Impact of Airports - Political, Environmental and Social

Airports play an important economic role within their local communities. Airports serve a significant role in the economic shaping of the communities of which they serve due to the sheer actuality that they are among the largest public facilities in the world. It is well understood that a viable and efficient transportation system is a fundamental and necessary component to the economy of any region (Wells & Young, 2004).

Although there is no doubt that the presence of an airport has great positive impacts on a surrounding community from an economic standpoint, the presence of an airport, much like any large industrial complex, unfortunately impacts the community and surrounding natural environment in what many consider a negative manner. These effects are a result of activity whose sources is the airport itself and of vehicles, as well as both aircraft and ground vehicles, which travel to and from the airport (Wells & Young, 2004).

Examine the political, environmental and social impact an airport has on its local community. Analyze some rules and regulations that govern environmental impact activities, and explain how their strategies help satisfy the needs of the local communities while maintaining sufficient airport operations. Determine and evaluate the role technology plays in mitigating the risks and reducing the environmental impacts created by airport activity. Determine if a relationship exist between community economic growth indicators and airport activity.

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Program Outcome addressed by this question.

1. P.O. #1: Students will be able to apply the fundamentals of air transportation as part of a global, multimodal transportation system, including the technological, social, environmental, and political aspects of the system to examine, compare, analyze and recommend conclusion.

A literary review will analyze the environmental impacts of airports on the surrounding communities in which they serve. An evaluation of environmentally related complaints filed against aviation activity and reported to the FAA will determine the most significant environmental impacts associated with airports. Predicting the future of the global multimodal air transportation system is impossible without first understanding the local role and responsibility of each component of the air transportation system. This question will show evidence of satisfying the Program Outcome by demonstrating how the social, economical, political, and environmental fundamentals of an airport are an integral part of the air transportation system, and how these factors contribute to the relationship that an airport has with its surrounding communities.

Research and Analysis

Airports serve a significant role in the political, economic, and social shaping of the communities of which they serve due to the sheer actuality that they are among the largest public facilities in the world.

Political Roles

A major commercial airport is a huge public enterprise. Some are literally cities in their own right, with a great variety of facilities and services (Wells & Young, 2004). Although the administrative functions and responsibilities of these facilities are governed by public entities, airports are also comprised of private dispositions. Commercial airports must be operated in cooperation with the air carriers that provide air transportation service and all airports must work with tenants, such as concessionaires, fixed-based operators (FBOs), and other firms doing business on airport property. This amalgamation of public management and private enterprise fashions a unique political role for airport management (Wells & Young, 2004).

Airline carrier-airport relationships.

One of the most prominent and essential relationships in the aviation industry is the airport airline relationship. When viewing the relationship from the airlines’ standpoint, an airport is a point along their route system for the purpose of enplaning, deplaning, and transferring passengers, cargo, and freight. To facilitate effective and efficient operations, the airlines necessitate specific facilities and services at each airport. The specified requirements of the airports are as varied and unique as the airlines who request them; however, they scarcely remain stagnant, as they are ever changing and evolving to meet the needs of traffic demands, economic conditions, and the competitive climate. Before airline deregulation in 1978, response to changes of this sort was slow and mediated by the regulatory process. Airlines had to apply to the Civil Aeronautics Board (CAB) for permission to add or drop routes or to change fares. CAB deliberations involved published notices, comments from opposing parties, and sometimes hearings that could take months, even years, and all members of the airline airport community were aware of an airline carrier’s intention to make a change long before they received permission from the CAB (Wells & Young, 2004). The Deregulation Act of 1978 enabled air carriers to change their routes and fares without awaiting the approval of the CAB. Many of these changes occurred on short notice, thus causing airline necessities and requirements at airports to change with haste.

Contrary to the viewpoints of air carriers, which operate at multiple airports over a route system connecting many cities, airports concentrate on accommodating the interests of a variety of users at a solitary location. Airport operators and managers have the strenuous task of ensuring that they meet all the demands and requirements of their airline carriers while maintaining their resources. Due to the rapidly changing specifics of each airline carrier, airports often find their services and facilities needing improving or refurbishing, requiring major capital expenditures or even making obsolete an already constructed facility. Airport operators and managers must exercise diligence and caution in realizing that they accommodate and must meet the needs of other tenants and users besides the airline carriers, and must ensure that the airport’s landside facilities are effectively and efficiently utilized. Although the landside facilities are of minimal importance to the airline carriers, their efficiency can severely have an effect on and be affected by their operations.

