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ACRP Web-Only Document 53 Measuring and Understanding the Relationship Between Air Service and Regional Economic Development Steve Martin InterVISTAS Consulting Inc. Washington, DC Keith Debbage University of North Carolina at Greensboro Greensboro, NC Amy Kvistad Amy Kvistad Design Boston, MA Douglas Bañez Hubpoint Strategic Advisors LLC Charlotte, NC Guide developed under ACRP Project 03-58 Submitted December 2021 © 2022 by the National Academy of Sciences. National Academies of Sciences, Engineering, and Medicine and the graphical logo are trademarks of the National Academy of Sciences. All rights reserved. ACKNOWLEDGMENT This work was sponsored by the Federal Aviation Administration (FAA). It was conducted through the Airport Cooperative Research Program (ACRP), which is administered by the Transportation Research Board (TRB) of the National Academies of Sciences, Engineering, and Medicine. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FTA, GHSA, NHTSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. DISCLAIMER The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research. They are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board does not develop, issue, or publish standards or specifications. The Transportation Research Board manages applied research projects which provide the scientific foundation that may be used by Transportation Research Board sponsors, industry associations, or other organizations as the basis for revised practices, procedures, or specifications. The Transportation Research Board, the National Academies, and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report. The information contained in this document was taken directly from the submission of the author(s). This material has not been edited by TRB.
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C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR ACRP WEB-ONLY DOCUMENT 53 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Marci A. Greenberger, Manager, Airport Cooperative Research Program Brittany Summerlin-Azeez, Program Coordinator Joseph D. Navarrete, Senior Program Officer Stephanie Campbell-Chamberlain, Senior Program Assistant Natalie Barnes, Director of Publications Heather DiAngelis, Associate Director of Publications Jennifer Correro, Assistant Editor ACRP PROJECT 03-58 PANEL Field of Policy and Planning Debbie K. Alke, Helena, MT (Chair) Prabh K. Banga, Aecon, Oakville, ON Patrick Dooley, Fort Wayne-Allen County (IN) Airport Authority, Fort Wayne, IN Michael P. Hainsey, Golden Triangle Regional Airport, Columbus, MS Marquise McGraw, American University, Washington, DC Elliott D. Paige, Hartsfield-Jackson Atlanta International Airport, Atlanta, GA Sharon L. Glasgow, FAA Liaison Qinya Pang, Airports Council InternationalâNorth America Liaison
iv Contents SUMMARY ................................................................................................................................................. 1 Organization of the Guide ................................................................................................................................... 1 Guide Audience................................................................................................................................................... 2 CHAPTER 1. UNDERSTANDING CHANGES IN AND THE RELATIONSHIP BETWEEN COMMERCIAL AIR SERVICE AND REGIONAL ECONOMIC ACTIVITY ................ 4 National Trends in Commercial Air Service .......................................................................................................... 5 Background ............................................................................................................................................................... 5 Changes in Passenger Traffic .................................................................................................................................... 6 Instability in Fuel Prices ............................................................................................................................................ 7 Airline Profitability .................................................................................................................................................. 11 Industry Response to External Shocks and the Effect on Smaller Communities .................................................... 12 Consolidation ..................................................................................................................................................... 12 Era of Capacity Discipline ................................................................................................................................... 13 Connectivity at Small Airports ............................................................................................................................ 15 Pilot Shortage and the Effect on Small Communities ........................................................................................ 15 Changes in Air Cargo ............................................................................................................................................... 16 National Trends in Socioeconomic Conditions ................................................................................................... 16 Changes in Population and Employment ................................................................................................................ 17 Population and Metropolitan Statistical Areas .................................................................................................. 17 Employment ....................................................................................................................................................... 19 Employment by Industry .................................................................................................................................... 20 Change in Income ................................................................................................................................................... 22 Change in Earnings ............................................................................................................................................. 24 Foreign Direct Investment ...................................................................................................................................... 25 Overview of Economic Growth and Air Travel .................................................................................................... 26 The Pivotal Issue of Causality .................................................................................................................................. 27 Early Research on Air Service and Employment ................................................................................................. 27 Air Service and Employment in Specific Industry Sectors .................................................................................. 30 Air Service and Geographic Concentrations of Immigrant Populations and Business ....................................... 31
