The Impact of General Aviation on State and Local Economies
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1 The Impact of General Aviation on State and Local Economies S T A T E R E P O R T S 2014
2 Dear Reader, On behalf of the Alliance for Aviation Across America, the National Association of State Aviation Officials, and the American Association of State and Highway Transportation Officials, we are pleased to release this report, entitled The Impact of General Aviation on State and Local Economies. The goal of this report is to help communicate the vast importance of general aviation and our nation s network of local airports to local economies and towns around the country. For literally thousands of communities across the United States, general aviation is a lifeline to products, supplies, and services. It supports everything from medical care, disaster relief, law enforcement and first responder activities, to blood and organ transport and agriculture, especially within rural communities. Whether it is helping businesses to visit plants in far-off markets, airlifting patients or supplies to or from disaster areas, surveying crops, or helping to fight forest fires, general aviation supports communities in countless ways. The general aviation industry in America also supports approximately $150 billion annually in economic activity and more than 1.2 million jobs, sustaining a payroll of $53 billion every year. With over 5,000 public-use airports in the United States, serving over 223,000 general aviation aircraft, general aviation is a major economic driver, a link to vital services for communities, and a crucial part of our national infrastructure. It is our hope that this report will help to educate the public about the immense value of this form of transportation. Sincerely, Selena Shilad Executive Director Alliance for Aviation Across America Bud Wright Executive Director AASHTO Christopher J. Willenborg 2014 Chairman NASAO 2
3 3
4 Table of Contents EXECUTIVE SUMMARY....5 A TRULY NATIONAL TRANSPORTATION ASSET....5 A LARGE PILOT COMMUNITY....5 MILLIONS OF JOBS....5 AN ECONOMIC POWERHOUSE....6 Agricultural Use....7 Medical Services....8 Law Enforcement STATE REPORTS
5 Executive Summary A TRULY NATIONAL TRANSPORTATION ASSET There are 5,261 public-use airports that can be directly accessed by general aviation 1. That is more than 10 times the number of airports served by scheduled airlines. 2 This makes general aviation uniquely situated to serve the public s transportation needs. These public-use airports are often the only available option for fast, flexible air transportation to small and rural communities. They also support jobs, serve as a lifeline to small-to-mid-sized businesses, and provide critical services to remote cities and towns, particularly in times of natural disaster, crisis, or medical emergency. Air transportation is an integral part of our intermodal transportation system. General aviation plays a critical role in the lives of our citizens, businesses, communities and is a major contributor to the economic growth of the state of West Virginia. With the state s geographic challenges, General Aviation and General Aviation aircraft are critical to meeting the needs of businesses, tourism, and to providing access to medical/emergency treatment and disaster relief. Paul A. Mattox, Jr., P. E., Secretary, West Virginia Department of Transportation/Commissioner of Highways A LARGE PILOT COMMUNITY According to the Federal Aviation Administration, there are over 610,576 registered pilots in the United States. 3 For example, according to the South Dakota Department of Transportation s Aeronautics Commission, 2,262 certificated pilots are on the Federal Aviation Administration s registry in South Dakota. MILLIONS OF JOBS A 2006 comprehensive study by Merge Global, Inc., sponsored by the General Aviation Manufacturers Association and the National Association of State Aviation Officials, concluded that employment from general aviation and related activities totaled about 1.2 million jobs. 4 These high-skill jobs in professional services and manufacturing support collective earnings of over $53 billion. 5 For example, Bay Bridge Airport, a public-use general aviation airport owned by Queen Anne s County near Stevensville, Maryland, generated 168 direct and indirect jobs as well as $698,000 in state and local tax collection for 2011/ Federal Aviation Administration. (2012) Unleaded AVGAS Transition Aviation Rulemaking Committee Final Report, p ibid. 3 ibid. 4 Allen, Bruce, et al. (2006) General Aviation s Contribution to the U.S. Economy, p Federal Aviation Administration. (2012) Unleaded AVGAS Transition Aviation Rulemaking Committee Final Report, p Maryland Economic Impact of Airports, Maryland Aviation Administration (2013). 5
