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KENTUCKY STATEWIDE AVIATION SYSTEM PLAN
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7 Economic Evaluation – Direct Impacts
Aviationisanintegralpartoftheworld’seconomy.Countrieswithrobustairtransportationsystemsbenefitfromtheefficienciesthatairtravelprovides.ThesameistrueintheU.S.atthestateandregionallevel–airportsandthelinkagestheyprovidehelptodriveeconomiesinthosestates.TheCommonwealthofKentucky’ssystemof59publicly‐owned,public‐useairportsareessentialtothestate’stransportationandeconomicinfrastructure,supportingitsdiversifiedindustriesincluding,butnotlimitedto,manufacturing,distribution,aerospacetechnology,agriculture,healthcare,andthoroughbredhorseracing.AirportsconnecttheCommonwealth’scitizensandbusinessestotherestofthestate,ournation,andtheglobaleconomy,andserveasanimportantlinkforalmosteveryKentuckian,regardlessofwheretheylive.Airportsarethe“frontdoor”tocommunitiesandprovidecompaniesefficientaccesstotheiremployeesandfacilities.AirportsalsoprovideagatewayforvisitorsandtouriststotheAppalachianMountains,horseparksandhorsefarms,world‐classgolfcourses,andthehundredsofhistoric,recreational,andeducationalsitesincommunitiesthroughoutthestate.
Kentucky’sairportsareamajorcatalysttothestate’sgrowingeconomy.Inordertobetterunderstandtheeconomicbenefitofairportsstatewide,theKentuckyTransportationCabinetDepartmentofAviation(KDA)completedthiseconomicevaluationtoquantifytheon‐airportactivitiesfoundatsystemairports.Itisimportanttonotethatunlikeafulleconomicimpactanalysis,thissectionoftheSystemPlanonlyestimatestheon‐airportemploymentandpayrollgeneratedbyKentucky’sairportsandtheirbusinessandgovernmenttenants.Novisitor,multiplier,oron‐airportconstructionimpactswereincluded.Morespecifically,onlytheemploymentandpayrollimpactsdirectlysupportedbyairportmanagementandaviation‐relatedbusinessesandpublicsectortenantslocatedattheairportswereconsidered.Directeconomicactivity(output)impactswerenotcalculated.TheevaluationdidnotestimatethespendinggeneratedbyvisitorsarrivingintheCommonwealthoncommercialserviceorgeneralaviationaircraft.Nordidtheevaluationestimatetherippleeffectsassociatedwiththere‐spendingofdirectimpactswithintheCommonwealth’seconomy.Itshouldbenotedthatifon‐airportconstructionimpacts,visitorimpacts,andmultiplierimpactswereincludedinthisevaluation,theeconomicimpactsofthestate’sairportsystemwouldbesignificantlylargerthanwhatisreportedinthischapter.TheKYTCisconsideringafollow‐onstudytocalculatethecompleteeconomicimpactoftheCommonwealth’sairportsystem.
Methodology ThisanalysisfollowsaprovenFederalAviationAdministration(FAA)approvedmethodologyofdatacollectionandestimatingimpactsthathasbeenusedthroughoutthecountry.Thedirecteconomicimpactisquantifiedintermsofemploymentandpayroll.Whenacompleteeconomicimpactstudyiscompleted,outputwillalsobeestimated.Outputrepresentsspendingoreconomicactivityandaccountsforthevalueofaviation‐relatedactivitiesoccurringonthestudyairports.
Inafullairporteconomicimpactstudy,theeconomicimpactsoftheairportsarecalculatedusinganinput‐outputmodelingprocess,wherethemodelaccountsfortherelationshipofproductioninputsamongvariousindustrysegmentswhenmodelingtheoutputsofthoseindustries.Theinput‐outputmodeldescribesthreetypesofimpacts,eachofwhichareestimatedseparately:directimpacts(inputstotheeconomicmodel),multiplierimpacts(outputoftheeconomicmodel),andtotalimpacts.Asexplainedpreviously,however,forthisanalysistheKDAdesiredtoestimateonlythedirectimpactsoftheKentuckyairportsystem.Therefore,onlytheinputportionoftheinput‐outputmodelingprocess,theestimationofdirectimpacts,wasemployedinthisstudy.
