Airport Economic Impact Methods and Models (2008)

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36 APPENDIX B Statistical Summary of Survey Results Survey Results and Analysis for S03-3 Survey for Users of Airport Economic Impact Studies (Airports and State/Regional Transportation Agencies) Wednesday, June 20, 2007 Powered by: Executive Summary This report contains a detailed statistical analysis of the results to the survey titled S03-3 Survey for Users of Airport Economic Impact Studies (Airports and State/Regional Transportation Agencies). The results analysis includes answers from all respondents who took the survey in the 35-day period from Thursday, May 3, 2007 to Wednesday, June 6, 2007. There were 58 completed responses to the survey received during this time. Survey Results and Analysis Survey: S03-3 Survey for Users of Airport Economic Impact Studies (Airports and State/Regional Transportation Agencies) Author: Joakim Karlsson, Hoyle, Tanner & Associates and RKG Associates Responses Received: 58 www.WebSurveyor.com

37 Response Count Percent Alabama 2 3.4 Alaska 1 1.7 Arizona 2 3.4 Arkansas 2 3.4 California 4 6.9 Colorado 1 1.7 Florida 4 6.9 Georgia 2 3.4 Idaho 2 3.4 Illinois 1 1.7 Iowa 1 1.7 Kansas 1 1.7 Kentucky 1 1.7 Maine 2 3.4 Maryland 1 1.7 Massachusetts 2 3.4 Michigan 2 3.4 Minnesota 1 1.7 Missouri 1 1.7 Nevada 1 1.7 New Hampshire 1 1.7 New York 2 3.4 North Dakota 1 1.7 Ohio 2 3.4 Oregon 2 3.4 Pennsylvania 1 1.7 Rhode Island 1 1.7 South Dakota 1 1.7 Tennessee 2 3.4 Texas 3 5.2 Virginia 1 1.7 Wisconsin 6 10.3 Wyoming 1 1.7 1) Please indicate the state in which your airport(s) or the airport you studied is located?

38 2) Please indicate the number of years of experience that you have in the aviation industry: No. of Respondents Year of Experience Percentage 11 0–9 19.0 18 10–19 31.0 13 20–29 22.4 13 30–39 22.4 3 40–49 5.2 Mean = 21.19, Min. = 3.00, Max. = 41, Median = 20.00 3) Please indicate the nature of your current involvement with the airport(s) or airport system: No. of Respondents Current Involvement Percentage 6 Local Government 10.3 12 State Government 20.7 0 Federal Government 0.0 8 Airport Commission/Authority 13.8 27 Airport Management 46.6 1 Consultant 1.7 4 Other 6.9 Other: Port district (both maritime and aviation) Market Development Coordinator Airport Manager and Local Government Town of Erwin Industrial Development Agency Chair Transportation Committee for Real Estate Trade Group 4) How familiar are you with airport economic impact studies? No. of Respondents Familiarity with Economic Impact Studies Percentage 1 Not Familiar 1.70 8 Somewhat Familiar 13.80 30 Familiar 51.7 19 Very Familiar 32.8 5) How many airport economic impact studies have you been involved with (completed, sponsored, supervised, reviewed, etc.) over the past 10 years? No. of Respondents No. of Economic Impact Studies Percentage 2 None 3.4 49 5 or Less 84.5 6 6 to 10 10.3 0 11 to 20 0.0 1 More than 20 1.7 6) Please indicate the intended audience(s) of the studies you have been involved with (select all that apply): No. of Respondents Intended Audiences Percentage 51 Government Agency 87.9 45 Citizens/Residents 77.6 31 Planning Agency 53.4 15 Fixed Base Operator 25.9 39 Airport Management 67.2 12 Other 20.7 Other Responses: • Elected officials, carriers/tenants, internal staff • Local, state, and federal elected officials • Any organization that has an interest in the Airport System • Federal, state, and local elected representatives • Business community

39 • Business and industry • Business community • Local municipalities • The studies were typically prepared for an airport authority or state department of transportation. However, those agencies commissioned the studies to inform a much broader set of stakeholders • Local communities • Airline management, elected officials • Legislative, to help promote airport FBO, to help promote airport management • Economic Development Commission/chamber of commerce • Political body 7) Please indicate the reason(s) airport economic impact studies were initiated (select all that apply): No. of Respondents Reasons for Economic Impact Studies Percentage 39 To justify airport investment/expansion 67.2 2 To determine allocation of matching funds 3.4 25 To formulate economic development/planning initiative 43.1 3 It was an academic initiative 5.2 25 To supplement the airport system plan 43.1 26 To measure significance of airport to specific industries 44.8 17 To obtain financial support from other municipalities or from county/region level 29.3 54 To measure significance of the airport(s) to the local community. 93.1 8 Other 13.8 Other Responses: • Use with elected bodies: city council, state legislature; educate stakeholders about the importance of the Port • To attract private, state, and federal investment in the airport • To justify noise issues • One primary purpose of the study was to measure the significance of the airports to the state, region, municipalities, and local communities. It may also be used for several other items listed above. • Ownership feasibility • The State Aeronautics Commission conducts the study every five years. • To measure significance of the airports to the state and to the region. • Community and public relations, marketing • Reasons for initiating studies varied with the study, but generally there was a desire to develop political support for aviation programs or airport expansion. • To gain an understanding of who/what firms constituted the airportÕs business constituents 8) Please indicate the variables measured or estimated in the airport economic impact studies in which you have been involved (select all that apply): No. of Respondents Variables Measured Percentage 54 Wages 93.1 56 Employment 96.6 32 Cargo/Tonnage 52.2 37 Tourism 63.8 36 Air Traffic Levels 62.1 14 Time Savings 24.1 46 Local/Regional Spending 79.3 14 Military/Emergency Services 24.1 13 Other 22.4 Other Responses: • General aviation system airport impacts • Taxes, revenues, spending, sales, transportation, and shipping benefits to local businesses • Local and state taxes generated by airport

