Today more than ever, Arizona relies on aviation to remain competitive in the global marketplace.
Aviation and airports are essential components ofthe state's infrastructure for moving people and
goods, for facilitating local, national and international commerce, and maintaining quality of life
for Arizona residents.
Businesses and Residents
Depend on Arizona's Air
Transportation System
The state's major employers, as well as
small businesses, rely on Arizona's
airports to provide fast, efficient
transportation for personnel, supplies
and products.. Arizona's growing
population relies on aviation for
comfortable and convenient travel to
cities across the US and worldwide
Aviation Supports Arizona's
Growing Tourism Industry
The tourism industry in Arizona relies
on commercial and general aviation to
transport millions of visitors each year
to the state's tourist attractions and
recreational activities including the
Grand Canyon National Park, the
scenic vistas of Sedona and the
Sonoran Desert, first class resorts and
spas, championship golf courses and
other outdoor adventures.
Aviation Creates Economic
Benefits
Beyond the obvious transportation
benefits, aviation and airports create
economic benefits that extend to all
Arizona citizens. Even those that may
n~Wf:l1o.. ard an awane or make an air
iHi LONA STAI t LIBRARY
t . ouHIVFS & PUBLIC RECORDS
.IAN 1 1 2005
S ,ATE DOCUMENTS
cargo shipment, receive economic
benefits from the state's aviation
activities through the creation of
businesses, jobs, income, and tax
revenues Aviation directly and
indirectly supports nearly one-half
million jobs and over $385 billion of
economic activity in Arizona.
Aviation Enhances Quality
ofLife
Arizonans derive benefits from
aviation that are often intangible and
hard to quantify, but nonetheless, of
extreme value.. Communities rely on
aviation services and infrastructure for
essential services such as overnight
delivery services, air ambulance
services, aerial/applications, traffic
monitoring, and law enforcement
Arizona airports also support a number
of recreational activities, such as
soaring, ballooning, sightseeing, and
other recreational flying that enhances
the quality of life for residents.
Future Benefits Require
Continued Investment
Aviation is unquestionably a catalyst
for economic growth in Arizona. The
future of Arizona aviation is crucial
to the state's continued economic
growth and global competitiveness.
Arizona must make a commitment to
adequately fund the state's aviation
resources in order to continue to derive
the economic, transportation, and
quality of life benefits of aviation
Aviation plays an important role as an
economic catalyst in Arizona. In 2002,
aviation activities generated $38.5 billion in
total economic activity statewide. More than
470,000 Arizona jobs are related directly or
indirectly to aviation. These jobs created
almost $15 billion in wages and benefits for
Arizona residents.
The total economic contribution of aviation
includes primary impacts created by the economic
activities of aviation suppliers and users, as well as
spin-off impacts. Spin-off impacts are created when
spending by aviation suppliers and users creates additional
jobs and spending that support non-aviation businesses.
The spin-off benefits created by these successive rounds of
spending are also known as the "multiplier effects"
Aviation is directly responsible for 229,000 Arizona jobs
with an annual payroll of $7 billion. This includes employment
at the state's airports and on-airport businesses,
aerospace manufacturers, aviation education programs,
the tourism industry, and military air bases. Together,
these aviation related activities had a primary impact of
$18.2 billion on the Arizona economy
MEASURES OFECONOMICIMPACTS
Economic Activity The value of all goods, services and
capital expenditures that can be linked to aviation.
Measured as sales for businesses, operating budgets for
government agencies, and spending by air visitors.
Payroll The wages and benefits of all persons whose
jobs are directly or indirectly supported by aviation.
Employment The total number offull-time equivalent
jobs that are directly or indirectly supported by aviation.