Despite their notably different perspectives, airline carriers and airports share the collective objective of making the airport a successful and established economic venture in which both parties can benefit and prosper from. Traditionally the relationship between the airline carriers and airports has been formally fused through the use of airport user agreements which establish the circumstances and methodology for establishing, calculating, and collecting usage fees and charges. These agreements are also used to identify the rights and privileges of air carriers, sometimes including the right to approve or disapprove any major proposed airport capital development projects (Wells & Young, 2004). Residual cost airports, or airports where two or more air carriers assume financial risk by agreeing to pay any cost of running the airport that are not allocated to other users, typically have longer-term use agreements than compensatory airports, with agreements of terms of 20 or more years and terms of 30 years or longer not being uncommon. On the other hand, only approximately half of compensatory airports, or airports in which the airport operator assumes the financial risk of running the airport and charges the air carrier fees and rental rates set so as to recover the actual costs, have agreements running for 20 years or more, with many of the compensatory airports having no contractual agreements whatsoever with the airline carriers (Wells & Young, 2004).

Concessionaire-airport relationships.

Another vital relationship which attributes to an airport’s success is the relationship between the airport and the concessionaires. This is due to the fact that the majority of airports rely on their concessionaires in order to generate a considerable amount of their non-aviation related revenues. Airports maintain management contracts and concession agreements with the concessionaires who provided the airport with services and facilities such as banks, restaurants, hotels, car rental companies, parking facilities, bookstores, bars, gift shops, taxi services, and business centers. The context of these agreements varies to a great extent; however, they typically extend the various concessionaires the privilege of operating on the property of the airport in exchange for the greater payment of either a minimal annual fee, or a percentage of the revenues. These agreements can vary from outlet to outlet at the same airport depending upon location, nature of business, forecast turnover and whether or not the outlet is new (Francis et. al, 2004). The tenure of each agreement between the airport and the various concessionaires and the financial circumstances affixed to each will vary by airport and concessionaire. The length of the contractual agreement is dependent upon an array of criteria, with one of the most important being the level of investment required from the retailer. If little investment is required then a contract is often short term; however, if any substantial level of investment is required from the retailer then a contract of five years would be considered the minimum (Freathy & O’Connell, 1999).

A concessionaire who is often overlooked when speaking of concessionaire, despite its critically important role, is the fixed based operator (FBO). FBOs generally provide services for airport firms, users, and tenants lacking facilities of their own, typically through fuel sales, and aircraft repair, service, and maintenance facility operations. The contracts and agreements between airport operators and FBOs vary due to FBOs constructing and developing its own facilities on airport property in some cases, and FBOs simply managing facilities belonging to the airport in other cases.

In addition to concessionaires, some airport authorities serve as landlord to other tenants which may reside and operate on airport property such as industrial parks, freight forwarders, and warehouses, all of which can provide significant revenue. It is the responsibility of airport management to maintain fruitful political relationships with all tenants, by ensuring reasonable lease fees, contract terms, and an overall mix of tenants that meet the needs of the airport and the public it serves (Wells & Young, 2004).

General aviation-airport relationships.

In contrast to airline carriers and concessionaires, contractual agreements are rarely used to characterize and solidify the relationships between airport operators and general aviation (GA). GA is a diverse group which can be comprised of GA aircraft owned and operated by an assortment of organizations and individuals for a miscellaneous number of leisure, business, or instructional purposes. Agreement when they are in place, are seldom long term due to the variety and diversity of owners and aircraft type and use. Airport facilities, in particular storage space such as hangars and tie-downs, are often leased from the airport with the airport playing the role of landlord in a landlord-tenant relationship. Thus, at the airport, the primary needs of GA are parking and storage space, along with facilities for fuel, maintenance, and repair. Whereas as air carrier might occupy a gate for an hour to deplane and enplane passengers and load fuel, a GA user might need to have property space to park an aircraft for a day or more (Wells & Young, 2004).