40 • Non-quantitative items such as air ambulance, parts delivery, etc. Also property taxes paid on aircraft and used by local government • Airport construction, aerial applicators • Taxes paid by business/industry and employees and employee commuting distances • Educational requirements for entry-level jobs • Tax impact • Air passenger volumes, cruise passenger volumes, bridge traffic volumes • Payroll; total annual economic activity • The specific metrics used in each study varied with the study but generally included some measure of payroll and airport spending, as well as visitor spending. • Investment impact • Economic growth of the area/region • Aviation-related industry—off airport, airport related construction, business sales directly related to air travel, indirect impacts on the economy, qualitative benefits • Multiplier affects of additional rounds of spending 9) Please rank the usefulness of the methodologies that were used in the airport economic impact studies. No. of Rank the Usefulness Methodology Respondents of the Economic PercentageImpact Studies Economic input–output 24 Extremely Useful 41.4 model [e.g., direct, 23 Very Useful 39.7 indirect, induced 7 Useful 12.1 multiplier, or Regional 2 Not Very Useful 3.4 Input–Output Modeling 1 Not Used in Study 1.7 System (RIMS)] 1 Not Applicable 1.7 Qualitative survey (survey 13 Extremely Useful 22.4 of airport users, 19 Very Useful 32.8 passengers, etc.) 15 Useful 25.9 2 Not Very Useful 3.4 3 Not Used in Study 5.2 6 Not Applicable 10.3 Community benefits 20 Extremely Useful 34.5 18 Very Useful 31.0 11 Useful 19.0 2 Not Very Useful 3.4 2 Not Used in Study 3.4 5 Not Applicable 8.6 What-if analyses 7 Extremely Useful 12.1 5 Very Useful 8.6 14 Useful 24.1 3 Not Very Useful 5.2 11 Not Used in Study 19.0 18 Not Applicable 31.0 Comment Responses: • Community benefits and what-ifs were not methodologies, but outcomes of using the economic impact model. • The audience’s degree of understanding of the use of RIMS significantly impacted the acceptance of the final result of the project. • What-if analyses would be useful if possible to demonstrate to the general public the role of aviation. • RIMS method is the most authoritative. • This is not really a meaningful question. Useful to whom? Obviously the value of the results of any particular methodology depends on how it is applied. The above answers reflect my opinion of the relative value of the various methodologies. • RIMS is not a good model for aviation data. Tried to integrate airport study into MEDOT study. MEDOT study excluded aviation study due to limitations of the RIMS model.

41 10) Did the airport economic impact study(ies) attempt to capture any of the following trends in aviation (select all that apply)? No. of Respondents Variables Measured Percentage 18 Growth of air freight 31.0 6 Development of international gateways 10.3 Non-aviation commercial 29 development attracted to the 50.0 vicinity of the airport 19 Use of air transportation in supply chains and just-in-time delivery 32.8 Reliance on aviation by specific 24 industries, such as R&D, biotech, 41.4 banking, universities, etc. Growth in business 14 aviation/emergence of fractional 24.1 ownership 2 Consolidation and globalization 3.4 7 Emergence of very light jets 12.1 15 None of the above 25.9 5 Other (please specify) 8.6 Other Responses: • Port-owned commercial land not immediately adjacent to the airfield was measured in our Port industrial park economic impact analysis. • Impact of construction resulting from improvements and expansion • Funding was a determining factor for the most recent study and, as such, we missed several of the above mentioned trends. • Look at the web pages for Falcon Field Airport, Mesa, Arizona • The studies were generally static views of the economic impact of the system at the time they were performed and as such did not really address trends. • Importance of the hub airport in retaining regional business and assisting growth of regional business • Low-cost carriers 11) How would you rate the airport economic impact studies that you have been involved with in terms of the validity of the results and the methodology? No. of Respondents Rate Validity Percentage 1 Not Valid 1.7 8 Somewhat Valid 13.8 34 Valid 58.6 15 Very Valid 25.9 Comment Responses: • Let’s be honest, there is some “art” to conducting these things. • It has not been possible to accurately measure impacts since construction, which began right after the study was complete. • Study is in process. • Most studies confuse costs and benefits. For example, payroll is a cost not a benefit of aviation. Most studies fail to address the concept of consumer surplus. • Confidence in products varies widely. Many studies take a very broad view as to what constitutes an airport impact. For instance, Corporation XYZ uses the airport extensively; therefore, all of XYZ’s income is consigned as an airport-related economic. • Somewhat difficult to get airport managers to assist in the data collection. • Would be more valid with better airport business participation. 12) How would you rate the studies in terms of its impact and utility (i.e., how successful was it in meeting its objectives)? No. of Respondents Rate Utility Percentage 1 Not Useful 1.70 10 Somewhat Useful 17.2 22 Useful 37.9 25 Very Useful 43.1

42 Comment Responses: • Would be more valid with better airport business participation. • It was very useful as a PR piece and satisfied all who asked • In progress, but early results are encouraging • There was some resistance to the document, describing it as propaganda • It depends who you ask. The study sponsors presumably felt that their objectives were met—the studies resulted in a large number. Thoughtful critics find the number meaningless, and thus the studies not useful as a basis for planning or policy. • In-terminal passenger questionnaires were invaluable. The demographic profiles proved very insightful. • Would be more valid with better airport business participation. 13) What methods were used to disseminate the results (select all that apply)? No. of Respondents Methods Used to Disseminate Results Percentage 36 Technical Reports 62.1 50 Summary of Executive Reports 86.2 40 Brochures for Public Distribution 69.0 43 Presentations 74.1 25 Web-Based Products 43.1 6 Video 10.3 7 Other 12.1 Other Responses: • Press releases, annual report • Community speeches/handouts • Press conference, speakers bureau, direct mail campaign • Distributed to individual airports as well • News release • Seminar • The dissemination methods varied with the study. All the ones I have reviewed had a technical report. One study was published on CD-ROM. • News release • Hall of Flags—Distribute to legislators 14) If presentations were used to disseminate the results, please indicate type(s) of audience. Port Commission monthly public meeting Government and elected officials, civic organizations and clubs, chamber of commerce, tourism boards, travel clubs, airlines, academic settings, industry groups News media, community and business organizations such as chamber of commerce, convention/visitors bureau, Rotary, Kiwanis, National Association of University Women, business and professional women’s clubs, etc. Not used Airport commissioners, elected leaders, chamber of commerce, congressional delegation Community at large Management, board members, state and city leaders, etc. Elected officials, economic development agencies, citizen/civic groups Board members, management City/county government officials, civic groups, University of Georgia Chambers of commerce, neighborhood associations, economic development commissions, local and state governments Chambers of commerce, business organizations, public presentations as part of a planning process, public airport board meetings Aviation board members, members of the public present at public meetings Airport users/citizens Government, residents, community service groups, and community leaders

