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The Impact of Aviation on the U. S. Economy

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The Impact of Aviation on the U. S. Economy. Holly Kunz Rebecca Vredenburgh Methodist University. Overview. Civil Airline Industry General Aviation Industry Military Aviation Three Major Contributions to U.S. Economy Next Gen Impact of Economy on Aviation. - PowerPoint PPT Presentation
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Holly Kunz Rebecca Vredenburgh Methodist University The Impact of Aviation on the U. S. Economy
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Page 1: The Impact of Aviation on the  U. S. Economy

Holly KunzRebecca VredenburghMethodist University

The Impact of Aviation on the U. S. Economy

Page 2: The Impact of Aviation on the  U. S. Economy

Overview

Civil Airline IndustryGeneral Aviation IndustryMilitary AviationThree Major Contributions to U.S. EconomyNext GenImpact of Economy on Aviation

Page 3: The Impact of Aviation on the  U. S. Economy

U.S. Civil Airline Industry Facts

Consists of 100 certified passenger airlinesConducts over 11 million passenger flight

departures each yearCarries over one-third of the world’s air

trafficEarns over $160 million in revenue annually

Page 4: The Impact of Aviation on the  U. S. Economy

General AviationDirect Contributions to U.S. Economy

New & Used AircraftOperations & maintenanceCateringInformation & periodicals

Page 5: The Impact of Aviation on the  U. S. Economy

General AviationEconomic downturn

General Aviation Manufacturers Association has laid off over 12,000 workers

aviation manufacturers have filed bankruptcy and closed their doors, i.e. Adam Aircraft and Eclipse Aviation

rising fuel costsairports are deficit spending or being forced

to close

Page 6: The Impact of Aviation on the  U. S. Economy

General AviationIndirect Contributions

aluminum manufacturingi.e. 2005 general aviation spent $2,922 in mining.

radar arrays used for weather servicescomputers used for general aviation aircraft

maintenance trackingfabrics and other materials used in seating the production and transport of fuel

Page 7: The Impact of Aviation on the  U. S. Economy

Military AviationArmy 79,000-helicoptersNavy 55,000Air Force 34,600-greatest opportunities

with aviationMarines 32,700

70, 612 troops in transportation careers

Contracted companies, i.e. Boeing & Lockheed Martinunmanned aircraft systems, fighter, and bomber

aircraft

Page 8: The Impact of Aviation on the  U. S. Economy
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What are Aviations Contributions to the U.S. Economy?

Creates Jobs

Facilitates Domestic and International Trade

Drives Technology and Innovation

Page 11: The Impact of Aviation on the  U. S. Economy
Page 12: The Impact of Aviation on the  U. S. Economy

Contribution #1 Jobs

As of November 2010, the U.S unemployment rate was 9.8%

Without the pool of aviation jobs, the rate would be 14%

Civil aviation-11 million AmericansGeneral aviation- 1.2 million AmericansMilitary Aviation- 690K Americans

Page 13: The Impact of Aviation on the  U. S. Economy

Contribution #2Domestic and International Trade

Page 14: The Impact of Aviation on the  U. S. Economy
Page 15: The Impact of Aviation on the  U. S. Economy

Domestic and International Trade

Aviation is Essential for Global BusinessIt facilitates Economic Growth and World

TradeIn 2009, the value of all goods

transported by air represented 35% of the world’s international trade

The total global impact from aviation was $35 trillion or 7.5% of the world GDP (continuously moving upward)

Page 16: The Impact of Aviation on the  U. S. Economy
Page 17: The Impact of Aviation on the  U. S. Economy

Contribution #3Technology and Innovation

Page 18: The Impact of Aviation on the  U. S. Economy

Why is Aviation Technology Important for our Economy?

Technology is needed to :reduce inefficiency (delays)decrease noiseincrease passenger safetyreduce the carbon footprint on the environment.

Due to rising costs surrounding fuel consumption, aircraft manufacturers and technological experts are racing to come up with climate and cost-friendly alternatives to jet fuel (solar powered aircraft).

Experts around the world are also developing lighter, more aerodynamic aircraft (will use less fuel).

