Airports have the potential to be generators of value for many different stakeholders ranging from passengers, airlines and investors to surrounding economies and communities.
They are widely regarded as critical generators of employment opportunities and thus economic growth and urban regeneration.
Airports have a far reaching catalytic impact in that their economic activity covers many other industrial sectors, from tourism, construction, air freight, hotels, transport and maintenance, to electronics, pharmaceuticals, perishables and more.
These wider economic activities occur beyond the aviation sector but are supported by the connectivity that aviation brings between geographical areas.
For aviation and airports to continue being generators of value for all stakeholders involved, investment in airports is vital.
The increasing demand for air travel requires better use of existing infrastructure, development of new infrastructure and the right investment approaches to bridge gaps in infrastructure financing.
Without agreement on a way forward, there could be constraints on the ability of States to meet future demand and reap the socio-economic benefits of increased airport and airline operations.
According to the Air Transport Action Group (ATAG), 2014 saw the air transport industry generate an estimated 9.9 million direct jobs worldwide, or $664.4 billion of the world’s Gross Domestic Product (GDP).
The airport sector specifically is responsible for 5.95 million of those jobs, accounting for $398.6 billion in GDP, with airport operators employing 450,000 positions, accounting for $30.2 billion in GDP.
In addition, the air transport supported 11.2 million indirect jobs, accounting for $761.4 billion in GDP; 5.2 million induced jobs, accounting for $355 billion in GDP; and generated 36.3 million catalytic jobs or $892.4 billion in GDP. The air transport industry in total supported a whopping 62.7 million jobs and generated $2.7 trillion in GDP.
Taking a closer look at two mature aviation markets, Europe and the US, helps to illustrate the impact of air transport on the economy and social wellbeing.
According to The Economic Impact of Commercial Airports in 2013 – a study commissioned by ACI EUROPE – every year European airports and their associated aviation activities support almost 12.4 million jobs and contribute €675 billion toward Europe’s GDP, representing 4.1% of the European economy.
Similarly, ACI North America estimated that in 2013, 485 commercial airports in the US supported 9.6 million jobs, creating an annual payroll of $358 billion and producing an annual output of $1.1 trillion.
The latest analysis by the Port Authority of New York and New Jersey titled, The Economic Impact of the Aviation Industry on the New York – New Jersey Metropolitan Region, showed that in 2015, the regional airport system served an estimated 123 million passengers (excluding Atlantic City Airport) and handled more than two million tons of cargo.
The total combined impact of aviation operations, capital spending and tourism resulted in 588,800 total jobs, $30.6 billion in wages and $84.7 billion in sales or economic activity.
The contributions that aviation makes are essential in all regions of the world and should not be taken for granted. Therefore, aviation policies must be far-sighted to incentivise public and private investment in infrastructure development to meet the capacity challenges of the future.
Countries and industries must invest in better air connections if they aim to benefit from increased trade, investment, tourism activity and productivity. Regulation has its place, but it should be proportionate, fit for purpose and streamlined.
The economic impact of airports and the ways in which all parties can collectively benefit from airport investment will be key topics at the upcoming Airports Council International (ACI) 9th Annual Airport Economics & Finance Conference and Exhibition, organised in co-operation with the World Bank.
Along similar lines, the conference will also cover such pertinent topics as: challenges to air traffic liberalisation; delivering growth and ensuring route development; the potential impacts of Brexit; the value of airports, and the exploration of policy solutions on a range of airport business disciplines.
And ahead of the conference at the ACI/World Bank Annual Aviation Symposium, you will have a chance to hear industry experts speak on risk and opportunities of airport Public/Private Partnerships from all fronts.
I look forward to seeing you in London for a must-attend event for executives from airports large and small looking to address the key economic and finance issues of our industry.