43 Local government and civic organizations Airport operators Government officials, business leaders, convention and tourism executives Governing board of targeted owner, Town of Erwin Industrial Development Agency County airport commission county supervisors Rotary club meetings, city council meetings, airport board presentation Civic groups and governing bodies Civic clubs Seminar will be a mix of lift providers, freight forwarders, academics, and politicians Mayor/council, airport board conference attendees, council of governments, chamber of commerce Business community; branches of state government Chambers of commerce, convention and visitors bureau, governmental agencies Airport authority members, local and state elected officials, economic development officials, convention and visitor bureau officials, hotel industry, travel agents Chambers, Rotaries, local governments, and media Community groups tenants business and industry governmental entities Local community organizations, members of state legislature, economic development agencies Chambers of commerce, both local and regional Local assembly and airport users The airport’s mid- and upper-management, aviation committee of the full board of commissioners, local noise abatement meetings, as part of all speaking engagements and within content of all airport collateral materials Chambers of commerce, governmental bodies Airport management Local government, airport commission Public hearings that targeted nearby property owners because of expansion Presumably presentations were made to the study sponsor. The results of some studies were presented at professional meetings. I am not aware what other presentations may have been made. You would need to obtain this information from study sponsors or those performing the studies. PowerPoint presentation to stakeholders Results were included in speeches and PowerPoint presentations to a wide variety of audiences ranging from legislators, to aviation industry representatives, to chambers of commerce, to the general public. Board citizen groups Business and civic groups, elected officials—city and state, and economic development groups Three principal audiences: (1) elected officials; (2) metropolitan/regional planning organizations; (3) business/chamber of commerce organizations including trade organizations Economic development councils of Maine, airport meetings, state planning organizations City council, community organization, chamber of commerce Local officials, citizen’s groups, MPOs and Portland Development Committees, aviation board meeting attendees Political

44 15) Was there any follow-up done to the studies in terms of ongoing assessment or validation? No. of Respondents Follow up Percentage 15 Yes 25.9 43 No 74.1 Comment Responses: • Started baseline survey in late 1980s and update every 3 years • Actually done by UNLV Center for Business and Economic Research • An original study was conducted in 1998. It was updated in 2001 and 2006. • Not yet • Informal, based on traffic and usage • Study was recent and no follow-up has been done yet. • EIS is underway and we have not budgeted for a follow up assessment. • We are expecting to conduct another Economic Impact Study within the next two years. • Not that I am aware of—the state agency might have an ongoing assessment. • On-going; no results yet • Leading economic impact numbers are updated on an annual basis for 2 years after completion of new comprehensive economic study initiative. • Not that I am aware of. • Nothing formal, but we determined it very successful as we heard people quoting the economic impact numbers. We will be doing a follow-up economic impact this year; last one was done in 2000. • Follow-up varied widely and usually was dependent on funding or budgeting process. • Just completed in early 2007 16) In your opinion, how often are the results of airport economic impact studies used as a factor in encouraging substantive change (encourage airport investment, change airport policy, suggest land use regulatory changes, etc.)? No. of Respondents Results Used as a Factor in Encouraging Change Percentage 1 Never 1.7 30 Sometimes 51.7 23 Frequently 39.7 4 Always 6.9 Comment Responses: • Always in terms of encouraging substantive public and private investment in airport and economic incentives for potential airport customers • Like to have answered almost never • If the community views the study as valid, they will use the data; otherwise, they will put the study on the shelf. • We as a government agency use the data frequently. The current report itself is dated and has lost much of its impact. • This is typically why they are performed. However, how effective they are at meeting this goal is another question. • Our state-wide aviation economic impact study is very effective in broadly educating decision makers. When used in an individual airport situation they have also proven to be effective. 17) In your opinion, what are the top three benefits of airport economic impact studies? Showing the link between our facilities and the community we serve Providing financial justification for airport To quantify and know the airport’s impact Informing public policy debate Establishing snapshot of airport fiscal capability To convince and make aware to stakeholders the significance of its impact as an economic engine to the community/region Allowing for what-if analyses for future project and capital investments Marketing tool To convey to community the need to protect this valuable resource; to justify continued investment, expansion, growth for future benefits

45 Affirms the positive return on investment for airport funding Satisfy community requests Know what is really happening on your airport Airport acceptance Understanding the economic impact to the community Community support of airport development Public awareness of the benefits of airports Provides an end dollar amount that people can relate to Improved elected official support Setting goals Justification for investment in an airport Value and importance of the airport to the local community It shows the value of air service Public awareness Quantifying the level of economic impact Validation of airport benefits to the community Bringing awareness of the airport’s benefit to the community Airport justification to the community. Makes case for additional public/private funding Satisfy local development agencies Tell others what is really happening To combat crazy politics Understanding the economic impact to the local governments; i.e., taxes received Public relations Tool to evaluate and substantiate investment and development Communities feel that they are important Increased airport appreciation Planning To quantify its impact on the community Economic development tool for local chambers and community Enhances the image of the airport with citizens Tool for garnering support for elected officials for program implementation Providing statistical data that can be used to support any number of initiatives Documentation of aviation- related business impact Protection of the airport from incompatible land uses Encouraging local government investment in the airport Gives politicians firm reasons for legislative changes that enhance the airport’s position Satisfy local government requests Justify the existence of airport To support future investment Understanding the economic benefits from commercial airline service to the community and businesses User relations Other public affairs Larger airports can obtain more funding Increased investment in airport Education tool Where additional or less emphasis needs to be placed when awarding grants for community improvement program projects Enhances the image of the airport with developers Key analysis for both aviation-related and non- aviation-related collateral development surrounding the airport Validity of economic impacts and benefits of the airport to the local and state economy by someone outside of the local airport Documentation of non- aviation business located on the airport As a tool to help leverage additional money for airport needs