Page 19: The Impact of Aviation on the  U. S. Economy

The need for faster, more fuel economic jets.Honda’s new business jet is built of composite materials featuring a unique over the wire engine mount. It helps cut fuel consumption while allowing greater speeds. (Uses 20% less fuel that comparable size jets and at a faster speed)

The Need to Stay on the Cutting Edge

Page 20: The Impact of Aviation on the  U. S. Economy
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Page 22: The Impact of Aviation on the  U. S. Economy

The FAA and Next GenThe Problem?

“Flight Delay is a serious and widespread problem in the United States. Increasing flight delays place a significant strain on the U.S. air travel system and cost airline, passengers, and society billions of dollars each year… In addition to these direct costs imposed on the airline industry and its customers, flight delays have indirect effects on the U.S. Economy. Specifically, inefficiency in the air transportation sector increases the cost of doing business for other sectors, making the associated business less productive”

Page 23: The Impact of Aviation on the  U. S. Economy

What is Next Gen?

- the transformation of the US national airspace system. It represents an evolution

from a ground-based system of air traffic control to a satellite-based system of air

traffic management. This evolution is vital to meeting future demand, to avoid

gridlock in the sky and our nations airports.

Page 24: The Impact of Aviation on the  U. S. Economy

Radar vs. ADS-B Used since WWIIMulti-million dollar High cost radar sitesCoverage frequently lostAircraft fly longer routes than usual to stay in coverage area

Ground based-transceivers less costly (huge savings for FAA and economy)Coverage never lostAircraft can fly on more direct routes (save on fuel costs by reducing travel time)

Page 25: The Impact of Aviation on the  U. S. Economy

How will Next Gen improve Economy?

When fully implemented, Next Gen will safely allow more aircraft to fly more

closely together on more direct routes, reducing delays, and providing unprecedented benefits for the

environment and the economy through reductions in carbon emissions, fuel

consumption, and noise.

Page 26: The Impact of Aviation on the  U. S. Economy

By 2018, Next Gen is estimated to reduce delays by 35%, and reduce CO2 admissions by 14 M Tons. The benefit to the US Economy: $23 Billion

Page 27: The Impact of Aviation on the  U. S. Economy

Effects of Economy on AviationFuel costs

2006 fuel costs surpassed labor costsFor every $1 increase there is a $17 billion

increase in expenses per year

2011 $3 per gallon = $54 billion for airlines = increased

ticket prices/baggage fees/meal fees

Page 28: The Impact of Aviation on the  U. S. Economy

Effects of the Economy on Aviation

Baggage Fees by Airline 2010Airlines ranked by year-to-date baggage fee revenue, dollars in thousands (000)

Rank 1Q 2Q 3Q4Q (May

9 release) Year-to-date1 Delta Air Lines 217,773 255,950 259,473 733,1962 American Airlines 128,539 152,059 151,175 431,7733 US Airways 120,720 135,601 131,806 388,1274 Continental Airlines 76,603 91,031 90,494 258,1285 United Airlines 71,145 84,824 83,872 239,8416 AirTran Airways 35,005 39,204 38,139 112,3487 Alaska Airlines 21,166 25,394 34,430 80,9908 Spirit Air Lines 16,033 16,811 22,939 55,7839 Frontier Airlines 13,872 15,470 14,725 44,067

10 JetBlue Airways 13,763 14,012 15,494 43,26911 Allegiant Air 14,826 14,437 13,747 43,01012 Hawaiian Airlines 11,672 13,523 15,060 40,25513 Virgin America 7,328 9,124 10,177 26,62914 Southwest Airlines 6,872 7,923 7,729 22,52415 Republic Airlines 6,418 6,366 5,193 17,97716 Horizon Air 762 5,293 6,702 12,75717 Sun Country Airlines 3,971 2,406 3,059 9,43618 Mesa Airlines 539 731 980 2,25019 Continental Micronesia 585 813 773 2,17120 USA 3000 Airlines 954 819 391 2,163

  All Airlines 768,546 891,791 906,358   2,566,695

Source: Bureau of Transportation Statistics, Schedule P-12

Page 29: The Impact of Aviation on the  U. S. Economy

Effects of the Economy on Aviation

“Aviation is the glue that keeps the global economy together. Without widely accessible and well-priced air travel, the global economy will quickly become less global.”

