A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Kupfer, Franziska; Lagneaux, Frédéric Working Paper Economic Importance of Air Transport and Airport Activities in Belgium NBB Working Paper, No. 158 Provided in Cooperation with: National Bank of Belgium, Brussels Suggested Citation: Kupfer, Franziska; Lagneaux, Frédéric (2009) : Economic Importance of Air Transport and Airport Activities in Belgium, NBB Working Paper, No. 158, National Bank of Belgium, Brussels This Version is available at: http://hdl.handle.net/10419/144370 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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The aim is therefore to provide a platform for discussion. The opinions expressed are strictly those of the authors and do not necessarily reflect the views of the National Bank of Belgium. Orders For orders and information on subscriptions and reductions: National Bank of Belgium, Documentation - Publications service, boulevard de Berlaimont 14, 1000 Brussels Tel +32 2 221 20 33 - Fax +32 2 21 30 42 The Working Papers are available on the website of the Bank: http://www.nbb.be © National Bank of Belgium, Brussels All rights reserved. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. ISSN: 1375-680X (print) ISSN: 1784-2476 (online) 2 NBB WORKING PAPER No. 158 - MARCH 2009 Abstract This study is a publication issued by the Microeconomic Analysis service of the National Bank of Belgium, in partnership with the Department of Transport and Regional Economics of the University of Antwerp (UA). It is the outcome of a first research project on the Belgian airport and air transport sector. The former relates to the economic activities within the airports of Antwerp, Brussels, Charleroi, Kortrijk, Liège and Ostend, while the latter concentrates on the air transport business as a whole. In the past few years, the logistics business has come to play a significant part in income creation in our country, whose economy is to a large extent driven by services1. Air transport and airports in particular are driving forces in this context, not only in terms of business generated within the air transport cluster, but also in terms of airports' attractiveness. On world scale an overall growth of cargo and passengers could be observed in the last ten years. However, the air transport sector has undergone a major crisis during the 2001-2003 period, when passenger traffic numbers first fell sharply and then stagnated. Only after 2003 this activity has picked up again and this until the third quarter of 2008. Cargo traffic on its part recovered already in 2002. In Belgium, a similar evolution can be observed. It should be stressed however that between 1997 and 2007 cargo volumes grew much faster than passenger traffic did. The rankings of European airports underline the importance of cargo traffic for Belgium: In 2006 Brussels, Liège and Ostend-Bruges respectively occupy ranks 6, 8, and 20 in the European cargo airport top 20, while for passenger airports, Brussels can only be found at the end of the top 20. In this study, a sectoral approach has been followed by focusing, for every airport, on two major economic activity components: the air transport cluster on the one hand and other airport-related sectors on the other hand. In that respect, annual accounts data from the Central Balance Sheet Office were used for the calculation of direct effects, the social balance sheet analysis and the study of financial ratios. Due to an inevitable time lag in the data provision, the analysis was limited to 2006. Like in other sectoral studies published by the Bank, indirect effects have also been estimated on the basis of data from the National Accounts Institute. In 2006, the total activities under review –direct and indirect, inside and outside airports- accounted for roughly 6.2 billion euro, i.e. 2 p.c. of Belgium's GDP and domestic employment. Considering the direct effects only, these percentages both amounted to 0.8 p.c. The three major airports, i.e. Brussels, Charleroi and Liège, alone account for 95.2 p.c. of the direct value added generated by the six airports under review. They represent 0.5 p.c. of Belgian GDP and, taking account of the indirect effects, 1.1 p.c. of the national income. Furthermore, it has to be pointed out that most Belgian airports are specialised. While the airports of Liège and Ostend focus on air cargo, 1 See Working Paper No.125, Lagneaux (2008) NBB WORKING PAPER No. 158 - MARCH 2009 Charleroi Airport deals mostly with low-cost passenger transport. Moreover, the smaller regional airports like Antwerp and Kortrijk focus on business travel. The analysis was completed in December 2008. JEL classification: C67, D40, J21, L93, R15, R34 and R41. Keywords: air transport, airport activities, sector analysis, indirect effect, public investments NBB WORKING PAPER No. 158- MARCH 2009 Corresponding author: UA, Department of Transport and Regional Economics, e-mail: [email protected] ¶NBB, Microeconomic Information Department, e-mail: [email protected] Research results and conclusions expressed are those of the authors and do not necessarily reflect the views of the National Bank of Belgium or any other institution to which the authors are affiliated. All remaining errors are ours. The authors would like to thank Mr Dresse from the NBB Research Department, Mr Van Waeyenberge from the NBB Statistics Department, their colleagues from the NBB Microeconomic Analysis team - Messrs Dufresne and van Gastel -, of the UA Department of Transport and Regional Economics - Prof. Dr. Meersman, Van De Voorde, Verhetsel and Dr. Vanelslander - and of the NBB regional branches - Messrs Beele, De Geyter, Haenecour, Muylaert and Victor -, the airport operating companies, the Airport division of the Flemish Ministry of Mobility and Public Infrastructure, the Walloon Airport Authority SOWAER, the Flemish Airport Commission, the Association of Belgian Tour Operators, the CIRIEC and ULg University for their help, advice and monitoring of this study. NBB WORKING PAPER No. 158 - MARCH 2009 TABLE OF CONTENT Foreword ............................................................................................................... 1 Introduction ........................................................................................................... 1 1 Definitions and methodology ....................................................................... 9 1.1 Definitions .................................................................................................................. 9 1.2 Methodology ............................................................................................................ 11 1.2.1 Classification of activities ....................................................................................................................... 11 1.2.2 Selection of firms for the sample population .......................................................................................... 13 1.2.3 Geographical distinction ......................................................................................................................... 16 1.2.4 Direct effects .......................................................................................................................................... 17 1.2.5 Indirect effects ........................................................................................................................................ 18 1.2.6 Induced and catalytic effects .................................................................................................................. 19 2 Economic Importance of air transport and airport activities ................... 21 2.1 Passenger and freight activities ............................................................................ 21 2.1.1 Passengers: recent developments