46 Influence investment in airport infrastructure Illustrates to airport neighbors how many jobs exist because of the presence of the airport Justifies capital investment Relating airport value to the communities Support expenditures Independent assessment of the role of airports in dollars Communicate the value of public investment in airport Economic benefits Educating the general public Snapshot of airport economic impact Aids a state to focus their scarce resources in airport system development Public education Airport system planning Validates the importance of the airport to the community and surrounding region Measuring airport’s benefit to local economy Measure the direct impact of airport on community Community education Reminds/informs public and elected officials of the broader value of airports beyond just transportation Finding funds Community support Gauge strength of airport/aviation on community or regional economy Protect existence of airport facilities Illustrates to government officials the jobs and revenue created by the airport Justifies public ownership Justification of capital improvements at airport Support value to community Garners support for ongoing investment Document the value of private investment in airport business Jobs Informational tool for community Airport sponsor can prioritize capital improvement projects and fund the most important ones Public relations Economic analysis Confirms the airport plays a vital role in the continued expansion of the metropolitan and regional economy Helps with requesting funding (lobbying) Display impact of capital investments and tax impact on community Level of impact Provides additional avenue of communication with tenants and customers Qualifying funding request Community support Gauge employment generated by airport/aviation Educating public of quantifiable and non- quantifiable value of aviation Makes the case for continued investment to modernize and/or expand facilities Use as a planning tool Specify commerce supported by aviation Helps general public see what aviation does Gain public support for airport operations and development Growth and facilities development and planning Potential use to justify investment Aide communities to understand and thus support their airports Justifying capital expenditures Transportation system planning Draws positive attention to the airport and aviation industry for Fargo and the surrounding region Importance of aviation as an economic engine Validates or revalidates worth of the enterprise for employees General knowledge Community support Gauge impact of related and support industries within industries of tourism and trade

47 Learn the economic impact of your airport(s) Airport’s economic contribution to the community Provides information about the benefit of the airport to the community Show community what is at the airport Use The value of any given study is so dependent on its scope, how it is performed, and how the results are used that it is not meaningful to speak of the top three benefits in general terms. Proves the often under- appreciated worth of the local airport It’s an economic multiplier Build community support for airport activities Identify what the airport contributes to the local economy Highlights the importance of airports—statewide education for local and state decision makers Informing elected officials Local, regional, and state support of airport Importance of airport in community Gives community a sense of the role of their airport in their community Show value Learn about reasons for businesses’ use of airports Impact of jobs Help lobby local government for more/sustained funding levels Revenue Ideally, economic impact studies would identify how planning decisions or policy changes could influence the economic contribution of aviation and airports. However, due to the methodology used, they can rarely do this. As a “joint-use” facility the EIS may help should Base Realignment and Closure target the facility. Job, wages, and income sustenance Build legislative support for airport activities Identify where community is going economically Details the benefits— quantitative and qualitative— of an airport in a community Grasping the significance of air travel to the business community Provide material for specific airport marketing campaigns Dealing with neighboring communities Allows for development of performance measures Show trends Demonstrate to the community the economic benefits of its airport(s) Shows trends in airport growth if the study is completed every two to three years Benefits Useful in demonstrating the business climate at the airport and in the community. It shows how the airport supports economic growth Track changes in economic impacts over time Depending on the veracity of the data it can be valuable in benefit/cost analyses Maine DOT acceptance of airport projects as pricing in a highway system Elected officials Provides tools for decision makers with regard to qualitative results Illustrates airport users other than aviation companies

48 18) What are the top three constraints or disadvantages of airport economic impact studies? Can be viewed as self- serving or inflated Lack of participation by airport tenants No one single method used by all airports— standardization among airports would make comparisons easier Time-consuming to conduct thoroughly They are generally either too specific or too generic Willingness of participants to tell the whole truth No standard format leaves reports open for challenge Education needed to explain results Assumptions can be challenged No realized benefit for smaller airports They’re becoming overdone/overused Misinformation Funding the study Outdated data by the time of production Non-standard—Comparing different airports difficult Dependence on results can create a lighting rod for community opposition to growth of an airport Methodology used in current study did not project growth factors Data intensive Multipliers often discounted Getting tenants to reveal financial data or them not wanting them used except in aggregate form Difficulty getting all airport business partners to respond with accurate data in a timely manner They are quite expensive in terms of time and money Willingness of participants to take the time to give good information Frequency of updating needed Snapshot Output is money driven . . . no other benefits can be evaluated; i.e., airport geographic location, emergency services Lack of resources to perform study Finding qualified agencies to conduct the study Results tend to be conservative and/or overinflated at times Difficult to breakout specifics from aggregated numbers The results need to be developed in manner in which people can identify. Simply indicating that a project or airport development can lead to 100 million or 1 billion dollars in economic impact is beyond the comprehension of most people. Numbers age rapidly Finding the right contact with authority to release the information/labor and time intensive/constant changes in organizations and proce- dures and record keeping Too small a sample Time required of sponsor to disseminate results Effort to prepare a quality study Transportation infrastructure is equated to a dollar amount for its own benefit? Realizing there are some exceptions, are roads and bridges evaluated for their economic value? Dissemination Difficult to explain the modeling and methodology used, to public groups It should be developed in terms of what is this one flight worth. What industries does this flight affect both direct and indirect. How does this construction project create direct and indirect benefits?