Commercial
Aviation Military Total
Activity $8,714 $1,800 $253 $11,233 $3,359 $13,166 $38,525
Payroll (mil) $3,063 $162 $101 $3,819 $1,510 $5,288 $14,664
Employment 91,519 24,135 2,314 95,369 50,192 205,919 470,708
Total Economic Activity by Sector
Air aerospace, and commercial aviation
account for 85% of aviation's primary economic
Impa,cts in Arizona.
military /
9%
Commercial
Aviation
23%
General Aviation
Aviation 5%
Education
1%
Air Visitors
33%
Aerospace
Manufacturing
29%
Commercial aviation is a fast growing sector of
the Arizona economy, fueled. in part by the
state's rapid. population growth. During the
19905, Arizona's population base grew by more
than 1.5 million people, or 40%, making it the
second. fastest growing state in the nation.
Thirteen commercial service airports serve the needs of
Arizona's commercial airline passengers and shippers
These airports range in size from the Phoenix Sky
Harbor International Airport, which accommodated
17.6 million passenger enplanements in 2002, to
Kingman Airport, with just over 2,000 passenger
enplanements
Primary Commercia! Service
Other Commercial Service
Commercial aviation encompasses the activities of
airport operators, passenger and cargo airlines, freight
forwarders, air couriers, and a host of support businesses,
such as food and retail concessions, parking,
ground transportation, aircraft fuel and maintenance,
and airport security In 2002, commercial
aviation contributed $4.1 billion in
primary benefits to Arizona's
economy Commercial airports,
their tenants, and support businesses
employed more than 39,000
Arizona residents with a payroll of
nearly $15 billion
4
Primary Economic Impacts ofCommercial Aviation
Commercial airlines produced $2.3 billion
in economic output, more than half ofthe
economic contribution oftotal commercial
aviation.
The airlines created over 16,000 Arizona jobs with a
total payroll of $727 million. Businesses engaged in
air cargo and overnight delivery services also had a
significant impact on the state's economy Air cargo
and courier agents produced $765 million in
revenues, which supported 9,400 jobs with a
payroll of $307 million.
Air Carriers
56%
Air Cargo & Couriers
19%
Airport Business
11%
Airport Construction
6%
Airport Administration
Ground 3%
Transport
Gov't 3%
Services
2%
, .
Economic Impact ofeommercial. H!Dation anB Mrilorts
Air
Carriers
Air Cargo Airport
& Couriers Businesses
Ground
Transport
Cov't
Services
Airport
Admin.
Airport
Construct. Total
Economic
Activity (mil)
Payroll (mil)
Employment
$2,321
$727
16,505 .
$765
$307
9,449
$429
$146
5,913
$122
$62
2,599
$80
$60
1,879
$120
$49
719
$235
$102
2,424
$4,071
$1,454
39,487
, , , 'l'otaillmpacf '* , . -
Economic
Activity (mil)
Payroll (mil)
Employment
Cmegn,y Inciudes:
$4,880
$1,492
38,750
Call Centers
$694
25,979
Terminals,
$898
$335
11,488
Auto Rental,
Airport Shops!
Thod Services;
$267 $178 $260 $517 $8,714
$119 $99 $104 $219 $3,063
4,268 3,017 1,824 6,193 91,519
Taxis: Air lliaintBnanct\
Limo Services! Capital Improvements
Van Customs, ffrarketin9
FDstal Service!
Weather Service;
Airport Security fTSlij
" Includes Spin-Off Impacts
6
General aviation includes all aviation
activity other than scheduled airline
operations and occurs at all airports in
Arizona. The Arizona airport system
includes an extensive network of public
use general aviation airports to meet the
aviation needs of Arizona's businesses
and recreational users.
In 2002, there were more than 6,500 registered
general aviation aircraft based at Arizona
airports. In total there were 3.4 million general
aviation operations (aircraft landings and
take-offs) at Arizona's general aviation and
commercial airports. General aviation airports
accommodated 76% of the state's general
aviation operations.
