Measuring and Understanding the Relationship Between Air Service and Regional Economic Development (2022)

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91 A P P E N D I X I Glossary of Key Terms and Data Elements Air Service Data Indicator Description O&D traffic O&D records the full itinerary or routing that a passenger is flying between their origin (O) and their destination (D), which can contain one or more segments or flights. O&D routings with one segment are called nonstop and routings with multiple segments are called direct, when a passenger does not have to change planes and connecting when multiple flights and planes are taken. The volume of O&D traffic in a city-pair market is a measure of the total demand for air travel between the two locations Passengers Per Day Each Way (PDEW) A common demand measure of O&D passengers in the form of one-way directional passengers per day Transfer/Flow Passenger A passenger whose O&D routing involves more than one segment and has a connecting segment or segments Enplanement A passenger boarding a flight at a given airport Deplanement A passenger getting off a flight at a given airport Capacity A measure of total seats operated by an airline or multiple airlines between two nonstop segments Revenue Passenger Miles (RPM) A measure of traffic demand calculated as the number of revenue-paying passengers carried multiplied by the distance traveled (need to note non- rev pax) Available Seat Miles (ASM) A measure of capacity calculated as the number of seats available multiplied by the distance traveled. Not all seats are necessarily “available” for paying passengers (e.g., some seats blocked for crew rest) Net Average Fare Price paid by passengers, or revenue to airlines, divided by the number of passengers. This measure is expressed as the average paid in one direction and is called net because it excludes taxes and fees paid by passengers when booking their trips Average Yield Price paid by passengers per mile calculated as revenue divided by the RPMs flown (passengers times miles) or also net average fare divided by distance Load Factor The proportion of airline capacity or seats that is filled by passengers, or passengers divided by seats. Airline load factors on an average basis are often weighted by mileage and calculated by dividing RPMs by ASMs Enplaned Freight/Mail Amount of freight or mail expressed in pounds loaded onto an aircraft at the route’s origin Deplaned Freight/Mail Amount of freight or mail expressed in pounds unloaded from an aircraft at the route’s destination Onboard Freight/Mail Amount of freight or mail expressed in pounds carried on a given segment

92 Enplaned Freight/ Departure Performed Known as freight per departure, it provides a way to benchmark whether a flight of a specific aircraft type is carrying more or less freight over time Payload Total weight in pounds of freight and/or mail that an aircraft can accommodate on a given segment. This amount takes into account the certified takeoff weight of an aircraft including the weight of passengers and associated luggage (if applicable) and the equipment and operating load (fuel, oil, crew, and flight attendant supplies) Commodity The type of products that are shipped. Is there a fixed list of categories of commodities – e.g., electronics, cured beef, flowers, pharmaceuticals? Are they defined in the “harmonized system”? Shipment An individual movement of commodities from an establishment to a customer or to another location of the originating company (includes warehouses, distribution centers, retail, or wholesale outlet); uses one of more modes of transportation Air Freight Property, other than express freight (see below) and passenger baggage being transported by air Express Freight Property, other than passenger baggage, that charges a premium over standard freight prices for faster delivery Distance Shipped Total distance of combined segments flown between O&D of shipment (is this great circle distance between the two points, or actual?) Average Miles per Shipment Calculation of average miles per shipment or total distance shipped for all shipments divided by number of shipments Tons Shipped Total weight of an entire shipment, reported in pounds; pounds are then converted to short-tons (2,000 pounds) and displayed in thousands Ton Mile One ton (2,000 pounds) transported one mile; calculated by multiplying the aircraft miles flown on each segment by the number of tons on that segment Freight Tonne Kilometers (FTKs) A measurement of actual freight traffic (similar to RPKs or RPMs but for freight), taking into account weight and distance; it is the freight weight in tonnes multiplied by the distance in kilometers Standard Classification of Transported Goods A commodity-coding system created by the U.S. and Canada based on the Harmonized System. What is “the harmonized system”? Value of Shipment The dollar value of the entire shipment, excluding taxes or fees and expressed in millions of dollars Air Imports Total physical movement of merchandise into the U.S. from foreign countries by air by weight? By value? By # of shipments? Air Exports Total physical movement of merchandise out of the U.S. to foreign countries by air by weight? By value? By # of shipments? Electronic Commerce (e- commerce) E-Commerce is defined as the commercial transaction of money, funds, data, and buying and selling of goods, products, or services via the internet Bonded warehouses A facility authorized by U.S. Customs and Border Protection (CBP) for storage or manufacturing of goods on which payment is deferred until the goods are removed into Customs Foreign trade zones (FTZs) FTZ are secure areas under U.S. CBP supervision that are generally considered outside CBP territory upon activation, often located in or near CBP ports of entry. Foreign and domestic merchandise may be moved into zones for operations including storage, exhibition, assembly, manufacturing, and processing. Merchandise may be exported, destroyed, or sent into Customs territory. Merchandise is only subject to Customs duties if shipped into Customs territory and not reshipped to foreign points

