Economy Advantage-General Internals

Economy Advantage-General Internals

Using the FAA methodology for calculating jobs created, it is estimated that an infusion of $4 billion in funding for NextGen would generate 77,000 jobs. The methodology referenced is a multiplier system developed by FAA’s Aviation Policy, Plans and Environment Office, based on Bureau of Labor Statistics figures, which estimates the number of jobs that would be created for each $1 million invested in NextGen: Aircraft Equipage: 24 jobs per million invested, Construction: 21 jobs per million invested, Research & Development: ranges from 32-36 jobs per million invested In September 2008, passenger airline employment fell to 397,400, marking the first plunge below 400,000 since the Bureau of Transportation Statistics began maintaining these figures in 2003. It also marked a decline of 22,400 jobs from December 2007 and 68,300 jobs since 2003. The jobs created will be high paying jobs - -both manufacturing jobs and jobs created by the installation and maintenance of the equipage. A viable aviation sector enhances economic activity in a wide number of industries outside aviation including, among many others, travel and tourism and industries that rely on just in time global inventories and shipping capability. Global Competitiveness: ATC modernization is a global issue with plans and developments occurring in Europe and other rapidly growing regions. In addition to the significant domestic benefits, early investment in NextGen will increase demand for U.S.-developed ATM solutions in international markets, further strengthening the contribution of aerospace to the U.S. balance of trade and creating additional jobs.

Airports play an eminent role in the economic development of a region, as well as the nation as a whole. Airports facilitate the fast movement of man and materials, thereby fostering trade and commerce. Airports support employment generation. Direct employment opportunities include workers from the construction sector when the airport is being built. Once it is operational, personnel is required for a range of services, including airport operations and management, aircraft maintenance, storage facilities, charter services and leasing activities. The Los Angeles Times reported that the Dallas/Fort Worth (DFW) International Airport has been generating massive employment opportunities since its inception in the 1970s. Quoting data from the US Department of Commerce, the US daily said that the four counties surrounding the DFW airport had witnessed 148% growth in employment by the turn of the century. National employment surged 67% during this period. Airports offer increased accessibility, which in turn fuels the tourism sector. With an increase in the number of visitors and airport users, more money flows into the local economy. With increased economic activity and employment, consumer behavior changes, raising the standard of living of the people in the region. Thus, the availability of airports provides a thrust to the GDP of the local region, having a positively impact on the national economy.

Economy Advantage-Multiper Internals

Investing in aviation creates multiplier effects and generates growth in other industries

ICAO 2003 (International Civil Aviation Organization, “Economic Contribution on Civil Aviation” http://legacy.icao.int/ATWorkshop/C292_Vol1.pdf)

The air transport industry has experienced rapid expansion along with the growth of the world economy, and the demand for air transport services is primarily driven by economic development. In turn, civil aviation acts as an economic catalyst for local/regional and national economies around the globe. The level of economic activity of the air transport industry is closely linked to the level of economic activity in markets and economies that the industry serves. Higher levels of economic activity go hand in hand with a growing demand for air transport, benefiting not only from expanding industries and trade but also from generally higher income and consumer spending. Air transport (airlines, airports and air navigation infrastructure) accommodates the needs of millions of individuals to travel and of business communities to have goods transported by air. In 2002, worldwide scheduled services carried over 1.6 billion passengers and 30 million tonnes of air freight and mail. Volume I — Global Perspective Volume I of this circular emphasizes the importance of civil aviation in the world economy and provides an assessment of the contribution of civil aviation (in terms of global output and employment), followed by a profile of the major contributing civil aviation industries. Economic activity is the value of goods and services produced in an economy. In this study, economic activity includes the goods and services produced by civil aviation, and other industry groups affected by civil aviation. Economic activities that are directly attributed to civil aviation industries comprise those of airlines, other aircraft operators and affiliates, airports, air navigation services providers and affiliates, aerospace and other manufacturers as well as other industries and their affiliates. Airlines deliver air transport services, the final product of civil aviation industries, to their customers. It has been estimated that civil aviation industries generated a total direct output of $652 billion worldwide in 1998. When these values, which include intermediate inputs, are consolidated in order to eliminate the components of double counting, it is estimated that civil aviation contributed to the world economy some $370 billion in consolidated direct output in 1998, the production of which required employment of at least 6 million people along the supply chains of intermediate inputs and final demand. The full economic impact of civil aviation industries cannot be assessed without taking into account the indirect and induced impacts involving other related industries. Indirect impacts involve the transactions with related suppliers along the production chains. Induced impacts cover successive rounds of increased household spending that result from the direct and indirect impacts. In addition, an impact assessment may also include the off-airport expenditure of air transport users (passengers and freight forwarders) and related employment, which are referred to as catalytic impacts. These levels of economic activity can be viewed as having a cascading effect on the global economy. The output of the air transport component of civil aviation yields the direct impacts which in turn stimulate the indirect and ultimately the induced impacts as well as catalytic impacts. These direct economic activities have multiplier effects upon industries providing either aviation-specific and other inputs or consumer products (goods and services). The air transport component of civil aviation is estimated to have generated a total output of $1 360 billion and 27.7 million jobs worldwide in 1998, representing about 4.5 per cent of the world output in terms of real gross domestic product (GDP). The multiplier effects of air transport can be calculated as a ratio of the sum of catalytic, indirect plus induced demand effects to the direct demand effects, in terms of output and employment. It is estimated that each dollar of output produced in the air transport industry worldwide creates a demand of $3.25 output in other industries, and that each job in air transport creates 6.1 jobs in other industries.
AIRPORT INVESTMENTS KEY TO ECONOMIC IMPACTS AND MULTIPLIERS