Airport-public relations.

Indubitably, one of the most vital and challenging relationships that an airport must foster and maintain, is the relationship between the airport and its community it serves. The overall goal of the airport must be to create goodwill and a positive reputation for the airport and its products, services, and ideals with the community, who can affect its present and future welfare. Without regards to the size, location, or activity scope of an airport, every airport four publics in which it must deal with. These publics include the 1) external business public, which includes all segments of the business, government, educational, and general flying public; the 2) external general public, which is all the local citizens and taxpayer, many of whom have never been to the airport but who vote on airport issues or who represent citizens groups with particular concerns; the 3) internal business public, which includes the businesses and enterprises who interests are tied directly to the airport-the airlines, FBOs, other members of the GA community, government officials, and other aviation and travel-oriented local businesses and trade organizations, and the employees of all these enterprises; and the 4) internal employee public comprised of everyone who works for the airport and its parent organization (Wells & Young, 2004). Like any other facility that is a part of and serves the total community, the airport requires total understanding by its community and publics, and must ensure that it creates an environment and atmosphere of awareness and acceptance.

Airport regulatory policies.

The airport has many organizations who are profoundly interested in their operations, and in developing and preserving airports due to their role in the national air transportation system and their value to the communities and publics they serve. The primary goal of these groups is to provide political support for their causes with hopes to influence federal, state, and local laws concerning airports and aviation operations in their favor (Wells & Young, 2004). Some of the most prominent groups include the Aerospace Industries Association (AIA), the Aircraft Owners and Pilots Association (AOPA), the Air Line Pilots Association (ALPA), the Airports Council International-North America (ACI-NA), the Air Transport Association of America (ATA), the American Association of Airport Executives (AAAE), the Aviation Distributors and Manufacturers Association (ADMA), the Experimental Aircraft Association (EAA), the Flight Safety Foundation (FSF), the General Aviation Manufacturers Association (GAMA), the Helicopter Association International (HAI), the International Air Transport Association (IATA), the National Agricultural Aviation Association (NAAA), the National Air Transportation Association (NATA), the National Association of State Aviation Officials (NASAO), the National Business Aviation Association (NBAA), the Professional Aviation Maintenance Association (PAMA), and the Regional Airline Association (RAA).

Economic Roles

Unquestionably, airports are economic locomotives and a reflection of the community, publics, and region in which they reside, serve, and represent. Transportation, by definition, provides the ability for people and goods to move between communities, thus leading to trade and commerce between markets, which in turn, lead to jobs, earnings, and overall economic benefit for a community’s residents (Wells & Young, 2004).

Transportation role.

Despite the fact that there are numerous modes of transportations, to include automobiles, trains, trucks, and ships, air travel has had a significant impact on trade and commerce that is absolutely unrivaled by any other transportation mode. In comparison to their sister modes of transportation, travel in the aviation system allows substantial amounts of passengers and cargo to travel internationally in relatively short periods of time, resulting in communities garnering extraordinary and exceptional economic benefit through providing them access to various world-wide markets.

Stimulating economic growth.

The airport has become vital to the growth of business and industry in a community by providing air access for companies that must meet the demands of supply, competition, and expanding marketing areas. Economic impacts of airports are measured according to direct impact and indirect, or induced, impact. Directs impacts include the economic activities carried out at the airport by airline carriers, airport management and operators, FBOs, and other firms, and tenants with a direct involvement with aviation. Airports and the agencies and tenants that directly impact the airports represent a major source of employment for their various outlying communities, with the wages and salaries earned by the employees of airport-related business having a significant direct economic impact on the local communities’ economy by providing the means to purchase goods and services while generating tax revenues as well. Local payrolls are not the only measure of an airport’s economic benefit to the community. In addition, the employee expenditures generate successive waves of additional employment and purchases that are more difficult to measure, yet nevertheless substantial (Wells & Young, 2004).