!Rfi'izona'smop 10 Airports
for GA 9perations
The primary impact of general aviation
activity and support services in Arizona was
$842 million in economic activity. More than
9,800 Arizonans are employed in the general
aviation industry and receive wages and
benefits of $362 million. Over 60% ofthe
economic contribution of general aviation
comes from aircraft sales and services. This
includes the sale of private aircraft and
aircraft parts, as wen as aircraft rentals, fuel,
maintenance, support services and storage.
The spending of persons directly employed by general
aviation supports an additional 15,000 jobs in other
sectors of the Arizona economy General aviation's
total contribution to the Arizona economy is $18
billion, including multiplier effects.
Economic
Activity (mil) $64 $528 $195 $13 $18 $24 $842
Payroll (mil) $21 $223 $82 $11 $9 $11 $362
Employment 635 5,920 2,456 260 297 253 9,821
Economic
Activity (mil) $131 $1,119 $421 $29 $40 $1,800
Payroll (mil) $51 $412 $174 $17 $20 $162
Employment 1,611 15,015 6,229 480 753 24,135
lncirrdes: Cemmuter,
Unschednled
Caniers
.Arizona's favorable dry climate, wide-open spaces, and skilled
labor force have attracted a number of aerospace research and
man.ufactuldr,g firms to the Grand State. These firms,
which include Raytheon, Honeywell, Boeing, and MD Helicopters
are engaged in research and the manufacturing of
aircraft parts, avionics, communication systems and missiles
for commercial and military applications. .Aerospace businesses
have a significant impact on Arizona's economy. In
aerospace accounted for almost one-third of the primary
economic impacts of aviation in .Arizona.
The aerospace sector contributed $5..6 billion to Arizona's economy in 2002
More than 28,000 Arizonans are employed by aerospace firms, with annual
payrolls totaling $L 8 billion. These are high paying jobs with average wages
and benefits exceeding $60,000 a year
In addition to those employed in the industry, aerospace indirectly supported
another 67,000 jobs in Arizona The total impacts pf aerospace,
including the multiplier effects, was $IL2 billion in 2002 Includes
-
i
i~
i
In 2002,8,4 million visitors traveled to Arizona
by air, Visitors are attracted to Arizona for a
variety of reasons, Some travel to Arizona to
conduct business, others come to visit with
family and friends, and still others are tourists
who come to enjoy Arizona's sunshine, natural
beauty, resorts and other attractions. Over 80%
of Arizona's air visitors traveled to the state on
a commercial airline, and 18% utilized a
private general aviation airplane.
While staying in Arizona, air visitors spent $5.9 billion
on items such as lodging, food and drink, retail purchases,
local transportation, and entertainment Air
visitor spending directly supported 120,000 jobs in the
hotel, restaurant, retail, and entertainment sectors The
total impact of air travelers on the Arizona economy,
including the multiplier effects, was $13.2 billion
Lodging Retail Transpm:tation Ente:l.'tainment Total
Economic
Activity (mil) $2,057 $1,936 $1,028 $333 $423 $134 $5,910
Payroll (mil) $824 $735 $506 $101 $183 $69 $2,419
Employment 33,991 52,174 20,579 3,100 8,418 2,495 120,757
Economic
Activity (mil) $4,556 $4,303 $2,241 $794 $983 $289 $13,166
'\ Payroll (mil) ·$1,824 $1,672 $1,012 $242 $408 $130 $5,288
;7 Employment 63,773 79,582 35,553 7,239 15,582 4,251 205,979
i Includes Spin-Off
Arizona is a leader in private sector aviation
education with the second highest number of flight
instructors per capita in the US.
In addition to private flight instructors, Arizona boasts leading
institutions that offer undergraduate and graduate degree
programs preparing students for careers in aeronautics,
aerospace engineer ing, aviation business management, and
other aviation careers.. In 2002, the aviation education field
created more than 1,200 full time jobs and had a primary
impact of $110 million on the Arizona economy
More than 28,000 people are employed at
Arizona military bases that are engaged in
aviation or aviation related activities.