93 Cargo tech Airports and their cargo communities are adopting new technologies to increase efficiencies in air cargo processes and supply chains. Cargo Community Systems (CCS) are promoted as a way to solve congestion issues around airports, especially on the landside with trucking and freight forwarding to reduce on-airport wait times; increase efficiency and accuracy of information and communications; increase productivity, throughput and utilization of resources; and increase capacity within existing cargo-related facilities and infrastructure. Most CCS involves usage by a number of cargo stakeholders (shippers, airlines, ground handlers, freight forwarders, truckers, etc.) of a common technology platform to exchange information relevant to shipment status and readiness for handling by these parties District (Port) of Exportation The Customs district in which merchandise is loaded to be taken out of the country; aircraft exported under their own power are credited to the Customs district from which they left the U.S. Import District (Port) of Entry The district where merchandise clears Customs to enter into consumption channels, bonded warehouses or foreign trade zones International Air Value The value of the merchandise at the U.S. port of import/export in U.S. dollars; includes the selling price, insurance, and other charges State of origin The state, territory, or U.S. possession from where the merchandise started its journey to the port of export State of destination The state, territory, or U.S. possession for which the merchandise is destined Large Hub U.S. airport whose enplanements are at least 1% of total U.S. annual enplanements Medium Hub U.S. airport whose enplanements are at least 0.25% but less than 1% of total U.S. annual enplanements Small Hub U.S. airport whose enplanements are at least 0.05% but less than 0.25% of total U.S. annual enplanements Non-Hub U.S. airport whose enplanements are less than 0.05% of total U.S. annual enplanements. Those with more than 10,000 annual enplanements are categorized as primary non-hubs. Those with between 2,500 and 10,000 enplanements are considered non-hub non-primary commercial service airports. Those with under 2,500 annual enplanements are considered GA or Reliever airports EAS The EAS program subsidizes air service to airports where commercial service would not otherwise be provided. The program was created under the Airline Deregulation Act of 1978 and is administered by the U.S. Department of Transportation. It is funded by overflight fees and regular appropriations. To receive subsidized service, communities must meet multiple eligibility requirements, including those relating to lack of commercially-viable flights and distance from medium or large hub airports EAS carriers Airlines that provide the subsidized flights to EAS communities. In the U.S. in 2021, there were 11 air carriers that operated flights to 110 small communities supported by the EAS program. These carriers tend to operate small aircraft. Of the 110 EAS communities, half received flights with 50-seat aircraft, and another 44 received flights with 8- or 9-seat aircraft. Most of that service was to large hub airports that also served as major airline hubs (e.g., ATL, LAX, ORD, MSP)

94 Socioeconomic Data and Concepts Indicator Description Employment The number of jobs or employees (or some other measure of labor such as Full Time Equivalent) associated with the activity that is being examined. Employment is a common indicator measured in economic impact analysis of airports as it is easily understood by broad audiences in terms of giving a sense of scale about an activity or operation. Employment is often reported by different categories. The major groupings include  Private nonfarm employment (e.g., employment in a privately- owned company)  Farm employment. The number of workers engaged in the direct production of agricultural commodities, either livestock or crops; whether as a sole proprietor, partner, or hired laborer  Public-sector employment (includes federal civilian, military, state government, local government, and government enterprises). Government agencies that cover a substantial portion of their operating costs by selling goods and services to the public and that maintain their own separate accounts. Examples include state-owned and -operated liquor stores or hospitals. Employee Earnings The wages, salaries, and benefits earned by employees. GDP or GRP GDP is a measure of the dollar value of final goods and services produced locally as a result of economic activity. This measure is net of the value of intermediate goods and services used up to produce the final goods and services. GRP is the comparable measure applied to a regional economy rather than a state or nation. Economic Output (or Economic Activity) The dollar value of the production of new goods and services including intermediate goods and services. It is a broader measure of the economy than GDP. Gross output can also be measured as the sum of an industry's value added (similar to GDP) and intermediate inputs. Personal Income Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It does not include realized or unrealized capital gains or losses. Per capita income Per capita income is the mean income computed for every man, woman, and child in a particular group including those living in group quarters. It is derived by dividing the aggregate income of a particular group by the total population in that group. Disposable personal income Disposable personal income is the income available to persons for spending or saving. It is equal to personal income less personal current taxes. Median household income Household income includes the income of the householder and all other individuals 15 years old and over in the household, whether they are related to the householder or not. The median divides the income distribution into two equal parts: one-half of the cases falling below the median income and one-half above the median. For households and families, the median income is based on the distribution of the total number of households and families including those with no income.