49 Technicality of information makes it subject to criticism The results might not be as good as you think Lack of understanding and acceptance by the non-aviation public Not all use the same base model, so it is difficult to compare Induced impact tough to substantiate with actual data They tend to use multipliers etc., to determine indirect benefits to community Explaining the concept to the public Aviation activity is hard to measure Only a snapshot of a complex, changing operation NIMBY still highest consideration so studies ineffective Induced impact is not widely accepted Methodology sometimes not understood Validity of the study Reliability of input information Timeliness of information The timeliness of collecting the data Usually not conducted annually Difficult to explain to multiplier effects Always subject to the criticism that it is self- serving Cost The information is outdated even before it reaches my desk The model we have used has been difficult to apply on a statewide basis Number of assumptions not well-grounded in fact They are hard to relate to non-users/taxpayers in community Making it sound believable since the numbers are so large Impact of aviation can only be truly seen if you paint a picture for citizens of what a community would be like without the local airport Without 90% participation from businesses/organizations, results may not be as meaningful Industry information is limited False information provided by airport tenants Other factors determine investments Cost prohibitive for communities to conduct these needed studies Limitations of the model used Overuse and overreliance on the data The difficulty in obtaining data from stakeholders Quality control of the data Generally shows economic value at a point in time; not readily dynamic. Finding qualified consultant to do the study Indirect impacts tough to accurately estimate Use of old methodology to compile data Making it real when comparing with parks, streets, water/sewer, etc. It is easy to not be realistic with the numbers and over inflate them to the point people do not believe you An outside agency should compile/complete the survey for objectivity Industry cooperation particularly air cargo is limited Continuity of reports from previous years Cost of studies, if not used to implement policy Insufficient survey return rate—small sample sizes Quality of assumptions used General resistance to the data Believability Some risk to interviewing tenants and customers. Not all are equally eager to share confidential information.

50 Time consuming Keeping information current True validity of all information provided by industry partners Expensive to conduct Narrow scope Sometimes the manner in which a report is written may not be user-friendly Members of the public question its validity The principal problem with most economic impact studies is that the methodology used is fundamentally flawed and the results are meaningless. What else is there to say? The EIS needs to be updated often Insufficient updates Formulas tend to be questionable, with impacts likely overstated Getting people to understand the multiplier impact Validity is questioned on those done by a paid consultant Validity/rigor of data, accuracy uncertain One generally accepted economic modeling so one study is relevant to another study Participation of on-airport businesses Limited by modeling. It is difficult to capture non-aviation value Cost No local linkage or specific examples Government agencies unwillingness to cooperate or fully cooperate in divulging information Can be targets for community criticism Takes only wages and jobs into account Sometimes the information is hard to grasp You are hopeful that the information you received from your fixed-base operators and survey takers is correct and factual The multiplier is often difficult to explain Budget constraint Costly to conduct Changing people’s views when they do not support airport expansion May highlight that some smaller airports have very little economic impact Qualifications of firms performing the studies General aviation data are inherently difficult to obtain Adequacy of data Secondary impacts difficult to qualify General aviation (non-business related) may appear as not contributing a fair share Output less useful without a frame of reference Some multipliers or factors are one size fits all in an industry that is very diverse . . . Not all domestic routes provide similar impact . . . or evaluate impact of flight from Bahamas vs. Tokyo. Shelf life can be short, because airports are constantly changing Did not study impact of airline ticket sales Trying to get the information out to the local media and having them understand it correctly Some people, or groups, consider an EIS as fiction No universal methodologies for measuring impacts Hard to quantify economic development benefits of an airport Failing to integrate the study into some broader program objective or economic growth policy Follow-up funding from FAA for marketing studies Distribution of results May be misinterpreted by audience In-direct benefit multipliers are not always believable

Choose methodology that is defensible rather than just using the one that produces the biggest numbers Annual updates Standardization in the industry In every airport lease, operating permit, contract, vendor agreement, and so forth include a stipulation that the business must fully and accurately complete the economic impact survey and return it by the deadline whenever the survey is conducted. I don’t think there is such a thing. Reliability is subjective and applicability is time sensitive. To do one just to do one is likely wasteful and to do one without answering the original need for sure is wasteful. Validate/cross check the employment and spending data Use local established authorities Establish standard criteria Choose a standard method to calculate indirect and induced benefits to aid comparing one facility with another. Have a detailed understanding of assumptions and methodology used Write them in laymen’s terms Summaries need to be written for the audience, not for economists Use a reputable agency to conduct the study in order to get factual information that the public will trust. The use of a realistic baseline as a starting point and an ability to somehow get the results in a quicker manner so that a majority of the data is not completely outdated by the time the project is completed. Standardization A post-study follow-up to validate the results to the extent possible Forecasting for economic impact of possible improvements to provide return on investment data Involvement from a large diverse group Allow for easy end user updating A standard methodology for key study components that would allow apples-to- apples comparison among airports Analysis of actual performance compared with previous studies would produce trending data and a way to predict accuracy. More time should be given to airport users to research the value of the airport. Especially industries that typically don’t take enough time to fully evaluate the airport’s role in their business; i.e., more time should be given to those being surveyed in order to receive more accurate data for use in compiling the surveys. Be sure to make the results easy to compare with other economic impact studies. The economic impact of the new plant with 100 jobs is easy to understand. The airport that has 100 based aircraft has impact but it does not compare favorably on paper with the new plant. Multipliers need to be explained carefully and the concept proved without a shadow of doubt. I think a truly great study would be to portray to people what items would not be in their local stores, delivered to their home, delivered by service industries (technical and professional), except for the fact that their local airport exists and/or the nearby regional airport exists. Well-drafted questionnaire Airports are inter-connected. Airplane takes off from one place goes to another. As a result, a clearing house of impact studies from all airports open for review would help to see how others are responding. 51 19) What one thing would you suggest to improve the reliability or applicability of future airport economic impact studies?

