right? Along with the operations of the facility and the air transportation itself, there are often many other businesses affiliated with or connected to airports. There are usually retail tenants on-site, and sometimes rental car companies, hotels, flight schools, and military installments. None of these activities would be captured in Industries 414 or 420 so their operations would need to be modeled in addition to the operations of the airport.
The airport you want to examine might even have a large business associated with it like the 1.2M square foot Boeing aircraft assembly plant in Charleston, SC. [2] Again, this would have to be modeled separately from the airport operations.
Construction
As always, capital improvements need to be analyzed separately from operations. While construction projects may span multiple years, their impact is temporary, unlike ongoing airport operations that happen every year. New construction at airports falls under Industry 56 - Construction of other new nonresidential structures; ongoing upkeep falls under Industry 60 -Maintenance and repair construction of nonresidential structures.
Visitors
It is a hard case to make that spending of visitors that flew into your region can be counted as part of the economic impact of the airport itself. If all visitor spending is included in an analysis, the assumption is that none of their spending would have occurred in the region but for the existence of the airport. If it weren’t for the airport, visitors would either travel via a different airport in the area, via a different means of transportation or not come at all. For individuals that would visit the region regardless of the airports existence, their spending impact on the region cannot be attributed to the airport. At the very least, a discount rate should be applied to the total visitor spending for air travelers into your region.
When analyzing a tourist event, you may want to include the cost that visitors had for their travel. IMPLAN recommends splitting airfare 50/50 between the origin city and destination city. Basically, half of the price of the ticket would be applied to your region of study. Note that dollars going to travel agents and corporate headquarters are included in the production function for Industry 414 so there is no need to model them separately.
Now, please put your tray table up, ensure your seat is in the upright and locked position, and fasten your seatbelt.
RELATED ARTICLES:
OTHER RESOURCES:
Federal Aviation Administration Data
South Carolina Aeronautics Commission Economic Impact Technical Report
SOURCES:
[1] Venckus, A., & Vaidas, G. (2011). A Few Remarks on Assessment of Airport’s Economic Impact. Economics & Management, 16, 437-440.
[2] South Carolina Aeronautics Commission. (2017). Economic Impact Technical Report. Retrieved January 2, 2020. Available: http://www.scaeronautics.com/download/2018_Economic_Impact_Technical_FinalReport.pdf.
Written January 7, 2020
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