In 2002, these military sites had an annual payroll of
$989 million and were responsible for spending nearly
$L7 billion in the state. The total economic impact of
military aviation in Arizona was $3..4 billion including
multiplier effects.
Military Air Bases in hi:uma
Air National Guard 161sl_ Phoenix
Air National Guard 1620<1_ Tucson
Davis-Monthan Air Force Base
Libby Army Airfield - Sierra Vista
Lul(e Air Force Base
Marine Corp Air Station - Yuma
Papago Park Military Reservation
Silver Bell Heliport
" Includes
Arizona aviation and air visitor spending also
generate state and local tax revenues. Corporations
and persons directly involved in aviation pay taxes,
including income taxes, sales taxes and user fees.
As persons employed in aviation spend their
salaries, additional revenue is generated through
sales taxes. Air visitors, through their spending in
the state, are another source of tax revenues.
The spending from these direct and indirect activities
recirculates through the Arizona economy creating additional
sources of tax revenues. In 2002, the combination of direct,
indirect and induced activities created $L8 billion in state
and local taxes for Arizona
State and Local Tax Revenues Generated by
Aviation Activities and Multiplier Impacts
Sales tax collections were the single largest source of tax
revenues at $731 million, followed by business property
taxes at $415 million. Personal income taxes, which
amounted to $290 million, was the third largest source of tax
revenues stemming either directly or indirectly from
aviation In addition, several taxes are levied on aviation
activities, from excise taxes on aircraft, to aviation fuel taxes,
and aircraft registration fees. These taxes raised $28.1
million in state and local revenues in 2002 Of all the tax
revenues stemming from aviation activities, only $10.9
million (less than 1%) was reinvested in aviation through
the Aeronautics Division of the Arizona Department of
Transportation, whose mission is to encourage and advance
the safe and orderly development of aviation in the state
Allocation ofTaxes Genera.ted by
Avia.tion Activities
Sales Taxes
$731M (40%)
Aviation
Taxes & Fees
$28M (2%)
Other
Business Taxes
$119M (7%) Other
Personal Taxes
$148M (8%)
Business
Property Taxes
$415M (23%)/
Personal/Corporate
Income Taxes
$351M (20%)
State & Local
Revenues
$1,781.2M: (99.4%)
ADOT
Revenues
$10.9M (0.6%)
Aviation benefits all sectors ofthe Arizona
economy. Arizona businesses rely on aviation to
transport personnel, send products to customers,
and receive materials and supplies. They also
depend on and benefit from the spending
generated by air visitors and persons employed
in aviation.
The majority of aviation's economic benefits accrue to the
Services, Manufacturing, and Trade sectors
Economic Impact oflUizona Aviation
by Industry Sector
1998-2002
$38.5b
lUI Other **
F.I.R.E. *
9% ($3.3b)
Government
12% ($Ub)
Transportation,
Communications
&Utilities
15% ($5.8b)
Wholesale &
Retail Trade
18% ($7.0b)
Manufacturing
21% ($8.0b)
Services
22% ($8.8b)
Includes Agricullmre,
and Construction
Includes
Insurance &Real Estate
The economic impact of Arizona aviation
increased from $31.1 billion in 1998 (measured
in constant 2002 dollars) to $38.5 billion in 2002,
representing a real increase of 24%. This is not
surprising given the growth of the Arizona
economy and aviation industry over this period.
Despite the 2001 economic recession and the
negative impacts ofthe 9/11 terrorist attacks,
the Arizona economy, as well as aviation
activities, grew at above~averagerates between
1998 and 2002.