52 Consistent and accurate data that stands up over the years and continuity of reports form previous to current years. Timing the study to be able to use the most up-to-date socioeconomic data available from reliable sources (County Fact Book, Woods & Poole, etc.). Consultant needs to go into the community and meet face-to-face with airport stakeholders. Solicit their support and empower them to help gather needed data. Talk to chambers of commerce, city hall, Rotary, etc. E-mails/letters cannot convince the value of these studies. It takes one-on-one time. Careful and thorough gathering of information Continual updating of the data and documenting the trends established by the data. Forecasting is an important facet in the establishment of goals and objectives but we must be able to support estimates with validated data. Make certain the people collecting the data from stakeholders understand what an economic impact study is and what it can be used for each agency that is solicited to participate. Make them understand what their role is in providing data and provide them ideas for what they can do with the data within their respective industry—such as car rental agencies, hotels, fixed-base operators, federal agencies, etc. Use a university that has a significant amount of reliability in the community. Include your tax impact—especially if you are a non-profit authority To have the supporting data available for public view Find a good way to crosswalk assumptions, methodologies, and results with those of prior studies, especially studies conducted by other entities. The public hears a lot of numbers and doesn’t usually understand why the numbers appear to be contradictory or inconsistent at times. Only compare airports that are operated under the same circumstances. Web-based tool for real-time information Greater assurance and measures that capture all business partners involved in the airport’s periphery and business Continue to improve economic modeling methods (e.g., input–output models), because economic impact studies are only as valid as the models used to produce them. Some sort of uniform process/procedure to apply to basic data collection and reporting. An airport may choose to add to this basic information but at least this would allow a person to compare basic numbers from one airport to another. Do them at set intervals, so the information is always up to date. Describe the methodology in the preparation of the report in layman’s terms. Updates every two and no later than three years Develop and use a theoretically sound methodology Update frequently and explain the multiplier Obtain region-specific input–output model not a derivative of a national model Development of standards all vendors can use to measure airport impacts Economic impact studies need to be presented in a format that is believable, readable, and understandable. Weave the study into more broad policy or strategy development. Database to be able to continuously update the information Get airport business buy-in Better quantitative data Amplify the direct impact separate from direct costs

53 20) Please use this space to provide any additional comments regarding airport economic impact studies. Of the 6 comprehensive economic impact studies I’ve coordinated for Louisville International Airport and Bowman Field, it has become increasingly difficult each time to identify the appropriate contact within each organization who can provide accurate and timely data and a significant decrease in businesses’ willingness to share basic employment, payroll, business expenditures, capital investments, and taxes generated/paid for the database There are many fine companies out there very capable of doing these studies. A problem exists when a study is done to the satisfaction of the client airport and questionable practices are used in modeling and applying multipliers. Every region is different and variables change . . . when you’ve seen one airport you’ve seen . . . one airport. To use the report, one must be able to believe in the results, and be able to explain to the target audience why they are true and have the actual impact that is stated. Often people distrust the information or believe it to be blown up out of proportion Great tool . . . Not applicable to airports for many airports Try to update them on a regular basis While I believe they are a valuable tool to understand the potential benefits or potential loss of not doing a project, they must be specific enough to be able to point at some of the findings/recommendations as tangible information. A very useful and informative tool! Expansion of contents would improve the applicability of its use. I believe they are, overall, a very valuable tool in justifying the existence of an airport to a community in general. Although some of the indirect benefit is determined by the use of multipliers etc., it is perhaps the only way to put a dollar value on what the airport means to a community. 100% participation in the questionnaire should be a goal. A combination of on site interviews and telephone interviews will supplement a mailing. Study is only as good as data source(s) allow. User surveys, socioeconomic information, etc., must be current and reliable in order for buy-in to estimated results of airport economic benefit/impact. It is a useful tool if the results are robust. Economic impact studies are essential to system wide planning and justification for expenditures. They are, however, only a part of the larger process. The data collected and the presentation of that data must be rock solid and presented in a manner that reaches a very wide audience. They are great tools that must be updated every 4 or 5 years. Economic impact studies have been the most useful document we produce in terms of being effective in promoting change; very popular with airport operators. Our study involved additional facilities beyond just airports. It was agency-wide. (The results were reported by facility, however.) Although they are costly to conduct, I would recommend an airport conduct an economic impact study to demonstrate to the community the important roles it serves and the economic benefits it has on the community. The studies have always helped me with promotion of the airport, but I always get questions on their validity. As airport manager, I try to address those questions to the best of my ability but it is hard because I only supply the information, I don’t make the report. Very helpful tool for future development

54 There is a pressing need to recognize that the methodology currently used in most studies fails to address the real issues that need to be considered and confuses costs and benefits. As a result, most studies have little value from a planning or policy perspective. Hopefully, the ACRP project will initiate a process to establish a theoretically sound methodology and standard of practice. Be careful with multipliers—Too large could result in lack of community acceptance Virginia is in the process of scoping an update of the State System Economic Impact Study. We are in the process of developing performance measures that will be incorporated into multi-modal planning efforts.

55 Survey Results and Analysis for S03-3 Survey for Authors of Airport Economic Impact Studies (Airports and State/Regional Transportation Agencies) Monday, June 25, 2007 Powered by: Executive Summary This report contains a detailed statistical analysis of the results to the survey titled S03-3 Survey for Authors of Airport Economic Impact Studies (Airports and State/Regional Transportation Agencies). The results analysis includes answers from all respondents who took the survey in the 19-day period from Friday, May 4, 2007 to Tuesday, May 24, 2007. Eleven of the 12 completed responses were received to the survey during this time and one survey was ended at question nine and thus the results of that survey were not used. Survey Results and Analysis Survey: S03-3 Survey for Authors of Airport Economic Impact Studies (Airports and State/Regional Transportation Agencies) Author: Joakim Karlsson, Hoyle, Tanner & Associates and RKG Associates Responses Received: 11 www.WebSurveyor.com