v CHAPTER 2. MEASURING CHANGES IN AIR SERVICE AND REGIONAL ECONOMIC ACTIVITY .................................................................................................... 32 Major Air Service Metrics and Sources .............................................................................................................. 32 Key Socioeconomic Data and Sources ................................................................................................................ 35 Primary Data Sources in the U.S. Federal Statistical System .................................................................................. 36 Other Public Sources of Data .................................................................................................................................. 37 Subscription Databases ........................................................................................................................................... 38 Measuring a Regionâs Economic Strength and Character .................................................................................... 39 Economic Clusters ................................................................................................................................................... 40 Location Quotients ................................................................................................................................................. 41 Other Measures of Regional Activity and Competitiveness ................................................................................... 42 Quality of Life ..................................................................................................................................................... 42 Diversity of the Regional Economy and Effects on the Local Tax Base .............................................................. 43 Airports and the Geographic (and Economic) Regions They Serve ...................................................................... 44 Airport Catchment Areas Do Not Correspond to Standard Statistical Areas .......................................................... 45 Using Geographic Information Systems to Develop Additional Insight ............................................................. 47 Insights on the Value of Aviation from National InputâOutput Models .............................................................. 49 Overview of InputâOutput Models ......................................................................................................................... 49 Air Service Is an Input to the Production of Goods and Services by Other Industries ............................................ 50 Measuring Changes in Connectivity ................................................................................................................... 51 Connectivity, Air Service, and Corporate Locational Decisions .............................................................................. 53 CHAPTER 3. ANALYZING THE DATA: CASE STUDIES ILLUSTRATE CHANGES IN AIR SERVICE AND REGIONAL ECONOMIC ACTIVITY ...................................... 55 Generating a Typology of Airport and Economic Regions ................................................................................... 55 Key Air Service and Economic Data Examined ........................................................................................................ 57 Time Period of Analysis ........................................................................................................................................... 58 Analysis of Passenger Air Service and Regional Economic Activity ........................................................................ 58 Changes in Cargo Operations and Regional Economic Activity .............................................................................. 58 A Typology for Selecting Airport Region Case Studies ........................................................................................ 59 Observations from the Case Studies .................................................................................................................. 60 Relationships Between Air Traffic and Regional Economic Activity ....................................................................... 60 Engagement with Regional Stakeholder Organizations .......................................................................................... 63 Measuring Changes in Connectivity ........................................................................................................................ 64 Conveying Economic Impact and How Air Service Supports Regional Economic Activity ...................................... 65
vi CHAPTER 4. ENGAGING WITH REGIONAL STAKEHOLDERS ON THE AIRPORTâS CONTRIBUTIONS TO ECONOMIC ACTIVITY ......................................................... 66 Engaging with Regional Stakeholders .................................................................................................................. 66 Chambers of Commerce ......................................................................................................................................... 66 Regions Characterized by Dominant Employer with Ties to Aviation ................................................................ 68 Regional Economic Development Organizations .................................................................................................... 69 Other Regional Advocacy Groups ........................................................................................................................... 70 Distinguishing Economic Impact from Regional Economic Development ............................................................. 71 Overview of Airport Economic Impact Analyses ..................................................................................................... 71 The Shortcomings of Traditional Economic Impact Analyses Vis-Ã -vis Regional Economic Activity....................... 74 The Disconnect with Regional Economic Development ..................................................................................... 75 CHAPTER 5. TELLING THE AIRPORTâS STORY OF CONTRIBUTIONS TO REGIONAL ECONOMIC DEVELOPMENT: TOOLS AND SUGGESTIONS ................................. 76 Recognizing Audience Segments and Varying Degrees of Interest ....................................................................... 76 Challenges Conveying Information to Different Audiences .................................................................................. 77 Challenges with Economic Concepts ...................................................................................................................... 77 A Template for Describing the Airportâs Contributions to a Regional Economy 78 Recognizing the Audience ....................................................................................................................................... 79 Describing the Airportâs Market ............................................................................................................................. 80 Explaining and Illustrating Economic Concepts ...................................................................................................... 80 Using Data, Models, and/or GIS Capabilities to Estimate Impacts and Locate Businesses (by Industry Sector) .... 81 Using Graphics to Make Your Point...................................................................................................................... 81 Guiding Principles for Graphics ............................................................................................................................... 81 Types of Charts ....................................................................................................................................................... 82 Bar Graphs .......................................................................................................................................................... 82 Dual-Axis Charts ................................................................................................................................................. 84 Time-Series Graphs ............................................................................................................................................ 85 Pie Graphs .......................................................................................................................................................... 87 Using Icons and Infographics to Illustrate Concepts ............................................................................................... 87 Suggestions for Using Maps as Graphic Aids .......................................................................................................... 88 Personalizing the Analysis / Airport Story with Individual Examples .................................................................... 89 What Product Options are Available to Communicate the Airportâs Contributions to the Regional Economy? .... 90 APPENDIX I. GLOSSARY OF KEY TERMS AND DATA ELEMENTS .......................................... 91 Air Service Data ................................................................................................................................................... 91 Socioeconomic Data and Concepts ...................................................................................................................... 94