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Directimpactsoriginatefromon‐airportactivityandaccountfortheinitialpointwheremoneyfirststartscirculatingintheeconomy.On‐airportactivityincludesthebenefitsassociatedwithbusinessesandgovernmentagencieslocatedattheairportdirectlyrelatedtotheprovisionofaviationservices.Thesebusinessesincludefixedbaseoperators(FBOs),flightschools,airlines,andaircraftrepairfacilitiesandpublicsectortenantssuchasairportmanagement,theFAA,lawenforcementaviationunits,andtheTransportationSecurityAdministration(TSA).
Impactscalculatedinclude:
Employment–Employmentisbasedonthetotaloffull‐timejobspluspart‐timejobs.Inthisanalysis,twopart‐timepositionsaretheequivalentofasinglefull‐timeposition.
Payroll–Payrollrepresentstheannualsalary,wages,andbenefitspaidtoallemployees.
Surveys,DataCollectionMethods,andAssumptionsAspreviouslynoted,anextensivedatacollectioneffortwasundertakentogatherinformationforthesystemplan.Thisincludeddatanecessarytoestimateemploymentandpayrollimpacts.Dataforon‐airportactivitywascollected,whichincludesairporttenantsthatarebusinesseswithemployees,suchasairlines,FBOs,flightschools,concessionaires,corporateflightdepartments,andaircraftmaintenanceproviders.Alsoincludedinthisgrouparegovernmentalagencies,suchaspublicairportsponsors,airtrafficcontrollers,otherFAAunits,theTSA,aswellasvariousotherlocal,state,andfederalagencies.
Themethodsusedtogatherinformationfromthesegroupsarediscussedintheensuingsection,alongwiththeassumptionsneededtoarriveatemploymentandpayrollimpacts.
On‐AirportActivityAirportsponsorsandmanagerswerecontactedviaasurveytoprovidenames,mailingaddresses,e‐mailaddresses,andtelephonenumbersforeachon‐airportbusinessandpublicsectortenant.Allairporttenantshavingaviation‐relatedemployeesonKentuckyairportsduring2015werecontactedtocollectinformationregardingtheireconomicactivity.SincethepurposeofthisanalysiswastomeasuretheemploymentandpayrollimpactsofeachKentuckyairportandtheactivitythatreliedontheairport,adistinctionwasmadebetweenthoseon‐airporttenantsthatdependedontheairportandthosethatdidnot.Forexample,atenantfarmerlocatedonanairportwouldnotbedesignatedasaviation‐relatedsincefarmingisnotairportrelated.Asurveywasprovidedtoeachaviation‐relatedtenantandfollow‐upcallsande‐mailsweremadetoobtainresponsesandtoverifyinformationonreturnedsurveys.Airporttenantsateachairportweregroupedinto28categoriestoaidinanalysis.Thesecategoriesconsistedof:
Aerialapplicators Airambulances Aircargo Aircraftmaintenance(piston) Aircraftmaintenance(turbine) Airlines(passengeronly) Airportmanagement(commercialservice) Airportmanagement(generalaviation)
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Airportmanagement(generalaviationwiththreeorlessfull‐timeemployees) Airtrafficcontrol(public,i.e.,FAA) Airtrafficcontrol(private) Charter Concessions(commercialserviceairports) Concessions(generalaviationairports) Corporateflightdepartments FBOs(fiveorlessfull‐timeemployees) FBOs(large) Federalgovernment(notincludingairtrafficcontrolorTSA) Flightinstruction Flightinstruction(professional) Groundtransportation Hangarrentalanddevelopment Military Nonprofit Parking RentalCar Stateandlocalgovernment TSA
Thesurveysenttoeachairporttenant,includingairportsponsorsandmanagers,requestedthefollowinginformation:
Typeofaviationactivityconductedbythetenant Numberoffull‐time,part‐time,andseasonalemployeesin2015 Estimatedtotalannualwagesandbenefitspaidtoemployeesin2015 Variousotherbusiness‐relateddata
Ahighresponseratewasdesiredfortheairportmanagementandtenantsurveys.Severalroundsoffollow‐upcallsande‐mailswerethereforemadetonon‐respondingentitiesandairportmanagerstoobtainthegreatestresponseratepossibleforon‐airportemployment.Forairporttenantswhodidnotprovidecompleteinformationonpayrollexpenditures,estimatesweredevelopedusingratiosofpayroll.Theseratiosweredevelopedfromsurveydataobtainedfromthosetenantsandbusinessesthatdidrespondtothesurvey.ForthosecategoriesoftenantsthatdidnothavesufficientKentuckydatatoprovidereliableaverages,additionaldatawasusedfromtheconsultant’sin‐housedatabasecompiledfromairporteconomicimpactstudiesconductedthroughouttheUS.
Employment and Payroll Impacts for Kentucky Airports Kentucky’sairportsaresignificantgeneratorsofjobsandpayroll.Thissectionpresentsthedirectemploymentandannualpayrollsupportedbyon‐airportactivityatKentucky’s59public‐useairports.Itisimportanttonotethattheseimpactsdonotincludecommercialserviceorgeneralaviationvisitorimpactsormultiplierimpacts.
EmploymentImpactsThisanalysisfoundthatairportsinKentuckyareanimportantsourceofjobs.Employment,asdefinedinthisanalysis,isbasedonfull‐timeequivalent(FTE)jobs,whichisasumoffull‐timejobsandpart‐timejobs.Inthisanalysis,twopart‐timepositionsaretheequivalentofonesinglefull‐
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timeposition.Employmentimpactswerecalculatedforon‐airportactivity.On‐airportactivityincludesprivatebusinessesandgovernmentorganizations.
PayrollImpactsThesalaries,wages,andbenefitspaidtotheemployeesdescribedaboveresultinasignificantannualpayrollbenefittotheKentuckyeconomy.Estimatesofthepayrollimpactsrelatedtothepreviouslyidentifiedemploymentimpactsassociatedwithon‐airportbusinessesandtheiractivitiesaredetailedinconjunctionwithemploymentimpactsbelow.
StatewideEmploymentandPayrollfromOn‐AirportActivityKentucky’son‐airportactivitycreate792jobsatgeneralaviationairportsand22,600jobsatcommercialserviceairports,foratotalof23,392FTEpositions.Themajorityoftheseon‐airportjobsarerelatedtoKentucky’scommercialserviceairlines(includingUPSandDHLaircargohubactivity).Theon‐airportpayrollassociatedwiththesejobsisover$49.1millionatgeneralaviationairportsandapproximately$1.39billionatcommercialserviceairports;atotalofover$1.4billion.Thesejobsandtheassociatedpayarenotevenlydistributedacrosson‐airportbusinesstypes.
MajorEmployersThethreelargestsingleemployersatKentuckyairportsareUPS,DHL,andtheKentuckyAirNationalGuard.UPS’WorldportHubatLouisvilleInternationalemploysnearly10,000withanestimatedpayrollofover$682million,whileDHLemploysover2,700withanestimatedpayrollofover$192millionatitsNorthAmericanHubatCincinnati/NorthernKentuckyInternational.ThepresenceoftheseaircargohubsinKentuckyareatestamenttoKentucky’sideallocationforlogisticsanddistribution,as75percentoftheU.S.populationiswithinatwo‐hourflightofLouisville,andafour‐hourflightallowsforaccessto95percentoftheU.S.population.ThesteadyincreaseintonnagethroughputattheseKentuckyaircargohubs,coupledwiththesignificantgrowthine‐commercedistributionfacilitiessurroundingtheseairportsmeansthattheaircargoindustrywillcontinuetobeamajorsourceofjobsandeconomicgrowthforKentuckywellintothefuture.