— Dr. Mark Zandi, Chief Economist & Co-Founder, Moody‟s Economy.com (August 2008)

Page 30: The Impact of Aviation on the  U. S. Economy

Aviation & September 11, 2001American Airlines

Airport closure

“retired part of its fleet, pared unprofitable routes and slashed about 23 percent of its work force” (Reeves, 2002)

Chief Executive Officer David Siegel Smaller aircraft, cut pay, filed Chapter 11

bankruptcy

Page 31: The Impact of Aviation on the  U. S. Economy

American Airlines cont.Expunged $600 million in debt

Qualified for $900 million in federal loans

Received $200 million from private investors

2002 American Airlines competed with JetBlue & Southwest

Page 32: The Impact of Aviation on the  U. S. Economy

References http://www.technologyreview.com/energy/27026/?a=f References AV Scholars. (n.d.). Military Services. Retrieved April 22, 2011, from AV Scholars.com: http://www.avscholars.com/Military_Services/aviation_military_services.htm Air Transport Association. (2011). Retrieved 2011 йил 2-4 from http://www.airlines.org/Environment/ClimateChange/Pages/21stCenturyAviation-

ACommitmenttoTechnology,EnergyandClimateSolutions.aspx Air Transport Association. (n.d.). Airline Energy Q&A. Retrieved 04 15, 2011, from Air Transport Association: http://www.airlines.org/ /Fuels101/Pages/AirlineEnergyQA.aspx Air Transportation Association. (n.d.). Economic Energy Impact. Retrieved April 20, 2011, from Aviation and the Economy:http://www.airlines.org/Economics/AviationEconomy/Pages/ EconomicImpact.aspx Bureau of Labor Statistics. (n.d.). Job Opportunities in the Armed Forces. Retrieved April 22, 2011, from United States Department of Labor: http://www.bls.gov/oco/ocos249.htm Boeing. (n.d.). Defense Space and Security. Retrieved April 22, 2011, from Boeing: http://www.boeing.com/bds/military_aircraft/ Carlini, M. (2011). Aviation's Role in the US Economy.

Page 33: The Impact of Aviation on the  U. S. Economy

References Continued Economics, A. O. (2011). The Economic Climb-Out for U.S.

Airlines Global Competitiveness and Long-Term Viability. Air Transport Association. Embry-Riddle Aeronautical University News Center. (n.d.).

Retrieved 2011 йил 3-April from Embry-Riddle Aeronautical University:

http://news.erau.edu/media-resources/ facts-figures/enrollment/index.html Demerjian, D. (2009, June 13). General Aviation Sounds Mayday

as Fat Cats Ditch Their Jets. Retrieved April 22, 2011, from Wired: http://www.wired.com/cars/coolwheels/news/2009/05/

corporatejets0513 Fox News. (2006, August 4). www.Foxnews.com. Retrieved April

11, 2011, from www.Foxnews.com:

http://www.foxnews.com/story/0,2933,207121,00.html Global Airline Industry Program. (n.d.). Retrieved 2011 йил 13-

April from http://web.mit.edu/airlines/analysis/analysis_airline_industry.html National Business Aviation Association. (2009, march 30).

GENERAL AVIATION INDUSTRY HURTING DURING ECONOMIC DOWNTURN . Retrieved april

17, 2011, from National Business Aviation Association:

http://www.nbaa.org/advocacy/issues/economic-downturn/recession.php

Merge Global. (May 2006) General Aviations Contributions to the US Economy. Retrieved

April 21, 2011, from General Aviation Manufacterers Association: http://www.ok.gov/OAC/documents/General%20Aviation

%20Contribution%20to%20the%20US%20Economy%20(GAMA).pdf

Military.com. (2002, July 10). Enlistment Still Down Despite 9/11 . Retrieved April 22, 2011,

from Military.com: http://www.military.com/NewContent/0,13190,FL_enlist_071102,00.html

Stoller, G. (2011, April 11). Airlines moving fares higher again. Retrieved April 11, 2011,

from www.mydesert.com: http://www.mydesert.com/article/20110411/BUSINESS/104110303/0/

7daysarchives/Airlines-moving-fares-higher-again?odyssey=nav|head

Reeves, F. (2002, September 8). Business News. Retrieved April 20, 2011, from Post-Gazette

Web site: http://www.post-gazette.com/businessnews/20020908911usair2.asp

(2008). The Economic and Social Benefits of Air Transport . Geneva: Air Transport Action

Group. (2011). The FAA's NextGen Implementation Plan. Federal Aviation

Administration

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