95 Indicator Description Consumer Spending Sometimes known as personal consumption expenditures, these statistics show the goods and services purchased by, or on behalf of, people living in the U.S. LQ Measures of how an industry’s presence in a region compares to the national average. LQs are calculated by comparing an industry’s share of local employment with its share of national employment. An LQ value of 1.0 would suggest that the percentage of an industry’s employment in an area is the same as that for the nation. An LQ greater than 1.0 would indicate an higher proportion of industry employment in the area while an LQ less than 1.0 would suggest a low share of industry employment. Higher LQs suggest industry specialization. Economic Cluster A geographic concentration of interrelated, competitive firms and related institutions that are of sufficient scale to generate external economies that are not typically found in regions lacking such concentrations. Establishment A measure of economic data for business defined by the Census Bureau within the U.S. Department of Commerce. An establishment is a single physical location where one predominant activity occurs. Firm A measure of economic data for business defined by the Census Bureau within the U.S. Department of Commerce and the Internal Revenue Service (IRS) within the Department of the Treasury. A firm is an establishment or a combination of establishments, usually with a unique Employer Identification number issued by the IRS. Firms may operate in one industry or in multiple industries. Enterprise (or “company”) A business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single- establishment firms. Each multi-establishment company forms one enterprise - the enterprise employment and annual payroll are summed from the associated establishments. NAICS The means by which industrial activities are categorized. NAICS uses a six-tier grouping structure that progressively becomes more granular. For instance, two-digit NAICS codes identify each broad “sector” (e.g., Code 48 = Transportation), while six-digit NAICS codes signify a specific “national industry” (e.g. Code 481111 = Scheduled Passenger Air Transportation). App. III includes a summary of the major 2- and 3-digit NAICS categories, showing industry sectors and subsectors. Foreign Direct Investment An investment in domestic companies and assets of another country by a foreign investor. Productivity There are two types of productivity measured, labor and multifactor productivity. Labor productivity measures output per hour of labor and multifactor productivity measures output per unit of combined inputs, which consist of labor and capital. Population The number of residents within an area such as a state. Working age population Generally considered to be the population between the ages of 18 and 64. MSAs Defined by the federal government as an area consisting of a core county or counties in which lies an urban area having a population of at least 50,000, plus adjacent counties having a high degree of social and economic integration with the core counties as measured through commuting ties.

96 Indicator Description CSA Defined by the federal government as an area consisting of two or more adjacent metropolitan or micropolitan statistical areas with a sufficiently large employment interchange. Micropolitan statistical area Defined by the federal government as an area consisting of a core county or counties in which lies an urban area having a population of 10,000 to 50,000, plus adjacent counties having a high degree of social and economic integration with the core counties as measured through commuting ties. Input–Output (I-O) Model Statistical models used to quantify the effects of changes in the economy. They are based on national data maintained by the U.S. BEA that depict the relationships between different sectors of the economy. The models show how the output of one industry may be used as an input to another, eventually leading to a final good or service ultimately consumed. Intermediate Use A product or service that is used in the production of another final product. Intermediate goods are sold between industries. Some intermediate goods (e.g., salt) can also be final products, since they are purchased and consumed by individuals. Catalytic Impacts or Wider Economic Benefits Impacts from or wider economic benefits of aviation that accrue to industries that rely on effective air transport links to function. Aviation’s impact on other industries improves the efficiencies in a wide spectrum of economic activities, for example: offers just-in-time delivery systems in the supply chains; enables international investments into and out of countries and regions; and supports innovations by encouraging effective networking and collaboration between organizations located in different parts of the globe. The connectivity enabled by aviation allows more remote areas to participate more fully in the wider economy. This encourages higher productivity, investment and innovation. Connectivity helps businesses operate efficiently and attract high-quality employees. QOL Indicators There does not appear to be a universally accepted definition of how QOL is measured. A society’s QOL measures can include, but are not limited to, multiple major components, including Health and Education (e.g., percent of the population with high school education or less, infant mortality rates, access to health care metrics); Environmental (e.g., ); Economic (e.g., per capita income, unemployment rate, business diversity indices); and Social (e.g., percent of the population living below a set poverty line, percent of the population that attends church, marriage rate). Aviation’s connection to QOL is often framed in terms of exposure to environmental concerns (e.g., noise, emissions). Major international aviation organizations relate aviation to economic development in less- developed countries in terms of access to markets, educational opportunities, tourism development, and health care and humanitarian aid.