Over this period, Arizona outpaced the United States in
basic economic measures Statewide employment grew
by 8% and personal income, measured in constant
dollars, increased by nearly 15% significantly faster than
average US growth.. Moreover, Arizona's population
increased by 17%, more than twice the rate of US
population growth
A1.'izona 's Aviation GUJwih
Arizona's Economic &Demographic Growth
1998-2002
Within Arizona, both commercial and general aviation
activities have grown since 1998.. Arizona's airline
enplanements rose by 8%, while total US enplanements
showed no growth between 1998 and 2002. General
aviation operations in Arizona grew by 67% over the
5-year period while national general aviation operations
declined by 12% Commercial airline and general
aviation visitors to Arizona increased by 467,000. Total
spending by these visitors rose from $4..7 billion in 1998
(expressed in 2002 dollars) to $5.6 billion in 2002,
representing a real increase of 18%. The Aerospace
industry added 1,800 jobs in Arizona and employment at
Arizona's military air bases rose by 6,500 jobs.
Population
Personal Income
Total Employment
.lhizona
1998-2002
Air Visitors
GoA. Operations
Aerospace
Employment
Military Air Base
Employment
Commercial Airline
Enplanements
Air Visitor Spending
+24% +45% +12'/,
Arizona's Aviation Industry Growth
1998-2002
Activity
• 1998 • 2002
Air transportation, aviation support services, and
airport facilities are essential for Arizona's
continued economic growth. For Arizona, aviation
creates jobs, provides access to domestic and
international markets and encourages tourism.
The growing integration of businesses, economies
and societies around the world is a driving force of
the modern era that will continue to shape and
influence the Arizona economy and lifestyle, wen
into the future.
As Arizona businesses continue to expand their global
reach, they will increasingly require fast, efficient air
transportation to move goods, supplies and personneL As
individuals increase and broaden their connections with the
global community through technological developments, the
demand for air passenger travel will continue to grow On
top of the globalization trend, Arizona's vigorous population
growth will further accelerate the need for air transportation
services and infrastructure Arizona's population is forecast
to reach 8 million by 2025, an increase of 54% over the
state's 2002 population base
an Arizona airport is expected to rise by 77% from 199
million enplanements in 2002 to 353 million by 2025
General aviation operations are projected to grow from
3.4 million in 2002 to 56 million in 2025, an increase of
64% Similarly, the number of aircraft based at Arizona
airports is forecast to expand by 55%, reaching 11,059
registered aircraft
The economic contribution of aviation to the Arizona
economy is projected to grow from $38 5 billion in 2002
to $68.8 billion in 2025 More than 800,000 Arizona jobs
will be linked in some way, either directly or indirectly,
to aviation
2002 2010 2015 2025
Forecast Passenger Enplanements
(In millions)
Arizona's demand for aviation is forecast to increase
significantly in step with the pace of globalization and
population growth The number of airline passengers using
Forecast GlI Operations
(In millions)
2002 2010 2015 2025 2002 2010 2015 2025
Sources: ADOT~ Arizona State Rviatio!l Needs Study 2000; (2) I1laricopa fissociation of
and (31 Pima Association of Governments) Regional Aviation System Plan Update.