Total Airport Earnings and Employment (Earnings in Millions)

Category Earnings Jobs

Salaries $208.91 4,870

Local Fuel Purchases $3.99 237

Local Non-Fuel Purchases $4.23 252

Rent $18.35 723

Equipment Purchases $1.39 82

Utilities $8.07 318

Contractual Services $41.77 1,647

State Taxes $10.16 125

Local Taxes $27.42 338

Other Spending $73.14 901

Hotel Spending $42.20 2,234

Construction $19.11 743

Total $458.74 12,471

* Totals may not add due to rounding

Table 1: Louis Armstrong New Orleans International Airport (MSY) 2004 earnings and employment. Taken from MSY 2004 Airport Report

In addition to the direct economic impact generated by the airport, the outlying communities receive indirect, or induced, impact generated by economic activities by on-airport businesses and off-airport business activities associated with the airport through-put, such as hotels, gas stations, restaurants, and travel agencies, as well their roles in facilitating trade and tourism, among others. The airport also indirectly supports the local economy through the use of local services for air cargo, food catering to the airlines, aircraft maintenance, and ground transportation on and around the airport, as regular purchases of fuel, food, goods, supplies, equipment, and other services permeate additional income into the communities surrounding the airport. The local economy’s tourism and business convention industry can also receive economic growth and substantial revenues indirectly impacted by the airport through air travelers’ patronage and use of hotels, restaurants, retail stores, sports and night clubs, rental cars, and local transportation, among others.

Beyond the benefits that an airport brings to the community as a transportation facility and as a local industry, the airport has become a significant factor in the determination of real estate values in adjacent areas. Land located near airports almost always increases in value as the local economy begins to benefit from the presence of the airport. Land developers consistently seek land near airports, and it follows inexorably that a new airport will inspire extensive construction around it (Wells & Young, 2004).

TOTAL TAX REVENUE CREATED (In millions of $s)

CATEGORY INCOME

State

Direct $9.95

Income $7.18

Selective Sales $7.52

General Sales $8.90

Business $2.48

Total State $36.04

Local Sales $10.57

Local Direct $23.83

Local Property Taxes $0.97

Total Local $35.38

State Plus Local $71.41

* Totals may not add due to rounding

Table 2: MSY Tax revenue created 2004. Taken from MSY 2004 Airport Report

Airports are a major force and contributor to the local, regional, and national economy with an impact that goes well beyond the actual physical boundaries of the airport. As cargo and passenger continue to rise, and infrastructure continue to improve, the importance and impacts of airports as economic catalyst will also continue to increase.

Environmental Roles

Although there is no doubt that the presence of an airport has great positive impacts on a surrounding community from an economic standpoint, the presence of an airport, much like any large industrial complex, unfortunately impacts the community and surrounding natural environment in what many consider a negative manner. These effects are a result of activity whose sources is the airport itself and of vehicles, as well as both aircraft and ground vehicles, which travel to and from the airport (Wells & Young, 2004).

Noise Impacts.

Conceivably the most noteworthy environmental impact associated with airports is the noise emanated by the taking off and landing of aircraft, with engine maintenance and taxiing aircraft following closely behind. The impact of such noise on communities is usually analyzed in terms of the extent to which the noise annoys people by interfering with their normal activities, such as sleep, relaxation, speech, television, school, and business operations (GAO, 2000). According to a 1978 study that has become the generally accepted model for assessing the effects of long-term noise exposure, when sound exposure levels are measured by the method that assigns additional weight to sounds occurring at night (between 10 p.m. and 7 a.m.), and those sound levels exceed 65 decibels, individuals report a noticeable increase in annoyance (Schultz, 1978). There is increasing evidence that high exposure to noise has adverse psychological and physiological effects and that people repeatedly exposed to loud noises might exhibit high stress levels, nervous tension, and inability to concentrate (Wells & Young, 2004).

Since the beginning of aviation, airports have always had conflicts with their neighboring communities; however, noise did not become an issue until the 1960s introduction of the commercial jet. It is estimated by the Federal Aviation Administration (FAA) that between 1960 and 1970, the land area affected by aviation-related noise and the complaints they received with noise as the culprit increased sevenfold.