6 "Oklahoma s 5.2% unemployment rate one of the lowest in the nation would not be possible if it were not for the many businesses that use general aviation aircraft at airports across our state. Well over 50% of our state s top employers use an aircraft. An aircraft is a tool for them in their business just like a line of credit or an information system. Michelin and ConocoPhillips each employee about 2,000 Oklahomans. They are some of our biggest employers. These companies cite the fact that they can fly directly to the communities where their facilities are in our state as one of the main reasons why they are in Oklahoma. Victor Bird, Director of the Oklahoma Aeronautics Commission AN ECONOMIC POWERHOUSE That same study pegged the national total economic contribution of general aviation at $150 billion annually. 7 General aviation manufacturing is one of the only industries to contribute positively to the balance of trade. According to the General Aviation Manufacturers Association, in 2012, United States general aviation manufacturers exported 720 aircraft, or 47.6 percent of the total aircraft manufactured internationally, which accounts for $4.8 billion in revenue. 8 "Airports are economic engines that bring real dollars into the communities they serve. They facilitate commerce by opening a nation-wide door to an area." Susan R. Shea, Ph.D., Director of the Illinois Department of Transportation, Division of Aeronautics Additional economic impact can be inferred from the 2,247 charter flight companies, 4,871 repair stations, and 600 flight schools employing 93,202 certified flight instructors, as well as 3,138 fixedbased operators in the United States. 9 General aviation plays an essential role in the economic development of communities and the 39 public-use airports across the Commonwealth of Massachusetts. Over 124,000 direct/ indirect jobs with economic output of nearly $12 billion can be attributed to aviation and our statewide system of airports. Christopher J. Willenborg, Aeronautics Division Administrator, MassDOT 7 Allen, Bruce, et al. (2006) General Aviation s Contribution to the U.S. Economy, p General Aviation Manufacturers Association. (2012) 2012 General Aviation Statistical Databook & Industry Outlook, p National Air Transportation Association. (2009) General Aviation in the United States. 6
7 Agricultural Use Across the United States, general aviation is a vital resource for our nation s farms and agricultural producers. Agricultural aviation ensures that our nation s farmers can supply our communities with food and resources such as cotton, timber, and bio-fuel ingredients. Farmers rely upon aerial application operations to survey and monitor crops, feed fish, defoliate cotton prior to harvest, and fight forest and grassland fires. In addition, agricultural aviation allows for the application of herbicides, insecticides, and fertilizer for fruit, vegetables, and grain crops. The use of aircraft allows large areas to be covered quickly, delivering mostly liquid products to control pests and diseases, as well as providing nutrients to planted crops. According to the National Agricultural Aviation Association, there are roughly 1,350 aerial application businesses in the United States in 46 states. 10 Aerial application operations account for 25 percent of commercially-applied crop protection products. 11 In the United States, roughly 71 million acres of cropland are treated annually utilizing aerial application. 12 Aerial applicators account for 100 percent of forest protection applications. 13 These aircraft also assist with public health services, helping to combat mosquitoes and other pests. Agricultural aviation also supports fire-fighting services, aiding those on the ground to suppress fires quickly and safely. "Kansas farmers can attribute approximately $1.2 billion in crop value directly to the efforts of aerial applicators." Jesse Romo, Kansas Director, Division of Aviation General aviation not only helps farms with aerial application and surveying of their land, but ensures that farms can maintain access to supplies, goods, and customers. As a result of this access, general aviation helps farms and businesses to support local economies and rural America as a whole. In South Dakota, 214 aircraft are registered for agricultural purposes and the impact of agricultural spraying by aviation supports $32 million in business sales. 10 National Agricultural Aviation Association. Fact Sheet: Facts About the Aerial Application Industry ibid. 12 ibid. 13 ibid. 7
8 Medical Services Throughout the United States, emergency medical services utilize aircraft, either helicopters or fixed-wing, to provide vital services to the general public. 14 Helicopter air ambulances are typically used to transport patients from the scene of an injury directly to hospitals or trauma centers. Airplanes are used when patients need to travel a longer distance to receive special treatment. Air medical transport is beneficial not only because it enables a higher level of medical care, but also because it supports speedier response. Each year, 1 out of 1,000 people in the United States require air medical services. 15 The response capabilities of helicopters allows over 54 percent of the United States population access to a full-service trauma center within 60 minutes. 