56 1) Please indicate the state in which your airport(s) or the airport you studied is located? Response Count Percent Arizona 1 9.1 Georgia 1 9.1 Kansas 1 9.1 Massachusetts 1 9.1 Minnesota 2 18.2 North Dakota 1 9.1 Pennsylvania 1 9.1 Washington 1 9.1 Other 2 18.2 Other Responses: • One model was for all states • Have conducted studies across the U.S. and consultant 2) Please indicate the number of years of experience that you have in the aviation industry: No. of Respondents Years of Experience Percentage 4 0–9 36.4 2 10–19 18.2 4 20–29 36.4 1 30–39 9.1 Mean = 15.64, Min. = 0.00, Max. = 33, Median = 19.00 3) How familiar are you with airport economic impact studies? No. of Respondents Familiarity with Economic Impact Studies Percentage 0 Not Familiar 0.00 1 Somewhat Familiar 9.10 4 Familiar 36.4 6 Very Familiar 54.5 4) How many airport economic impact studies have you been involved with (completed, sponsored, supervised, reviewed, etc.) over the past 10 years? No. of Respondents No. of Economic ImpactStudies Percentage 0 None 0.00 8 5 or Less 72.7 0 6 to 10 0.00 0 11 to 20 0.00 3 More than 20 27.3 5) Please indicate the intended audience(s) of the studies you have been involved with (select all that apply): No. of Respondents Intended Audiences Percentage 11 Government Agency 100.0 10 Citizens/Residents 90.9 5 Planning Agency 45.5 5 Fixed Base Operator 45.5 11 Airport Management 100.0 2 Other 18.2

57 Other Responses: • Economic development organizations • Chamber of Commerce • Private MRO operators (aircraft maintenance/repair/overhaul) 6) Please indicate the reason(s) airport economic impact studies were initiated (select all that apply): No. of Respondents Reasons for Economic Impact Studies Percentage 7 To justify airport investment/expansion 63.9 4 To determine allocation of matching funds 36.4 7 To formulate economic development/planning initiative 63.6 0 It was an academic initiative 0.0 7 To supplement the airport system plan 63.6 6 To measure significance of airport to specific industries 54.5 To obtain financial support 6 from other municipalities or 54.5 from county/region level To measure significance of the 11 airport(s) to the local 100 community 1 Other 9.1 Other Responses: • Because former source of study was no longer completing it. 7) Please indicate the variables measured or estimated in the airport economic impact studies in which you have been involved (select all that apply). No. of Respondents Variables Measured Percentage 10 Wages 90.9 11 Employment 100.0 4 Cargo/Tonnage 36.4 10 Tourism 90.9 6 Air Traffic Levels 54.5 2 Time Savings 18.2 10 Local/Regional Spending 90.9 6 Military/Emergency Services 54.5 4 Other 36.4 Other Responses: • University flight training, weather modification, aerial applications • Off-airport, dependent user impacts • Sales or output, tax revenues • Induced economic impacts 8) Please rank the usefulness of the methodologies that were used in the airport economic impact studies. No. of Rank the Usefulness Methodology Respondents of the Economic PercentageImpact Studies Economic input–output model 8 Extremely Useful 72.7 [e.g., direct, indirect, induced 2 Very Useful 18.2 multiplier or Regional 1 Useful 9.1 Input–Output Modeling 0 Not Very Useful 0.00 System (RIMS)] 0 Not Used in Study 0.00 0 Not Applicable 0.00

58 Qualitative survey (survey of 4 Extremely Useful 36.4 airport users, passengers, etc.) 4 Very Useful 36.4 1 Useful 9.1 0 Not Very Useful 0.00 0 Not Used in Study 0.00 2 Not Applicable 18.2 Community benefits 1 Extremely Useful 9.1 2 Very Useful 18.2 5 Useful 45.5 1 Not Very Useful 9.1 1 Not Used in Study 9.1 1 Not Applicable 9.1 What-if analyses 1 Extremely Useful 9.1 1 Very Useful 9.1 1 Useful 9.1 2 Not Very Useful 18.2 2 Not Used in Study 18.2 4 Not Applicable 36.4 Comment Responses: • Need more description of 8.3 and 8.4 9) Please list the types of data sources that you typically use for developing airport economic impact studies. • Primary data collection from airport authority surveys. Government data such as wage rates, employment levels, multipliers, tax rates, etc. • Primary data from airport users input–output (IMPLAN) interviews of airport managers and FBOs • Airport tenant surveys passenger surveys, job service employment wages, census data and airport job reports • Surveys of airport visitors and users surveys of regional business reliance on aviation surveys of aircraft owners, surveys of FBOs and vendor’s survey of airport management, Dun & Bradstreet and InfoUSA data, FAA tower statistics, state aircraft registration data • Local surveys—businesses in town, plus businesses directly related to airport. Several prior studies at other locations. Some articles on computing direct, indirect and induced impacts • IMPLAN, state data sets tourism visitor studies (numbers of travelers and expenditure profiles) • Airport operations and based aircraft by type. Annual aircraft flight plans, multiplier models. Discussions with airport manager, FBO, and other local sources. Surveys of airport users and visitors (departing passenger surveys of commercial visitors and pilot surveys of GA visitors) • Survey data from airport tenants, secondary data on industries located at the airport (input–output data) • Impact model, qualitative surveys, national database, State Economic Impact of Travel study • BEA, RIMS data, FAA air traffic activity, BLS wage rates, airport tenant lists and employee counts, census data, government and private-sector economic growth data, airport master plan • Tenant/business surveys, passenger/pilot surveys, FAA Instrument Flight Rules database. For Questions 13–18, please pick a single study which you believe is representative of your experience in the field. 13) Did the study attempt to capture any of the following trends in aviation (select all that apply)? No. of Respondents Variables Measured Percentage 2 Growth of air freight 18.2 3 Development of international gateways 27.3 Non-aviation commercial 4 development attracted to the 36.4 vicinity of the airport Use of air transportation in 1 supply chains and just-in-time 9.1 delivery

