National Academies Press: OpenBook

The Role of U.S. Airports in the National Economy (2015)

Chapter: Chapter 8 - National Implications

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Page 47
Suggested Citation:"Chapter 8 - National Implications." National Academies of Sciences, Engineering, and Medicine. 2015. The Role of U.S. Airports in the National Economy. Washington, DC: The National Academies Press. doi: 10.17226/22146.
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Page 47
Page 48
Suggested Citation:"Chapter 8 - National Implications." National Academies of Sciences, Engineering, and Medicine. 2015. The Role of U.S. Airports in the National Economy. Washington, DC: The National Academies Press. doi: 10.17226/22146.
×
Page 48
Page 49
Suggested Citation:"Chapter 8 - National Implications." National Academies of Sciences, Engineering, and Medicine. 2015. The Role of U.S. Airports in the National Economy. Washington, DC: The National Academies Press. doi: 10.17226/22146.
×
Page 49

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47 C H A P T E R 8 The economic analyses examined in this research include the existing contributions of U.S. airports to the national economy and how that contribution could change given changes in airport connectivity, air cargo, and airfares. While the analyses of existing contributions and consumer surplus were conducted on a national scale, the two MFP analyses were limited to the sample of 20 MSAs. The combined economies of the MSAs represent about 23% of the national economy when comparing national GDP to the regional total. Stated differently, the national GDP is 4.3 times the combined GRPs of the 20 MSAs.35 The MFP analyses are extrapolated to the national level, which must be read with caution since the MFP only consid- ers 20 metropolitan regions and 11 aggregated sectors of the economy. The extrapolation is for illustrative purposes only to reflect an approximation. Given this uncertainty, low, medium, and high estimates are provided for the impact, where the medium represents the extrapolation of impacts for the 20 MSAs. The low and high estimates reflect 20% lower-bounds and 20% upper-bounds of the national factor of 4.3, creating expansion estimate ranges of 3.44 to 5.16. Table 28 shows the direct impacts and total impacts for each variable of the MFP connectivity analysis for jobs and value added (contribution to the national GDP), expanded to these national scales. As the significant impacts of each of the 11 variables affects different sectors of the economy, the rela- tionships among value added, jobs, labor income, and eco- nomic output vary. Impacts in the middle cohort presented in Table 28 range from 2,100 to almost 30,000 direct jobs, and from $305 million to almost $3 billion in value added. Total impacts, including direct and multiplier effects, range from 8,200 to 82,400 jobs, and from almost $700 million to more than $9 billion in value added. The national impacts of the interrelationship of air cargo with productivity are estimated using the same approach as the MFP connectivity presented, applying the 4.3 ratio of national GDP to the aggregate product of the 20 MSAs. Also, the -20% and +20% bounds were placed around this point to establish a range reflecting low and high estimates. Total national estimates from all analyses are presented in Tables 29 and 30. In addition to the existing contributions of U.S. air- ports to the national economy, the three impact estimates based on calculating and applying elasticities are driven by: • A 1% improvement in airport connectivity factors • A 1% increase in air cargo tonnage • A 1% airfare reduction for personal travelers In Table 29, the mid-range estimate of direct national pro- ductivity impacts given for a one-percent increase in air cargo is $742 million in value added, which will support 5,100 jobs. Total impacts, including multiplier effect, are estimated at $2.5 billion in value added and almost 23,000 jobs. Of course, changes in these assumptions will alter the esti- mates of impacts, both in the 20 MSA regions and in terms of nationwide estimates. Moreover, if connectivity decreases, air cargo operations lose efficiency. If airfares increase, impacts could be negative to the economy. Table 30 summarizes direct impacts of each analysis on the U.S. economy and Table 31 summarizes total impacts, including direct, indirect, and induced effects, based on 1% increases in MFP and air cargo tonnage, and a 1% decrease in the cost of airfares. To con- cisely present results of the 11 different connectivity factors that were analyzed for the MFP analyses, the tables refer to the mean impacts of the variables, although values from any of the variables may be substituted for the means (see Table 28). National Implications