16 In rural communities, air medical services play an important role in supporting vital medical care. According to the Association of Air Medical Services: 17 Air medical aircraft are also used to transport blood or other medical supplies. These aircraft may also be called upon to transport specialized medical staff to assist with a mass casualty event or augment rural hospital staff in stabilizing patients. According to the Association of Air Medical Services, between September 2012 and September 2013, the total number of rotor wing bases, which includes home and satellite helipads for air medical aircraft, increased from 776 to 812, with the number of aircraft also increasing from 942 to Within the same time period, the number of bases with fixed-wing services also increased, from 171 to In spite of developments in medical technology, one aspect that has not changed is the need to reach patients in a critical window of time. Air medical services ensure that critical-care remains accessible to communities small and large across the United States. 20 Law Enforcement General aviation aircraft allow law enforcement to extend their capabilities in communities across the country. Both helicopters and fixed-wing aircraft are a force multiplier for law enforcement, providing a broader field of vision, assisting others on the ground with advanced alerts to danger that may otherwise go unseen, and allowing officers to monitor certain situations and remain un- 14 Association of Air Medical Services. (2013) An Economic Analysis of the U.S. Rotary Wing Air Medical Transport Industry, p Association of Air Medical Services. (2011) Air Medical Services: Critical Components of Modern Healthcare Systems, p ibid. p ibid. 18 Association of Air Medical Services. (2013) Atlas and Database of Air Medical Services, p ibid, p ibid, p
9 detected by suspects. Airborne officers are able to direct those on the ground and provide ground officers with information they might not be able to see. According to the Montana Department of Transportation (MDT), Aeronautics, Montana is the only state with primary search and rescue duties under an agreement with Montana s Governor and the U.S. Secretary of the Air Force. The MDT Aeronautics Air Search and Rescue Program has more than 400 Montana volunteer pilots and aircraft to assist in their mission. By far the most important attribute of these aircraft for law enforcement is their coverage range and versatility. These aircraft perform a range of services, such as engaging in pursuits, responding to calls for service, homeland security missions, and fire fighting. According to the U.S. Department of Justice, in 2007, roughly 1 in every 5 large law enforcement agency had a specialized aviation unit operating at least one fixed-wing plane or helicopter. 21 A total of 201 aviation units throughout the United States provided aerial law enforcement coverage in 46 states and the District of Columbia with at least one aviation unit covering the entire jurisdiction. Thirty states had at least one additional unit under either a city or county jurisdiction. 22 According to the 2009 report Aviation Units in Large Law Enforcement Agencies, published by the Department of Justice, 9 out of 10 aerial units responded to calls for service or direct assistance to ground units in Of the 201 airborne law enforcement units across the United States, nearly half issued traffic enforcement citations or made DUI arrests. 24 Seventy-nine percent of units reported being involved in counterterrorism operations, such as conducting critical facility checks on buildings, ports, public utilities, oil refineries, bridges, airports, and monuments. 25 Other activities included surveillance (85 percent), counternarcotics (89 percent), and stolen vehicle recovery (72 percent), just to name a few. 26 The extensive range of activities these units assist with demonstrates how essential general aviation aircraft are to everyday law enforcement operations. Airborne law enforcement is called upon every day to provide vital services to our communities, responding quickly and ensuring the safety of both responding officers and the general public. 21 United States Department of Justice, Aviation Units in Large Law Enforcement Agencies, 2007; Bureau of Justice Statistics Special Report, July 2009, p ibid, p ibid, p ibid, p ibid. 26 ibid. 9
10 Methodology for State Reports This report is a survey of existing information on the value of the general aviation sector to our nation, highlighting the most recent and comprehensive work. The survey aggregates findings from national studies, state transportation and/or aviation department reports, and publicly available data. The purpose is to provide the most comprehensive overview of the benefit of general aviation to our national economy and local communities. Since this body of data is constantly changing, best efforts are kept to ensure that all new and relevant data is incorporated in a timely manner. A wide variety of resources were tapped, including federal government statistics through the Federal Aviation Administration data services, standard Internet search engines such as LexisNexis, and industry websites, as well as state Departments of Transportation and state aviation agencies. Many states have conducted economic impact studies, some more recently than others. For those states without an