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TheKentuckyAirNationalGuard’s123rdAirliftWing,locatedatLouisvilleInternational,employsover815withanassociatedpayrollofover$64million.EquippedwitheightC‐130Herculesaircraft,theKentuckyAirNationalGuard’s123rdAirliftWingmissionistoprovideworldwidetheaterairliftforU.S.militaryandhumanitarianoperations.Afterthesethree,thereisasignificantdropofftothenextlargestairportemployers,whichincludeairlines,terminalconcessionaires,TSA,rentalcaroperators,andairportstaffing.Thelargestnon‐governmentormilitarybusinessonageneralaviationairportisSummitAviationatLakeCumberlandRegional,with40on‐airportemployeesaccountingforanestimatedpayrollofover$1.8million.
ImpactsRelatedtoUniqueAspectsofAviationinKentuckyAshighlightedinChapter5ofthisstudy,thereareseveraluniqueaspectsofaviationinKentucky:aviationeducation,agriculturalactivity,andaviationinmedicalcare.Theseaviationaspectsrepresentimportantservicesthathavepresencesbothonandoff‐airport,buteachpositivelyimpactKentuckyaviationinsomeway.
Aviationeducationalopportunitiesareavailableattheuniversity‐levelthroughprogramsatEasternKentuckyUniversity,UniversityofKentucky,andMoreheadStateUniversity,while37Kentuckyhighschoolsofferaviationcoursesoradedicatedaerospacecurriculum.YoutheducationprogramsareavailablethroughtheAviationMuseumofKentucky’scampsatBlueGrassAirport,andnumerousYoungEaglesprogramssponsoredbylocalExperimentalAircraftAssociation(EAA).Inaddition,29ofKentucky’s59airportshavebasedflighttrainingservicesandnearlyallairportssupportflighttrainingactivities.TheresultsoftheinventoryeffortfoundthatinKentuckythereare63on‐airportjobsrelatedtoflighttrainingwithover$9.4millioninassociatedpayroll.
Aviationhasaroleinsupportingthestate’sagriculturalsectorforpurposesincludingaerialapplicationandlivestocktransport.Eachyear,aircraftareusedforaerialseedingoraerialpesticideapplicationofKentucky’sfarmland,whichin2015produced$2.8billionworthoftotalcropproduction.Kentucky’sairportssupportenablefarmerstoaddresstheneedsoftheircropsefficientlyandeconomicallythroughaviation.
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Theequineindustry–oneofKentucky’smostrenownedandculturallysignificantindustries–isheavilyreliantuponaviationforthetransportationofitsproducts.SpecializedairtransportcompaniessuchasH.E.TexSuttonForwardingCompany,basedatBlueGrassAirport,movehorsesaroundtheworldusingdedicatedaircraftoftencalled“airstables.”Kentucky’shometo242,000horsesthatsupporta$1.1billionindustrywithmorethan40,000jobs.TwoofthetopfiveairportsintheU.S.involvedinhorsetransportationareinKentucky(LouisvilleInternationalAirportandBlueGrassAirportinLexington).1
Aviationisalsoanessentialcomponentofthehealthcareindustry,oftenmostvisiblyintheformofhelicopteremergencymedicalevacuations.Furthermore,themedicalindustryusesaviationinthetransferofmedicalsupplies,tissuesamples,anddonororgans.Kentuckyiscurrentlyservedbyfiveairmedicaloperators,combiningfor31airmedicalbasesacrossthestate.Fourteenofthesebasesarelocatedatairports.Thespeed,reliability,andrangeaffordedbyaviationsavesliveseveryday,andallKentuckyairportsplayavitalroleinsupportingthiscriticalactivitywhenneeded.Theinventoryidentified229on‐airportjobsrelatedtoairambulanceoperatorswithanassociatedpayrollofover$13.7million.