48 Impacts based on 1% change in the variables below. Low Estimate Mid-Range Estimate High Estimate Jobs Value Added Jobs Value Added Jobs Value Added (a) Direct Effects Number of Airlines 4,500 $690 5,600 $862 6,700 $1,035 Domestic Nonstop Departures 10,600 $1,555 13,300 $1,944 16,000 $2,333 Airline Hubs Served-Domestic 9,900 $1,284 12,400 $1,605 14,900 $1,926 Domestic Nonstop Destinations 23,700 $2,355 29,600 $2,944 35,500 $3,532 Two or More Daily Nonstop Domestic Flights 13,800 $2,245 17,200 $2,806 20,600 $3,368 Five or More Daily Nonstop Domestic Flights 2,700 $409 3,400 $511 4,100 $613 International Nonstop Departures 6,600 $659 8,200 $824 9,800 $989 International Nonstop Destinations 22,000 $2,345 27,500 $2,931 33,000 $3,517 % of World GDP Served Nonstop 4,500 $233 5,600 $292 6,700 $350 % of the World GDP Served Daily 14,800 $1,243 18,500 $1,553 22,200 $1,864 % of the World GDP Served Two or More Daily 1,700 $244 2,100 $305 2,500 $366 Mean Direct Impacts of All Variables 10,400 $1,206 13,036 $1,507 15,600 $1,808 (b) Total Effects (Direct, Indirect, and Induced) Number of Airlines 25,800 $2,726 32,200 $3,407 38,600 $4,088 Domestic Nonstop Departures 34,000 $3,838 42,500 $4,797 51,000 $5,757 Airline Hubs Served-Domestic 26,100 $2,853 32,600 $3,566 39,100 $4,279 Domestic Nonstop Destinations 59,800 $5,753 74,700 $7,192 89,600 $8,630 Two or More Daily Nonstop Domestic Flights 65,900 $7,329 82,400 $9,161 98,900 $10,993 Five or More Daily Nonstop Domestic Flights 6,600 $759 8,200 $948 9,800 $1,138 International Nonstop Departures 15,100 $1,473 18,900 $1,841 22,700 $2,209 International Nonstop Destinations 60,100 $5,980 75,100 $7,475 90,100 $8,970 % of World GDP Served Nonstop 7,900 $536 9,900 $669 11,900 $803 % of the World GDP Served Daily 31,200 $2,770 39,000 $3,463 46,800 $4,155 % of the World GDP Served Two or More Daily 9,600 $999 12,000 $1,249 14,400 $1,498 Mean Direct Impacts of All Variables 31,100 3,183 38,864 3,979 46,600 $4,775 National impacts are provided for illustrative purposes and are approximations. Total impacts are the sum of direct, indirect, and induced effects. Dollars in Millions $2010. Calculations based on the MFP calculations for value added previously presented. National impacts based on GDP data from Bureau of Economic Analysis. Table 28. Potential national impact of MFP connectivity analysis.

49 Impacts based on 1% change in air cargo Low Estimate Mid-Range Estimate High Estimate Jobs Value Added Jobs Value Added Jobs Value Added Direct Effect 4,100 $594 5,100 $742 6,100 $891 Total Effect 18,200 $2,001 22,700 $2,502 27,200 $3,002 National impacts are provided for illustrative purposes and are approximations. Total impacts are the sum of direct, indirect, and induced effects. Dollars in Millions $2010. Calculations based on the MFP calculations for value added previously presented. National impacts based on GDP data from Bureau of Economic Analysis. Table 29. Interrelationship of U.S. productivity with a 1% increase in cargo tonnage. Activity Employment Labor Income Output Value Added Economic Impact of NPIAS Airports 2,172,200 $147,642 $637,002 $247,424 Changes in Economic Impacts Generated by 1% Improvement of Connectivity Variables 13,000 $795 $3,043 $1,507 1% Increase of Air Cargo Tonnage 5,100 $403 $2,103 $742 1% Decrease in Air Fares 1,400 $162 $553 $249 All dollars are in $2010 millions. Jobs are rounded to the nearest hundred. Table 30. Direct national economic role of U.S. airports to the national economy. Table 31. Total national economic role of U.S. airports to the national economy including direct, indirect, and induced effects. Activity Employment Labor Income Output Value Added Economic Impact of NPIAS Airports 7,628,900 $452,506 $1,597,458 $768,402 Changes in Economic Impacts Generated by: 1% Improvement of Connectivity Variables 38,900 $2,272 $7,417 $3,979 1% Increase of Air Cargo Tonnage 22,700 $1,377 $5,402 $2,502 1% Decrease in Air Fares 5,800 $385 $1,281 $657 All dollars are in $2010 millions. Jobs are rounded to the nearest hundred. National impacts for MFP analysis are approximations for illustrative purposes.

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TRB’s Airport Cooperative Research Program (ACRP) Report 132: The Role of U.S. Airports in the National Economy examines the economic role of U.S. airports and the national airport system to help communicate the national aggregate value of airports to communities and aviation stakeholders.

A PowerPoint presentation and brochure supplement the report. Appendices 1 through 5 of the contractor’s final report are available online and provide the related data associated with this research effort:

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