Sometimes you might wonder exactly why people care so much about debates over investment in infrastructure. Isn’t it just all politics? Does it matter?
See, in 2000, two very important airport infrastructure policy decisions were made. The first, allowed local communities to raise more local resources to finance infrastructure by increasing the cap on the passenger facility charge from $3 to $4.50. The second decided that funds sitting in the aviation trust fund and paid by air travelers should not just sit there, but should be invested. So the Airport Improvement Program was increased and money paid by air passengers for capital improvements was spent on its intended purposes.
As a nation, we (through our Congress and President) decided to increase our investments in airport infrastructure. Our study, the first undertaken since those policy changes went fully into effect, shows the very positive results.
America’s airports support 10.5 million jobs. America’s airports support $1.2 trillion in economic activity, larger than the GDP of South Korea. “Airports, Inc.” directly employs 1.3 million people, making it the second largest employer in the nation, behind Wal-Mart. Total airport payroll equals the total payroll of the State of Michigan. The total economic clout of airports: 8 percent of U.S. GDP and 7 percent of U.S. employment.
Those are big numbers. But if you are still not convinced, consider this: during that time, the jobs number increased by 56 percent. Total payroll has gone up over 90 percent. And the total contribution to the output of the American economy has more than doubled. All this has happened despite the industry being devastated by the largest terrorist attack in history. All this has happened despite the most severe economic downturn since the Great Depression, including spikes in the price of fuel.
This economic growth occurred because we decided to invest in our economic future. In economic times as difficult as most of us will ever experience, those investments paid off.
That is why it is so discouraging that the recent FAA bill leaves in place federal limits on what airports and local communities can do to generate resources. That is why it is so discouraging that the president’s budget reduces investment in airports. That is why it is so discouraging that local communities cannot raise their own resources because of decisions made in Washington. We are putting the future in peril, just as we are set to take off.
Some have called for a new national airline policy, designed to promote the financial strength of airline companies. I am a strong proponent of strong airline companies. But the purpose of the air transportation system is the movement of people and products to destinations and markets. It is not to ensure shareholder value for airlines; that’s what airline executives and boards are supposed to do.
We do need a new national AVIATION policy, looking at all aspects from NextGen to financing airport infrastructure to the regulatory environment in which aviation must operate to the tax structure, all of it. It must be designed to strengthen the air transportation system, not merely any one component of it.
We are now stepping back from investments in aviation at the same time as our competitors around the world are stepping up. We are in peril of becoming what the steel industry became in the 1970’s and 1980’s, out of date and non-competitive.
We have a chance to avoid that. Our study shows the benefits in terms of job creation and economic impact when good decisions and good investments are made. I worry that the next study will show when the opposite happens.