1Harrington‐Snell,Jennifer.Alongfortheride,BusinessAirportInternational,January2012.
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Summary of On-Airport Economic Activities AirportsinKentuckysupporttheairtravelneedsoftheCommonwealth’sresidents,businesses,andvisitors,actingaseconomicenginesforregionaleconomies.ThischapterhighlightstheimportanteconomiccontributionsthattheCommonwealthrealizesfromitsairportsbyquantifyingdirectemploymentandpayrollassociatedwiththeseairports.Theresultsofthisanalysisarereportedforthestateasawholeandforeachindividualairport.Itisalsoimportanttonotethatthiseconomicevaluationprovidesa“snapshotintime”withrespecttoairportactivityandeconomicconditions.Thedataandthestateoftheeconomyforthischapterareallspecificallyrelatedto2015.
TheKentuckysystemofairportsanalyzedinthisevaluationconsistsofsixcommercialserviceairportsand53generalaviationairports.Theseairportsrangeinsizefromsmallairstrips,suchasProvidence‐WebsterCountyAirportandLiberty‐CaseyCountyAirport,toBowmanField,abusycorporategeneralaviationrelieverairport,toCincinnati/NorthernKentuckyInternationalAirport,oneofthe60busiestcommercialserviceairportsintheU.S.intermsofenplanements.2TheKDAsupportstheseairportsaspartofitsmissiontoprovideasafeandsecureairtransportationsystemthatensuresthemobilityofpeopleandgoods,enhanceseconomicprosperity,andpreservesthequalityoftheCommonwealth’senvironmentandcommunities.Thisanalysisfoundthatthesystemof59public‐useairportsinKentuckygeneratessubstantialdirecteconomicimpactsthroughouttheCommonwealth.Inbrief,the59airports:
Supportedmorethan23,000jobsatsystemairports Thesejobsgeneratedover$1.44billioninannualpayrollTable7‐1liststheemploymentandpayrollforthe59Kentuckypublic‐useairports.Again,thesenumbersonlyincludeon‐airportbusinessesandgovernmentagencyactivities.On‐airportcapitalimprovementprojects,visitorimpacts,andmultiplierimpactsarenotincluded.Itshouldbenotedthatforairportswith3orfeweron‐airportworkers,payrollwasnotlistedinthetablebelowtomaintainconfidentialityandtoavoidreportingindividualsalaryestimates.Adiverserangeofairport‐relatedactivityisreflectedintheseimpacts,fromUPS’WorldportaircargohubatLouisvilleInternationalAirport‐StandifordFieldwheremorethan9,000workersareemployed,toEagleFlightAcademy’stwofull‐timeflightinstructorsatHancockCounty–RonLewisField.
