The Economic Contribution of the Aviation Industry to Alaska’s Economy A component of the Alaska Aviation System Plan Prepared for: Alaska Department of Transportation and Public Facilities Prepared by: Northern Economics, Inc CDM Smith 800 E Dimond Boulevard, Suite 3-300 14 Wall Street, Suite 1702 Anchorage, AK 99515 New York, New York 10005 (907) 274-5600 As subconsultants to: DOWL 4041 B Street Anchorage, Alaska 99503 (907) 562-2000 June 2019 Contents Section Page Executive Summary ................................................................................................................... 1 Introduction .............................................................................................................................. 1 Alaska’s Unique Aviation Role .............................................................................................................. 1 Alaska’s Airport System ......................................................................................................................... 1 Report Content/Methods ...................................................................................................................... 2 Economic Contribution of the Aviation Industry ........................................................................... 3 Economic Activity ................................................................................................................................... 3 Employment ........................................................................................................................................... 8 Airports: Providing Access ....................................................................................................... 11 Alaska’s Aviation Lifeline ................................................................................................................... 11 Enplanements ..................................................................................................................................... 13 Cargo ................................................................................................................................................... 14 Air Travel by Trip and Purpose ........................................................................................................... 17 Case Studies ........................................................................................................................... 20 Medical and Healthcare ..................................................................................................................... 20 Access to Healthcare in Alaska ................................................................................................... 20 Alaska Hospitals and Clinics ....................................................................................................... 20 Air Ambulance Aircraft ................................................................................................................. 24 Cost of Medical Flights ................................................................................................................ 26 Air Medical Operators in Alaska .................................................................................................. 27 ADOT&PF Healthcare Priorities ................................................................................................... 29 Medical and Healthcare Summary ............................................................................................. 30 Tourism and Remote Access ............................................................................................................. 30 Alaska Tourism Statistics ............................................................................................................ 31 Accessing Alaska’s Parks and Recreation Areas ....................................................................... 36 Tourism Air Taxi ............................................................................................................................ 41 Air Taxi Companies....................................................................................................................... 43 Tourism and Remote Access Summary ...................................................................................... 45 Cargo ................................................................................................................................................... 45 Air Cargo Industry Trends ............................................................................................................ 46 Intra-State Cargo and Mail in Alaska .......................................................................................... 47 Unique Aspects of Cargo in Alaska ............................................................................................. 51 Air Cargo Summary ...................................................................................................................... 52 Value of Alaska Bypass Service and Essential Air Service ........................................................... 54 Alaska Bypass Service ....................................................................................................................... 54 Essential Air Service ........................................................................................................................... 57 Interactions between EAS and Alaska Bypass Service .................................................................... 60 Trends in Aviation and Technology ............................................................................................ 61 Aviation Activity Trends ...................................................................................................................... 61 Aircraft Operations ....................................................................................................................... 61 Page i Passenger Enplanements ........................................................................................................... 63 Air Cargo ....................................................................................................................................... 65 Aircraft Shipments and Age of Fleet ........................................................................................... 67 Pilot Population ............................................................................................................................ 69 Technology Trends .............................................................................................................................. 72 NextGen ........................................................................................................................................ 72 Weather Reporting in Alaska ....................................................................................................... 74 Wide Area Augmentation System ................................................................................................ 76 Unleaded Aviation Fuel ................................................................................................................ 77 Trends Summary ................................................................................................................................ 78 Looking Ahead ........................................................................................................................ 79 Future Challenges for the Aviation Industry ...................................................................................... 79 Airport Grades and Improvements Needed ...................................................................................... 80 Future Travel ....................................................................................................................................... 81 Conclusions ............................................................................................................................ 82 Economic Output ................................................................................................................................ 82 Employment ........................................................................................................................................ 82 Rural Alaska ........................................................................................................................................ 82 Methodology ........................................................................................................................... 84 Aviation Activity Data .......................................................................................................................... 84 Survey Methodology ........................................................................................................................... 84 ADOT&PF Business/Leaseholder Survey ................................................................................... 84 Public Airports Survey .................................................................................................................. 85 Private Airports Survey................................................................................................................. 85 Alaska Resident Travel Survey .................................................................................................... 86 Economic Impact Analysis ................................................................................................................