available report, by and large, a 2006 Merge Global study on the economic impact of general aviation was found to be the most comprehensive, alternative source for information. It is important to note that state reports are of varying focus and scope. Many use varying methodologies, but all state economic value studies included in this survey are based off of activity at general aviation airports. Some of these reports include airports that are in the National Plan of Integrated Airport Systems (NPIAS), and others include all public airports in the state. Also, some state studies include helicopter data, and some do not. For purposes of national aggregation, or side-by side comparison, they do not render apples to apples information. It should be noted that, since much of this data is based off of general aviation airports and does not capture general aviation activity at commercial airports, many of these economic value calculations are likely to be conservative. Most state studies measured both the direct and indirect impact of general aviation, but these studies varied in how they calculated this impact. All direct, indirect, induced, and multiplier impacts were included when possible. For example, in 2008 the Airport Cooperative Research Program published Synthesis Report 7, Airport Economic Impact Methods and Models, which described the principal methods for determining the economic impact of an airport. These methods include: Input output method Typically measures three separate effects direct, indirect, and induced effects. Direct effects include employment and output generated directly by the airport. Indirect effects represent employment and output generated by firms primarily off-airport, but whose activities are attributable to the airport. Induced effects are the multiplier effects caused by successive rounds of spending throughout the economy as a result of an airport s direct and indirect effects. In this method, an airport s total economic impact is the sum of the direct, indirect, and induced effects. Collection of benefits method quantitative or qualitative measures of benefits and costs brought about by an airport, including time saved; costs avoided by using air transportation; capacity improvements from reliever airports; and stimulation of business, recreation, commercial activities, and community benefits. 10
11 Catalytic method Measurement of spillover impacts or how the airport benefits performance on the supply-side of the economy including impacts on investment, trade, and overall productivity of the economy. Unlike the collection of benefits methods, catalytic impacts are usually quantified in monetary terms. Of these three methods, by far the most prevalent is the input output method, which typically measures the sum of direct, indirect, and induced economic impacts (or multiplier effects). Each input output study has specific definitions of impact areas that are related to economic activity measured as a flow of dollars. In general, these impact areas are defined as: Direct impacts The direct impact results from spending in the local area by visitors who arrive by air, as well as spending in the local area for goods and services by airport tenants. Indirect impacts The estimated flow of dollars generated from the supply of materials, goods, and services attributable to the airport by off-airport entities. Induced impacts The multiplier effect of respending the dollars generated through direct and indirect activities. Spending resulting from direct and indirect activities is spent again by the recipient employees and local businesses. Employees use their salaries and wages to purchase goods and services from other businesses. Businesses make their own purchases and hire employees, who also spend their salaries and wages throughout the local, regional, and state economies. It should be noted that individual studies vary in their exact definitions of these impact areas. Direct, indirect, and induced impacts are sometimes referred to as first-, second-, and third- round impacts. The third round of impacts is typically the largest, because it represents a recirculation of the first two rounds. Variables or indices used to measure the flow of dollars within each of the three methods typically include the following: Employment jobs in the aviation industry, jobs in sectors that support aviation or use aviation, etc. Payroll wages paid to workers employed in the aviation industry or workers who support or use the aviation industry. Output value of goods sold, value of services sold, capital expenditures, spending by visitors, operating budgets for aviation-dependent government agencies, etc. Multiplier effect respending of dollars attributed directly or indirectly to an airport. Quasi-economic loosely associated economic facts (usually collected through surveys). Qualitative economic impacts related to safety, agriculture, medical uses, protection of open space, pest control, fire control, recreation, access to the national aviation system, military, wildlife management, disaster relief, traffic reporting, search and rescue, etc. 11
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