Airports' Economic Impact Grows as Federal Support Wanes

AIN Air Transport Perspective » March 5, 2012
John F. Kennedy International Airport
John F. Kennedy International, above, and Newark Liberty International airports in the New York City metropolitan area reported record international passenger traffic in 2011. (Photo: Port Authority of New York and New Jersey)
March 1, 2012, 5:06 PM

U.S. commercial airports combined rank as the nation’s second largest employer after Wal-Mart, directly supporting 1.3 million jobs in 2010, according to a study commissioned by the Airports Council International-North America (ACI-NA). The 490 airports analyzed supported 10.5 million jobs overall, accounting for an annual payroll of $365 billion and $1.2 trillion in economic output, which includes airport activities, visitor spending and construction.

The economic impact study prepared by consulting firm CDM Smith for the ACI-NA shows dramatic growth since researchers conducted the last such analysis in 2001. The new study shows a 56-percent increase in jobs, a 92-percent increase in payroll and double the economic output. “Airports have continued to grow in importance to the national economy even during the recent economic turmoil, as airport and airport-related industries have added jobs and increased revenues within their communities over the past decade,” Greg Principato, ACI-NA president, said February 29 during a web conference announcing the study results.

Even as airports have become major economic hubs, however, the ACI-NA expressed alarm about diminishing federal support for airport capital projects. The Obama Administration’s Fiscal Year 2013 budget proposal, released February 13, would reduce Airport Improvement Program (AIP) grants by $926 million, to $2.4 billion. “The budget focuses federal grants to support smaller commercial and general aviation airports that do not have access to additional revenue or other outside sources of capital,” according to the White House. “At the same time, the budget would allow larger airports to increase non-federal passenger facility charges (PFCs), thereby giving larger airports greater flexibility to generate their own revenue.”

Meanwhile, long-delayed FAA reauthorization legislation, passed by the Congress and signed into law by President Obama on February 14, reduces the authorized level of AIP funding from $3.7 billion to $3.3 billion. But it does not provide for increasing the maximum $4.50-per-flight segment PFCs airports use to help fund capital projects.

Principato said ACI-NA members have documented more than $80 billion in needed infrastructure projects over the next five years to meet the projected demand for airport services. “There is not an appreciation of the need to invest in airports here in Washington in either the legislative or the executive branch,” he said. Janet Kavinoky, U.S. Chamber of Commerce executive director for transportation, said the reauthorization bill cut federal support for airport improvements but “did nothing to empower local airports to raise their own revenues.”

 

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