59 Reliance on aviation by 4 specific industries, such as R&D, biotech, banking, 36.4 universities, etc. Growth in business 2 aviation/emergence of 18.2 fractional ownership 1 Consolidation and globalization 9.1 0 Emergence of very light jets 0.00 4 None of the above 36.4 3 Other (please specify) 27.3 Other Responses: • Economic development • Aviation manufacturing growth in North Dakota • Economic impact of airport in the area • The various studies cover all of these points at one time or another, perhaps a ranking of importance might help. 14) In retrospect, how would you rate the study in terms of the validity of the results and the methodology? No. of Respondents Rate Validity Percentage 0 Not Valid 0.00 2 Somewhat Valid 18.2 8 Valid 72.7 1 Very Valid 9.1 Comment Responses: • Accomplished by limiting the scope of study • Issue of off-airport user impacts • Often qualifications and context get lost in summarization of report results. 15) Was there any follow-up done to the study in terms of on-going assessment or validation? No. of Respondents Follow up Percentage 3 Yes 27.3 8 No 72.7 Comment Responses: • Phone calls of key missing FBOs • Typically not, but sometimes • The airport repeated the study to obtain estimates of impact. 16) If yes, what assessment/validation efforts were undertaken? • Phone calls to verify data and research Internet for media stories of company to validate data. • Further study, peer review • Department of Commerce follow-up/database. 17) How would you rate the studies in terms of impact and utility? (i.e., how successful was it in meeting its objectives?) No. of Respondents Rate Utility Percentage 0 Not Useful 0.00 3 Somewhat Useful 27.3 5 Useful 45.5 3 Very Useful 27.3 Comment Responses: • The qualitative user surveys were most useful • Study was the development of an on-line tool local airports could use to evaluate the economic impact of their airport. Impact study developed regional multipliers that were the basis for the online tool. • Again, this ranges from study to study; some are extremely useful, some are marginal.

60 18) What methods were used to disseminate the results (select all that apply)? No. of Respondents Methods Used to Disseminate Results Percentage 11 Technical Reports 100.0 11 Summary of Executive Reports 100.0 5 Brochures for Public Distribution 45.5 9 Presentations 81.8 9 Web Based Products 81.8 3 Video 27.3 2 Other 18.2 Other Responses: • Press releases and media interviews • Held eight community meetings to present results • Presentations were to key stakeholders 19) If presentations were used to disseminate the results, please indicate type(s) of audience. • City/county commission, state legislative committees, chamber of commerce boards, business/professional organizations, airport and other governmental agency boards and staff • Airport managers, FBOs • Airport staff, airport boards, city commission, county commission, economic development, tourism, chamber of commerce, newspapers, TV, radio, etc. • General public, state and local legislators, airport administrations • City council by request of the chamber of commerce that had authorized the study • Minnesota Council of Airports annual conference workshop presentation • Ranges from community to transportation departments to aviation conferences, etc. • Key stakeholders, city/county/economic development groups • Consumer and citizen groups • General public, local elected officials, local decision makers 20) In your opinion, how often are the results of the airport economic impact studies used as a factor in encouraging substantive change (encourage airport investment, change airport policy, suggest land use regulatory changes, etc.)? No. of Respondents Results Used as a Factor in Encouraging Change Percentage 0 Never 0.00 6 Sometimes 54.5 5 Frequently 45.5 0 Always 0.00 21) In your opinion, what are the top three benefits of airport economic impact studies? Helping community understand the role of airports in the larger economy Understanding airport linkages Public awareness and education Generate support for local match funding Overall financial benefit to community Demonstrating the return on investment of tax paper investment in infrastructure Community support Community support for airport role in city Provide public understanding of aviation facility benefits Encouraging use of the airport by citizens Identifying areas of improvement needed Public investment Justify airport funding Help airport administrators value the relative importance of various facilities and services Influencing government authorities to invest/fund airport improvements

61 Educating airport owners (city and county elected officials) about their operations Quantitative data on jobs and expenditures Provide quantitative data on the economic impact of the airport Funding entity awareness of economic benefits Scale and scope of airport in local economy Appropriate allocation of scarce financial resources Economic development opportunity assessment Promotional brochures and other material that presents information in a concise manner Provide useful overall statistics about business at the airport Funding entity awareness of correlating benefits that are not easily quantified Clearer view of airport investment opportunities Justification for local sponsor financial support Validation of investments Perspective, both quantitative and qualitative, of the importance of the airport to the region Provide data useful as a comparison with other impact studies Public awareness of the range of impacts an airport brings to community Useful in competition for scarce airport improvement dollars Gain support for needed airport expansion 22) What are the top three constraints or disadvantages of airport economic impact studies? Limited data Difficult for the average person to understand Dollars needed to accomplish Missing data Figures may not be believable Economic data unavailability Do not adequately capture off-airport user impacts Wide-range of methodologies used by various entities Easily misinterpreted and overstated FAA often unwilling to fund all or parts of studies Lack of participation of airport occupants Not dynamic Value of time needed by airport survey on industry Uncooperative tenants and managers Accuracy of survey responses may be questionable Age of data when available (time lags) Variance in style, approach between analysts may inhibit comparability between airports Lack of specific data Results only as good as forecasts and models Too many consultants to these reports who use incorrect modeling/methodologies that result in the wrong answer and then all studies get questioned Ability to quantify impacts such as spillover effects, quality of life impacts, etc. Cost of development Validate accuracy of data Surveys soon are outdated Lack of information and understanding of airport operations A region’s economic development depends on many factors, of which airports play a role. It is difficult to capture the relative importance of airports relative to other major factors (employment and the economy) No cohesive data set that encompasses all the information needed Data shortcomings are unclear to readers Results can only adequately reflect a snapshot of current economic performance

62 23) What one thing would you suggest to improve the reliability or applicability of future airport economic impact studies? • Increase quality of input data • Have more support of airport tenants in supplying information and have them understand the value of their response to the overall goal to promote industry • Need for an updated national guide to measurement of airport economic benefits • Access to “national” database with appropriate questions, research methods, and help for “local” researchers who may not have expertise in surveying, sorting, and reaching legitimate conclusions on various impacts (for example, a formula used by the FAA for induced impact may not be reflective of actual results . . . need a “Standard” that could be used by researchers so that comparisons would be made among airport economic benefit). • Consistent collection of key economic activity parameters for baseline data. • Develop a widely accepted method(s) to address the off-airport user impacts associated with airport operations, which address the value to firms that transport cargo and/or personnel through airports. • More direct business activity data on tenants • Set up standards for analyzing various types of impacts, with example studies, for researchers to use in undertaking airport impact studies; for example, templates of surveys (if applicable) or a modeling system that is available for all to access. • Greater understanding by users of what such studies do and don’t mean • Keep think tanks, universities, and unqualified consultants/individuals from putting out questionable reports that diminish the value of good studies.