The Buzz

1.15.21

Why Air Travel is Key to our Economic Recovery

Travel is essential to the American economy and provides an indispensable source for job creation. According to the U.S. Travel Association, the travel industry is America’s seventh-largest employer. It supports a total of 15.6 million domestic jobs, and directly employs 8.8 million workers in every corner of the country, from coastal cities through the heartland.

Improved access to/from ICT will bring more visitors to Kansas, supporting hotels, restaurants, ground transportation providers, and a variety of businesses. However, COVID has had a devastating impact on passenger traffic. Based on TSA throughput, ICT’s passenger volume is down 55% for the year. That’s over 482,000 fewer passengers flying out of ICT than last year. Until air travel increases, our economy will be slow to recover. As the COVID vaccine is distributed, it is expected that air travel will rebound starting in the last half of 2021, but not to 2019 record levels for several years.

COVID has changed travel habits. Government/corporate business is now conducted remotely, meaning that employees can take calls from their main homes or from a leisure destination. The focus for airline expansion has switched to leisure markets, particularly to the Southeast and Florida, mountain areas, Las Vegas, Phoenix, Mexico and the Caribbean.

In 2019 we identified eight new nonstop destinations to pursue. A high priority was improving access to the northeast and southeast regions. Those regions produce 32% of ICT’s travel demand, but there are only 9% of flights allocated to that part of the country. New York, Washington, DC, and Charlotte were among those goal destinations. COVID has decimated flights out of New York and Washington, DC. However, Charlotte, American’s second largest hub, remains strong with 526 daily flights. Charlotte would greatly improve access to the popular Southeast region, as well as up and down the East Coast. Competition to the east/southeast will lower fares and stimulate demand.

The Airports Council International-North America conducted an economic impact study of commercial airports in 2017. Using data from more than 140 state and individual airport economic impact reports, this analysis found that the 493 commercial airports in the United States:

  • Support 11.5 million jobs
  • Create an annual payroll of $428 billion
  • Produce an annual output of $1.4 trillion
  • America’s airports account for more than 7 percent of U.S. GDP

There are seven commercial airports in Kansas. In 2017, these airports supported 35,000 jobs, produced $1,987,000,000 in payroll, and produced a total economic output of $7,938,000,000.

Direct Impacts

More than 1.2 million jobs are found at the nation’s commercial airports. Visitor spending supports another nearly 4.4 million jobs, while construction work employed 68,000 workers in 2017 at these airports. Economic output from these airports approaches $277 billion annually. Visitors that use these airports spend nearly $256 billion annually, while construction projects add another $16 billion to the national economy.

Multiplier Impacts

Multiplier impacts result from the recirculation of direct impacts. For example, as airport employees spend their salary for housing, food, and services, those expenditures circulate through the local economy resulting in increased spending, payroll, and employment throughout the economy.

As can be seen, the multiplier impacts generate billions of dollars of economic output and support millions of jobs. U.S. Totals –

  • Employment: 5,743,000
  • Payroll: $247,225,000,000
  • Output: $857,809,000,000

Total Impacts

Combined effects of direct and multiplier impacts in the U.S. –

  • Employment: 11,450,000
  • Payroll: $428,356,000,000
  • Output: $1,406,713,000,000

The total output of commercial airports in the United States of $1.4 trillion is a significant component of the U.S. economy. When compared to the U.S. gross domestic product (GDP) of $19.4 trillion, impacts related to commercial airports contribute 7.2 percent of the total GDP. The 11.4 million workers that depend upon commercial airports and their related activity comprise 7.1 percent of the U.S. workforce, which reached 161 million workers at the end of 2017.

Airlines stimulate business through direct and indirect commerce, support economies through taxes and infrastructure investments and provide job opportunities in aviation and other industries. Additionally, airlines work with local charities and volunteer groups to give back to the communities in which they work and live.

The health of the industry is inextricably linked with that of the economy – as airlines do well, they also invest in their product and infrastructure, including new planes, customer amenities and airport expansion or renovation. Facts and figures from the 2019 airline industry:

  • 750,000 direct employees
  • Carry 2.5M passengers per day to/from nearly 80 countries
  • 28,000 flights per day across the globe
  • 58,000 tons of cargo per day to/from more than 220 countries

Let’s hope the travel industry rebounds soon.