THE ECONOMIC IMPACT OF AVIATION IN PENNSYLVANIA STUDY OCTOBER 2011 Prepared for: Prepared by: THE PENNSYLVANIA DEPARTMENT OF WILBUR SMITH ASSOCIATES, INC. TRANSPORTATION BUREAU OF AVIATION 6600 Clough Pike Cincinnati, Ohio 45244 513-233-3700 With assistance from: PARSONS BRINCKERHOFF TABLE OF CONTENTS ECONOMIC IMPACT ANALYSIS OF PENNSYLVANIA AIRPORTS INTRODUCTION ............................................................................................................. 1 STUDY SUMMARY ......................................................................................................... 2 SOCIOECONOMIC OVERVIEW OF PENNSYLVANIA ................................................... 9 Population ................................................................................................................. 9 Gross State Product and Industry Mix ..................................................................... 13 Employment ............................................................................................................ 14 Per Capita Personal Income .................................................................................... 16 Summary ................................................................................................................. 16 STUDY APPROACH ..................................................................................................... 16 The Economic Modeling Process ............................................................................ 17 Data Requirements for the Economic Modeling Process ......................................... 18 Surveys, Data Collection Methods, and Model Assumptions ................................... 20 Airport Operations and On-Airport Activities ......................................................... 20 Commercial Service Visitors ................................................................................. 21 General Aviation Visitors ...................................................................................... 26 Study Multipliers – Multiplier Impacts .................................................................... 27 EMPLOYMENT, PAYROLL, AND OUTPUT IMPACTS FOR STUDY AIRPORTS .................................................................................................................... 28 Employment Impacts ............................................................................................... 29 Employment from On-Airport Activity .................................................................... 29 Employment from Off-Airport Activity at PHL and PIT ........................................... 30 Employment from Commercial Service Visitor Spending ...................................... 31 Employment from General Aviation Visitor Spending ............................................ 31 Total Employment ................................................................................................. 32 Payroll Impacts ........................................................................................................ 32 Payroll from On-Airport Activity ............................................................................. 32 Payroll from Off-Airport Businesses at PHL and PIT ............................................. 33 Payroll from Commercial Service Visitor Spending ............................................... 33 Payroll from General Aviation Visitor Spending..................................................... 34 Total Annual Payroll ............................................................................................. 34 Output Impacts ........................................................................................................ 35 Output from On-Airport Activity and Businesses ................................................... 35 Output from Off-Airport Businesses at PHL and PIT ............................................. 35 Output from Commercial Service Visitor Spending ............................................... 36 Output from General Aviation Visitor Spending ..................................................... 36 Total Annual Output .............................................................................................. 36 ADDITIONAL AREAS OF ECONOMIC BENEFIT ......................................................... 37 Off-Airport Aerospace Manufacturing Impacts ......................................................... 37 Off-Airport Air Cargo Activity Impacts ...................................................................... 38 Value Added Benefits from Off-Airport Aviation Dependent Businesses .................. 39 Dependence on Commercial Service Aviation ...................................................... 40 Dependence on General Aviation ......................................................................... 40 Dependence on Air Cargo .................................................................................... 41 Dependence on Airports ....................................................................................... 41 Commercial Service Passengers Business Travel ................................................ 42 Wilbur Smith Associates, Inc. i Air Ambulance Use on Airports ................................................................................ 43 Qualitative Airport Benefits ...................................................................................... 44 ECONOMIC IMPACT SUMMARY ................................................................................. 45 APPENDIX A: INCORPORATING PREVIOUS AIRPORT ECONOMIC IMPACT STUDIES Introduction ................................................................................................................. A-1 Economic Update Approach ........................................................................................ A-1 Economic Impact Update Process ............................................................................... A-1 Philadelphia International Airport ........................................................................... A-1 Pittsburgh International Airport .............................................................................. A-3 Allegheny County Airport ....................................................................................... A-3 Updated Total Economic Impacts for Airports with Existing Economic Impact Studies ........................................................................................................................ A-4 Summary ..................................................................................................................... A-4 APPENDIX B: ECONOMIC IMPACT TABLES APPENDIX C: AIRPORT VALUATION ANALYSIS Methodology ............................................................................................................... C-1 Infrastructure Facility Analysis ..................................................................................... C-3 Airport Valuation Results ............................................................................................. C-5 APPENDIX D: STATUS OF MCVILLE AIRPORT APPENDIX E: PENNSYLVANIA AIRPORT ECONOMIC IMPACT 2000 VS. 2010 VARIANCES Introduction ................................................................................................................. E-1 Commercial Service Airports ....................................................................................... E-4 General Aviation Airports ............................................................................................ E-4 APPENDIX F: AIRPORT SUMMARIES LIST OF FIGURES Figure 1: Pennsylvania Airports Included in Economic Impact Analysis........................... 3 Figure 2: 2000-2010 Pennsylvania Population Growth .................................................. 11 Figure 3: 2010-2020 Pennsylvania Population Growth Forecast ................................... 12 Figure 4: Pennsylvania Counties with Marcellus Shale .................................................. 25 Figure 5: Economic Sectors of Respondent Businesses ............................................... 40 LIST OF TABLES Table 1: Total Economic Impacts for Pennsylvania Airports ............................................ 4 Wilbur Smith Associates, Inc. ii Table 2: Pennsylvania Gross State Product by Industry for 2010 .................................. 14 Table 3: Pennsylvania Employment by Industry for 2009 .............................................. 15 Table 4: Enplanements & Percent Visitors at Pennsylvania Commercial Service Airports – 2010 ................................................................................................ 22 Table 5: Pennsylvania IMPLAN Multipliers by Economy Sector .................................... 28 Table 6: Pennsylvania On-Airport Employment ............................................................. 30 Table 7: Pennsylvania Employment from Off-Airport Businesses at PHL and PIT ......... 30 Table 8: Pennsylvania Employment from Commercial Service Visitor Spending ........... 31 Table 9: Pennsylvania Employment from General Aviation Visitor Spending ................. 31 Table 10: Pennsylvania Total Airport Employment ........................................................ 32 Table 11: Pennsylvania On-Airport Activity Payroll ........................................................ 32 Table 12: Pennsylvania Payroll from Off-Airport Businesses at PHL and PIT ................ 33 Table 13: Pennsylvania Annual Payroll from Commercial Service