Flying High in the Aviation Economy

In the modern day, globalised world, air travel is critical to the operations and success of most businesses across most sectors. From transporting goods, visiting key clients or customers, providing access to highly-skilled specialists, encouraging inward investment, or simply bringing in tourists to the local area, it is undisputed that strong air connectivity and economic success go hand-in-hand.

There has long-since been controversary around air travel. There are numerous policy barriers to the expansion of airports and aviation, including concerns around noise pollution and wider environmental impacts, strict planning regulations and shrinking public funding. However, it is important to fully understand the economic impact of airports and aviation related activity, in terms of creating jobs, but also in what they allow businesses and individuals to do that they wouldn’t otherwise do.

A recent study found that European airports and associated aviation activity support almost 12.5m jobs, or €675bn in GDP, every year. This equates to over 4% of the entire European economy. Further, it is estimated that a 10% rise in a country’s air connectivity is associated with a 0.5% increase in its GDP per capita.

Creating ‘Sustainable Airports’ is a focus for the UK Government in the current wave of Science and Innovation Audits, which are identifying the UK’s comparative advantage in research and innovation. These are airports which aim to reduce their environmental impact, prioritise economic growth and generate social progress. This movement towards creating environmentally-friendly airports was first started by Chicago O’Hare International Airport, who created a blueprint manual of how to do so in 2003. Revolutionary plans have been proposed by the architects of Heathrow and Gatwick to move towards the ‘sustainable airport’ status. This is particularly timely for Heathrow, the world’s second busiest airport, given the current negotiations over building a 3rd runway. Gatwick’s 10-point plan aims to increase economic and social growth while cutting carbon emissions, improving air quality, eliminating noise pollution, reducing energy consumption by 20% and increasing waste recycling.

In Scotland, the two largest airports, Glasgow and Edinburgh, play a driving force in the national economy. Edinburgh Airport is Scotland’s busiest airport and is estimated to contribute almost £1bn annually to the Scottish economy and support 23,000 jobs across the country. The impact of Glasgow Airport, however, is likely to be diluted by the recent decision by Ryanair to move 23 routes away from their Glasgow base.

But it is not just money-making opportunities that are facilitated by access to air travel. There are strong implications for societies and communities. Airports in more rural, particularly fragile, areas can add to community cohesion and help to alleviate a sense of social isolation. They give greater travel options and holiday destinations for those living within the catchment area and can help boost the profile of the locality or region as a destination itself. For example, how much has the famous beach landing on Barra done for the island’s profile? How crucial is Islay’s air connection with Glasgow to bringing high-end American and European tourists to the island for the whisky and golf offer?

Currently underway is our study to undertake an economic and social impact assessment of Inverness Airport. It also aims to examine the wider catalytic impacts that the airport has had on the region. With a catchment area of 330,000 people and approximately 860,000 passengers in 2016/17, these benefits are likely to include the impact on the region’s tourism industry, particularly given the popularity of the North Coast 500 route launched in 2015, the ability of businesses to attract and retain staff and customers, and also the direct employment impact of the airport and its tenants itself.

For more information contact Susan Staiano on 0845 120 6244 or susan.staiano@ekosgen.co.uk