2002
Economic
Jobs Activity
2010
Economic
Jobs Activity
2015
Economic
Jobs Activity
2025
Economic
Jobs Activity
Air Carriers (On/Off Airport) 38,751 $4,880 49,043 $6,176 54,623 $6,879 68,672 $8,648
Air Cargo and Courier Agents 25,979 $1,714 32,879 $2,169 36,620 $2,416 46,038 $3,037
Airport Businesses 11,488 $898 14,539 $1,136 16,193 $1,265 20,358 $1,591
Ground Transportation 4,268 $267 5,402 $338< 6,016 $377 1,563 $474
Government Services 3,011 $118 3,820 $225 4,254 $250 5,348 $315
Airport Administration 1,824 $260 2,308 $329 2,571 $367 3,232 $461
Airport Construction 6,193 $517 7,838 $655 8,730 $129 10,915 $916
Subtotal 91,519 $8,114 115,829 $11,028 129,007 $12,283 162,188 $15,442
Non-scheduled Carriers 1,611 $137 1,945 $166 2,179 $186 2,638 $225
Aircraft Sales and Service 15,015 $1,119 18,130 $1,351 20,310 $1,513 24,586 $1,832
Aerial Services 6,229 $421 7,521 $509 8,426 $570 10,199 $690
Government Services 480 $29 580 $35 649 $39 186 $48
Airport Administration 753 $40 909 $48 1,019 $54 1,233 $65
Airport Construction 641 $54 781 $65 815 $13 1,059 $88
Subtotal 24,735 $1,800 29,867 $2,174 33,458 $2,435 40,501 $2,948
Aerospace Manufacturing 95,369 $11,233 123,257 $14,517 141,073 $17,323 203,256 $23,940
Aviation Education 2,314 $253 2,624 $281 2,839 $311 3,322 $364
Air Travelers 205,919 $13,166 256,168 $16,413 286,508 $18,314 355,939 $22,152
Military Aviation 50,192 $3,359 50,192 $3,359 50,192 $3,359 50,192 $3,359
Total 470,708 $38,525 579,137 $47,778 649,678 $54,024 819,998 $68,804
The contribution of aviation to the Arizona economy
was calculated using accepted methods and
guidelines for estimating economic impacts. To the
extent possible, the approach used is consistent
with the 1998 study, The Economic Impact ofAviation
in Arizona, and previous studies commissioned by
the Aeronautics Division.
The primary impacts of the various aviation sectors were
identified through several sources: (1) the Arizona Department
of Economic Security (ADES), which provided industry
specific employment and wages; (2) a survey of airport
managers that provided on-airport employment, operating
budgets, and capital expenditures for Arizona airports;
(3) airport economic impact studies conducted for the
Flagstaff, Phoenix Sky Harbor, Deer Valley and Goodyear
airports in 2002 and 2003; (4) aviation activity levels at the
state's public use airports; and (5) the Arizona Office of
Tourism (AOT), which provided an estimate of annual
spending by domestic and international airline visitors. In
addition, the economic contribution of Arizona's military air
bases was based on the Economic Impact ojArizona's Principal
Military Operations (2002), prepared by The Maguire
Company
Business sales and total economic impacts, including the
spin-off impacts that are generated as spending recirculates
through the Arizona economy, were calculated using the
IMPLAN economic impact modeling system IMPLAN
provided economic statistics that describe that structure of
the Arizona economy in terms of employment, wages and
economic output by industrial sector IMPLAN also provided
Arizona-specific multipliers for employment, wages
and economic output. When applied to the primary
economic impacts, the state multipliers provide an estimate
of total economic impacts in Arizona, including both the
primary impacts of aviation and the spin-off (or "multiplier")
effects The state-specific multipliers account for the goods
and services purchased locally and excludes the impacts of
business, government and personal expenditures that flow
to entities outside of Arizona. IMPLAN is now the most
widely used input-output economic modeling system in the
US. The IMPLAN model relies on data provided by the US
Department of Commerce for inter-industry technology
relationships, and state and county economic data from the
US Bureau of Economic Analysis, the US Bureau of Labor
Statistics, and the US Department of Agriculture.
Forecast economic impacts for commercial aviation, general
aviation, and air travelers are based on forecasts of
enplanements and general aviation operations that were
derived from three system planning studies: (1) ADOT,
Arizona State Aviation Needs StU(1y, 2000; (2) Maricopa
Association of Governments, Regional Aviation System Plan
Update, 2001; and (3) Pima Association of Governments,
Regional Aviation System Plan Update, 200L Forecast
growth rates for individual airports from the various studies
were applied to actual 2002 base year activity Projections for
Aerospace Manufacturing were based on aerospace industry
forecasts of employment and wages prepared by Global
Insight (formerly DRI).. The economic impacts of military
aviation were held constant over the forecast period, consistent
with the 1998 study methodology Aviation education
impacts were projected based on projections of private
educational employment and Arizona population.
