10 Facts Every Aviation Professional Should Keep Handy
Airport economics: how much value does a hub really hold? From London to Sydney, the primary argument for airport expansion is always economic, usually through increased number of jobs and billions pumped into the regional economy. But how does a hub airport rake in money, and how does it trickle down into the wider economy?
Airports are attractive nuisances or critical public utility or economic engine or a hated source of noise/pollution. The battles over CO2 and the conflicts over NextGen implementation on a local basis have focused on the failings of airports and airlines. Aviation’s negative aspects seem to have influenced public opinion about aviation.
It is hard for the businesses which fly passengers around the globe for pleasure and work to tell their own stories. Their critics assert that their numbers are suspect and attack all of the economics behind their positive projections.
Now, fifteen hundred words of analyses, written by Oxford Economics, the Massachusetts Institute of Technology, the University of North Carolina, the Global Trade Review, other experts and critics lay out, with convincing details, a substantial positive assessment. Here are a few salient conclusions:
- “The aviation sector is one of the biggest drivers to the global economy, supporting nearly 63 million jobs and providing $2.7 trillion in GDP.”
- “…for every ten jobs directly supported by the UK aviation industry, another 26 are supported indirectly in the supply chain”.
- “Research done by Massachusetts Institute of Technology (MIT) in 2013 also found that over 50% of Fortune 500 headquarters are located within ten miles of a hub airport, and 84% of headquarters located within just 20 miles.”
- “…when Iceland’s Eyjafjallajökull volcano erupted, the chaos that followed heavily impacted the country’s aviation services. During that period, around 10 million passengers were disrupted and over 100,000 flights cancelled, which amounted to a loss of $5bn in Iceland’s lost GDP over the course of just one month.”
- “In Europe, the combined direct, indirect and induced employment generated by airports is estimated at nearly 4.5 million jobs, earning a total of €146.9bn in income through wages, salaries, bonuses and other remuneration.”
- “A study compiled for ACI Europe in 2015 splits their contribution into direct, indirect, induced and catalytic economic impact, all revolving around the number and types of jobs they support. The direct jobs, such as airport operators, air traffic control, ground handlers, security, immigration, customs and aircraft maintenance, are also accompanied by wholesalers, oil refining activities for jet fuel, companies providing accounting and legal services to airlines, travel agents and so on. Overall, the study found that a 10% increase in connectivity was associated with an increase in GDP per capita of 0.5%.”
- “The world’s best known and biggest hub airport is undoubtedly Dubai International (DXB), which welcomed 51 million passengers during the first seven months of the year, a 6.2% increase compared to last year…Professor John Kasarda of University of North Carolina’s Business School described Dubai as a ‘global aviation hub with a city-state attached’.”
- “DXB opens up foreign markets to exports from the United Arab Emirates (UAE), lowers transport costs, particularly over long distances, and increases the flexibility of labour supply. It is estimated that a 10% improvement in connectivity relative to GDP would see a $444m increase per year for the UAE economy.”
- “Australia’s Sydney Airport offers a breakdown of the airport’s contribution as well: $10bn from the activities of businesses operating on the airport grounds and $20bn from tourism and freight amounted to 2.0% of Australia’s GDP.”
- A lengthy, balanced discussion of Heathrow’s 3rd runway.
A useful set of facts every aviation professional should keep handy.
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