AMPU CT 2005 Airport Master Plan Update Center for strategic infrastructure research analysis and government report

Airports are economic generators in the communities they serve. They offer business opportunities to entities engaged in servicing aircraft and providing flight services to local and visiting pilots and passengers. Airport businesses also serve other users in their community by providing a convenient location to receive and send shipments of goods. In sum, airports serve as gateways for economic activity, providing a stimulus for business enterprises, and generating employment opportunities for area residents. The economic contribution of an airport should be publicly recognized so that actions to protect its continued operation can gain community support. For some, an airport is viewed as a recreational facility that is used by relatively few persons. However, a broader vision is more appropriate, as airports provide services that affect all citizens. For example, an airport enables such activities as: 1. Access to the national air transportation system. 2. Transshipment of equipment, supplies, and personnel. 3. Emergency ingress and egress transportation, including medical response. 4. Shipment of time-sensitive items. 5. Pilot training. 6. Aircraft maintenance and storage. The importance of air transportation, particularly in the corporate aviation sector, is growing. The ability to make just-in-time deliveries and to transport sales and customer service staff to quickly forming events is a critical business advantage. The Waterbury-Oxford Airport (OXC) is actively used for all of the above purposes, and generates positive economic impacts in terms of employment and purchases of goods and services from local businesses. In general, the local communities served by OXC include those within the Central Naugatuck Valley and beyond, as reflected by the geographic distribution of the based aircraft owners. Airport economic impacts are generally expressed as direct, indirect, and induced. Direct economic impacts are defined as the jobs and sales generated by businesses located at an airport (i.e., those which are dependent on access to the facility). The expenditures by these businesses for local goods, services, and capital improvements are also classified as direct impacts. Indirect economic impacts are the jobs and revenues generated by businesses located elsewhere in the community, but are due to their use of the airport. This would include any sector of the local economy that serves users of the facility, or that uses an airport to transport goods, supplies, or personnel in order to enhance business opportunities and activities. Like on-airport businesses, these enterprises employ staff, purchase locally produced goods and services, and invest in capital projects. Businesses in this category can include hotels, restaurants, manufacturers, shippers, and retail stores whose existence is tied to the airport or to aviation. When assessing economic impact values, distinction is made between those generated as a result of the airport (direct) and those serving other segments of the local economy (indirect). Induced economic impacts are those generated in a community caused by the recycling of spending from both the direct and indirect economic impacts. Airport businesses, users, employees, and the airport itself are, in essence, consumers whose expenditures support other businesses and employment in the community. Studies have indicated that a dollar spent in a region will create at least another dollar of income in that region. This reaction is commonly referred to as the "multiplier effect." Thus, the induced economic impact of any activity is at least equal to the sum of the direct and indirect impacts, in terms of dollars. Finally, the total economic impact is defined as the sum of the direct, indirect and induced impacts. For example, if an airport generates $60 in direct impact, $40 in indirect impact, and has a 2.0 multiplier for the induced impact, then the total economic impact would be $200 (i.e., ($60 + $40) * 2.0 = $200). As an airport’s activity level changes over time, the total economic impact will similarly change. Continued improvement of an airport may serve to attract more activity and result in an increased economic impact value to the communities served.

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