vii APPENDIX II. NAICS INDUSTRY STRUCTURE SUMMARY ....................................................... 97 APPENDIX III. REFERENCES .......................................................................................................... 101 Academic ........................................................................................................................................................... 101 Industry and Government .................................................................................................................................. 103 APPENDIX IV. A SIMPLIFIED EXPLANATION OF GROSS DOMESTIC PRODUCT AND ECONOMIC OUTPUT .......................................................................................... 105 APPENDIX V. SHORT VERSIONS OF CASE STUDIES ............................................................... 107 Passenger Service Airports ................................................................................................................................. 107 Greater Atlanta: Aviation and Increasing Employment in Two Major Industry Sectors ...................................... 107 The Region and its Economic Strengths ................................................................................................................ 108 The Airport and its Air Service .............................................................................................................................. 108 Connectivity .......................................................................................................................................................... 109 Changes in Air Service and Economic Activity ...................................................................................................... 109 Stakeholders Perspectives on Contributions of Air Service to Economic Development ...................................... 109 Communicating the Airportâs Economic Impact ................................................................................................... 110 Greater Austin: Significant Growth in Economic Activity and Air Service ........................................................... 110 The Region and Its Economic Strengths................................................................................................................ 111 The Airport and Its Air Service .............................................................................................................................. 111 Connectivity .......................................................................................................................................................... 112 Changes in Air Service and Economic Activity ...................................................................................................... 112 Foreign Direct Investment ................................................................................................................................ 112 Stakeholders Perspectives on Contributions of Air Service to Economic Development ...................................... 112 Communicating the Airportâs Economic Impact ................................................................................................... 113 Columbia, Missouri: A Non-Hub Succeeding in the Shadow of Larger Facilities ................................................. 113 The Region and Its Economic Strengths................................................................................................................ 114 The Airport and Its Air Service .............................................................................................................................. 114 Connectivity .......................................................................................................................................................... 115 Changes in Air Service and Economic Activity ...................................................................................................... 115 The Airport, Its Economic Impact, and Regional Stakeholder .............................................................................. 115 Des Moines, Iowa: Air Service and Economic Activity Related to Finance and Insurance .................................. 116 The Region and Its Economic Strengths................................................................................................................ 116 The Airport and Its Air Services ............................................................................................................................ 116 Connectivity .......................................................................................................................................................... 116 Changes in Air Service and Economic Activity ...................................................................................................... 117 Communicating the Airportâs Economic Impact ................................................................................................... 117 Stakeholders Perspectives on Contributions of Air Service .................................................................................. 117
viii Fresno, California: A Small Hub with Growing Air Service and Economic Activity .............................................. 118 The Region and Its Economic Strengths................................................................................................................ 118 The Airport and Its Air Services ............................................................................................................................ 118 Connectivity .......................................................................................................................................................... 119 Changes in Air Service and Economic Activity ...................................................................................................... 119 Stakeholders Perspectives on Contributions of Air Service .................................................................................. 119 Communicating the Airportâs Economic Impact ................................................................................................... 120 Green Bay, Wisconsin: Competing Against Other Nearby Airports ..................................................................... 120 The Region and Its Economic Strengths................................................................................................................ 120 The Airport and Its Air Service .............................................................................................................................. 121 Connectivity .......................................................................................................................................................... 121 Changes in Air Service and Economic Activity ...................................................................................................... 