Regional Economic Impact of Philadelphia International Airport | Final

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Regional Economic Impact of Philadelphia International Airport | Final REGIONAL ECONOMIC IMPACT OF PHILADELPHIA INTERNATIONAL AIRPORT FINAL REPORT – March 2017 FINAL REPORT SUBMITTED TO: Philadelphia International Airport FINAL REPORT SUBMITTED BY: Econsult Solutions, Inc. 1435 Walnut Street, 4th Floor Philadelphia, PA 19102 REGIONAL ECONOMIC IMPACT OF PHILADELPHIA INTERNATIONAL AIRPORT | FINAL ii TABLE OF CONTENTS Table of Contents............................................................................................................................. ii Executive Summary ........................................................................................................................ iv 1.0 Introduction and Methodology ........................................................................................ 12 1.1 About Philadelphia International Airport (PHL) ..................................................... 12 1.1.1 Airport Service Area .................................................................................................. 12 1.1.2 Airport Facilities .......................................................................................................... 14 1.1.3 Flight Activity .............................................................................................................. 17 1.2 The Economic Importance of the Airport to the Region ..................................... 19 1.3 Economic and Fiscal Impact Methodology .......................................................... 20 1.3.1 Data and Methods for Estimating Direct Economic Activity ............................... 20 1.3.2 Input-Output Modeling ............................................................................................. 21 1.3.3 Fiscal Impacts ............................................................................................................. 23 1.3.4 Comparability with Previous Analysis ...................................................................... 23 1.3.5 About Econsult Solutions, Inc. .................................................................................. 26 2.0 Capital Investments ............................................................................................................ 27 2.1 Direct Capital Investments ....................................................................................... 27 2.2 Regional Economic Impact from Capital Investments ........................................ 30 2.3 Implications of Onsite Capital Investments ............................................................ 31 3.0 Aviation Division Operations.............................................................................................. 33 3.1 Direct Aviation Division Operating Expenditures ................................................... 33 3.2 Economic Impact from Aviation Division Operations .......................................... 34 3.3 Implications of Aviation Division Operating Impact ............................................. 35 4.0 Airline Operations ................................................................................................................ 37 4.1 Direct Airline Operating Expenditures ..................................................................... 39 4.2 Economic Impact from Airline Operations ............................................................ 41 4.3 Implications of Airline Operations ............................................................................ 42 5.0 Airport-Related Operations ............................................................................................... 44 5.1 Direct Airport-Related Operating Expenditures .................................................... 44 5.1.1 Government ............................................................................................................... 45 5.1.2 Onsite Retail ................................................................................................................ 46 5.1.3 Parking ......................................................................................................................... 46 5.1.4 Ground Transportation .............................................................................................. 47 5.1.5 Hospitality .................................................................................................................... 47 5.1.6 General Aviation ........................................................................................................ 48 5.1.7 Cargo, Freight and Mail ............................................................................................ 48 5.1.8 Office and Commercial ........................................................................................... 49 5.1.9 Aviation Manufacturing ............................................................................................ 50 5.2 Economic Impact from Airport-Related Operations ............................................ 51 5.3 Implications of Airport-Related Operatng Activity ............................................... 52 Econsult Solutions | 1435 Walnut Street, Ste. 400 | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com REGIONAL ECONOMIC IMPACT OF PHILADELPHIA INTERNATIONAL AIRPORT | FINAL iii 6.0 Regional Tourism ................................................................................................................. 53 6.1 Direct Regional Tourism Expenditures Attributable to the Airport ....................... 53 6.1.1 Visitor Spending .......................................................................................................... 53 6.1.2 Travel Arrangement Industry .................................................................................... 55 6.2 Economic Impact from Regional Tourism .............................................................. 56 6.3 Implications of Regional Tourism Activity ............................................................... 57 7.0 Resident Travel Benefits ...................................................................................................... 58 7.1 Resident Travel Time and Cost Savings ................................................................... 58 7.2 Economic Impact from Resident Travel Benefits ................................................... 61 7.3 Implications from Resident Travel Benefits ............................................................. 62 8.0 Catalytic Economic Growth Effects ................................................................................. 63 8.1 Trade Activity and Connections .............................................................................. 63 8.2 Business Location and Investment .......................................................................... 64 8.3 Business Efficiency and Productivity ........................................................................ 65 8.4 Empirical Connection Between Air Service and Economic Growth .................. 66 8.5 Implications of Catalyic Effects ............................................................................... 67 9.0 Aggregate Economic and Fiscal Impact........................................................................ 68 9.1 Aggregate Economic Impact ................................................................................. 68 9.2 Economic Impact by Geography ........................................................................... 69 9.3 Industry Distribution of Aggregate Employment Impact ..................................... 70 9.4 Aggregate Fiscal Impact.......................................................................................... 71 9.5 Conclusion .................................................................................................................. 72 Appendix A – Detailed Economic and Fiscal Impact Methodology ........................................ i Appendix B – Additional Detail on Airport-Related Operations Calculations ....................... iv Appendix C – Additional Detail on Regional Tourism Expenditure Calculations ................. xiii Appendix D – Additional Detail on Resident Travel Time and cost Savings Calculation .. xxii Appendix E – Additional Detail on Modeling the Distribution of Economic Activity by County .......................................................................................................................................... xxvi Appendix F – Economic Impact Results by County and State ............................................. xxx Econsult Solutions | 1435 Walnut Street, Ste. 400 | Philadelphia, PA 19102 | 215.717.2777 | econsultsolutions.com iv REGIONAL ECONOMIC IMPACT OF PHILADELPHIA INTERNATIONAL AIRPORT | FINAL EXECUTIVE SUMMARY This report describes and quantifies multiple dimensions of economic and fiscal impact from the Airport System consisting of Philadelphia International Airport (“PHL”) and the Northeast Philadelphia Airport (“PNE”) on the Philadelphia region. PHL and PNE are owned by the City of Philadelphia and operated by the City’s Division of Aviation on a self-sustaining basis without any local tax dollars. PHL serves more than 30 million commercial passengers annually, and offers approximately 500 daily flights to more than 120 national and international non-stop destinations. The economic benefits enabled by PHL can be conceptualized as starting with direct onsite activity and radiating outwards to the entire Greater Philadelphia region: Narrowly, PHL is a center of significant direct economic activity and employment as initiators of capital
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