2https://www.faa.gov/airports/planning_capacity/passenger_allcargo_stats/passenger/media/cy15‐all‐enplanements.pdf
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Table7‐1DirectEconomicImpactsforKentuckyAirports
Associated City Airport Name
Direct On‐Airport
Employment Direct On‐
Airport Payroll
Commercial Service Airports
BWG Bowling Green Bowling Green‐Warren County Regional 19 $681,000
CVG Covington Cincinnati/Northern Kentucky International 9,443 $493,290,000
LEX Lexington Blue Grass 520 $30,335,000
SDF Louisville Louisville International‐Standiford Field 12,436 $855,093,000
OWB Owensboro Owensboro‐Daviess County Regional 62 $4,004,000
PAH Paducah Barkley Regional 120 $7,552,000
Commercial Service Airports Total 22,600 $1,390,955,000
General Aviation Airports
DWU Ashland Ashland Regional 6 $286,000
BRY Bardstown Samuels Field 5 $455,000
1M9 Cadiz Lake Barkley State Resort Park ‐ $0
AAS Campbellsville Taylor County 2 Undisclosed
I96 Columbia Columbia‐Adair County 2 Undisclosed
0I8 Cynthiana Cynthiana‐Harrison County 2 Undisclosed
DVK Danville Stuart Powell Field 46 $2,281,000
8M7 Dawson Springs Tradewater ‐ $0
EKX Elizabethtown Addington Field 29 $1,163,000
2I3 Falls of Rough Rough River State Resort Park 1 Undisclosed
K62 Falmouth Gene Snyder ‐ $0
FGX Flemingsburg Fleming‐Mason 5 $362,000
FFT Frankfort Capital City 38 $9,726,000
1M7 Fulton Fulton ‐ $0
27K Georgetown Georgetown Scott County ‐Marshall Field 8 $407,000
M34 Gilbertsville Kentucky Dam Village State Resort Park ‐ $0
GLW Glasgow Glasgow Municipal 24 $1,375,000
M21 Greenville Muhlenberg County 20 $1,212,000
I93 Hardinsburg Breckinridge County ‐ $0
I35 Harlan Tucker‐Guthrie Memorial ‐ $0
JQD Hartford Ohio County 3 Undisclosed
CPF Hazard Wendell H. Ford Regional 29 $1,760,000
EHR Henderson Henderson City‐County 46 $2,031,000
HVC Hopkinsville Hopkinsville‐Christian County 4 $297,000
JKL Jackson Julian Carroll ‐ $0
K24 Jamestown Russell County 2 Undisclosed
M20 Leitchfield Grayson County ‐ $0
KY8 Lewisport Hancock Co‐Ron Lewis Field 4 $14,000
I53 Liberty Liberty‐Casey County ‐ $0
LOZ London London‐Corbin‐Magee Field 168 $10,688,000
LOU Louisville Bowman Field 92 $5,090,000
2I0 Madisonville Madisonville Regional 3 Undisclosed
5M9 Marion Marion‐Crittenden County 1 Undisclosed
M25 Mayfield Mayfield Graves County 2 Undisclosed
1A6 Middlesboro Middlesboro‐Bell County 2 Undisclosed
EKQ Monticello Wayne County 16 $1,355,000
SYM Morehead Morehead‐Rowan County Clyde A. Thomas Regional 17 $1,139,000
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Table7‐1DirectEconomicImpactsforKentuckyAirports
Associated City Airport Name
Direct On‐Airport
Employment Direct On‐
Airport Payroll
IOB Mount Sterling Mount Sterling‐Montgomery County 25 $1,234,000
CEY Murray Kyle‐Oakley Field 5 $87,000
PBX Pikeville Pikeville – Pike County Regional 3 Undisclosed
18I Pine Knot McCreary County ‐ $0
SJS Prestonsburg Big Sandy Regional 36 $1,462,000
2M0 Princeton Princeton‐Caldwell County ‐ $0
8M9 Providence Providence‐Webster County ‐ $0
RGA Richmond Central Kentucky Regional 20 $1,116,000
4M7 Russellville Russellville‐Logan County 3 Undisclosed
SME Somerset Lake Cumberland Regional 83 $3,968,000
6I2 Springfield Lebanon‐Springfield 18 $1,093,000
I50 Stanton Stanton‐Powell County ‐ $0
TWT Sturgis Sturgis Municipal 4 $204,000
TZV Tompkinsville Tompkinsville‐Monroe County 1 Undisclosed
9I3 West Liberty West Liberty ‐ $0
BYL Williamsburg Williamsburg‐Whitley County 17 $918,000
General Aviation Airports Total 792 $50,916,000
All Airports Total 23,392 $1,441,871,000
Source:CDMSmithNote:Payrollforairportswiththreeorfewerdirectemployeesarenotdisclosed.