122 Air Service Goals Tied to Business Activity ........................................................................................................... 122 Communicating the Airportâs Economic Impact ................................................................................................... 122 Greensboro Piedmont Triad International Airport: Expanding Traffic in the Shadow of Larger Airports ............ 122 The Region and its Economic Strengths ................................................................................................................ 122 The Airport, Its Air Services, and the Shadows Cast by CLT and RDU ................................................................... 123 Connectivity .......................................................................................................................................................... 123 Changes in Air Service and Economic Activity ...................................................................................................... 124 Air Service Development and Regional Stakeholders ........................................................................................... 124 Communicating the Airportâs Economic Impact ................................................................................................... 124 Greater Miami: International Air Service for Regional Development ................................................................ 124 The Region and Its Economic Strengths................................................................................................................ 125 Foreign Direct Investment ................................................................................................................................ 125 The Airport and Its Air Service .............................................................................................................................. 125 Connectivity .......................................................................................................................................................... 126 Changes in Air Service and Economic Activity ...................................................................................................... 126 Stakeholders Perspectives on Contributions of Air Service to Economic Development ...................................... 127 The RaleighâDurham Area and PST Employment ............................................................................................... 127 The Region and Its Economic Strengths................................................................................................................ 127 Changes in Air Service ........................................................................................................................................... 128 Connectivity .......................................................................................................................................................... 128 Changes in Air Service and Economic Activity ...................................................................................................... 128 Regional Stakeholders and Air Service Interests .................................................................................................. 128 Communicating the Airportâs Economic Impact ................................................................................................... 129 Reno-Tahoe: Rebounding from the Great Recession ......................................................................................... 129 The Region and Its Economic Strengths................................................................................................................ 129 The Airport and Its Air Services ............................................................................................................................ 130 Connectivity .......................................................................................................................................................... 130
ix Changes in Air Service and Economic Activity ...................................................................................................... 131 Stakeholder Perspectives on Contributions of Air Service to Economic Development ........................................ 131 Greater San Diego: More Than Just a Tourist Destination................................................................................ 131 The Region and Its Economic Strengths ............................................................................................................... 131 Air Service and Connectivity ................................................................................................................................. 132 Changes in Air Service and Economic Activity ...................................................................................................... 133 Connections with Regional Economic Stakeholders ............................................................................................. 133 Charles M. Schulz Sonoma County Airport: A Non-Hub with Expanding Services in the Shadow of Large Competitors ......................................................................................................................... 133 The Region and Its Economic Strengths ............................................................................................................... 134 The Airport and Its Air Service .............................................................................................................................. 134 Connectivity .......................................................................................................................................................... 135 Changes in Air Service and Economic Activity ...................................................................................................... 135 Communicating the Airportâs Economic Impact ................................................................................................... 135 Air Cargo and Freight Airports ......................................................................................................................... 136 AllentownâLehigh Valley Airportâs Cargo Operations and Contributions to Regional Economic Development .................................................................................................................... 136 The Region and Its Economic Strengths ............................................................................................................... 136 The Airport and Its Services .................................................................................................................................. 136 Air Cargo Linkages to Regional Economic Development ...................................................................................... 137 Huntsvilleâs Cargo and Freight Operations Support Regional Economic Development ...................................... 138 The Region and its Economic Strengths ................................................................................................................ 138 The Airport and Its Services .................................................................................................................................. 138 Air Cargo Linkages to Regional Economic Development ...................................................................................... 139 Regional Stakeholders Support the Airport and Its Contributions to Economic Development ............................ 139 ACRP Web-Only Document 53 is the Guide developed for ACRP Project 03-58 and is associated with ACRP WebResource 12: Air Service Development and Regional Economic Activity. ACRP WebResource 12 can be accessed at www.trb.org.
