Study verifies Memphis airport's potential as aerotropolis
April 26, 2009
By Wayne Risher
As a young man, Hernando resident Bo McAninch saw a solid future in the jets cruising the skies over his native DeSoto County. He took his mother's advice and became an aircraft mechanic.
"I did see aviation at that time as being a good field to be in, because I didn't see that people would ever stop flying," said the 43-year-old FedEx employee. "For me, it's been a good deal. I've worked for the same company since 1990, and their worldwide base is 20 miles from my house."
Still, McAninch was surprised at the enormity of Memphis International Airport's economic impact, as touted in a new study done for the Memphis-Shelby County Airport Authority.
"Those numbers do seem extremely large," he said, referring to key findings about the airport's direct and indirect impact in 2007:
$28.6 billion pumped into the five-county metro area's economy
220,154 jobs (34.3 percent of total employment) linked to air cargo, air passenger and airport construction businesses
Nearly $8 billion in earnings for area residents
The world's largest cargo airport creates most of the cash flow, though a Delta passenger airline hub provides crucial connections for business travel and tourism.
Air cargo, more than 95 percent of it handled by , yielded $27.1 billion in economic impact; followed by air passenger operations, $1.3 billion; and airport construction, $138.3 million. An additional $760 million was traced to spending by tourists flying into the airport.
Airport Authority president and CEO Larry Cox is scheduled to report on the study today at an Airport Cities World Conference in Athens, Greece. Memphis is preparing to host the conference in 2011.
Even Cox was surprised by the numbers.
"I had anticipated maybe $25 billion, but to see it at $28 billion is incredible."
Airport boosters plan to use the study to advocate continued funding and to support efforts to promote the city as America's aerotropolis, authority chairman Arnold Perl said.
The aerotropolis effort, led by the Greater Memphis Chamber and Memphis FastForward, seeks to harness airport and other transportation assets to drive economic development.
Perl said the study supports the idea that the airport is the heart and soul of America's aerotropolis.
"We have an uncommon level of access to the world economy because of this airport."
Jeff Wallace, research associate professor with the University of Memphis Sparks Bureau of Business and Economic Research, which authored the study, said, "This tells us we need to go out and support this sector of the economy as much as possible."
"It also signals a need to diversify the economy, just as you would a financial portfolio," Wallace added. "It may appear we have all our eggs in one basket. I want to protect those eggs and keep them strong, but I also want to add a few more."
One way of diversifying, Greater Memphis Chamber president John Moore said, is to recruit businesses that want to be in Memphis because of FedEx's dominance in the global supply chain.
The study shows strong growth since a 2004 study.
Adjusted for inflation, the study found total economic output grew 25 percent in three years, earnings increased 22 percent and employment grew 33 percent. The 2004 study tallied 165,091 airport-related jobs, about one out of four.
Wallace attributed the growth to FedEx's success in linking far-flung pieces of the world economy.
"What that really boils down to is the past decade has been about globalization. Having the FedEx headquarters here means Memphis stands to benefit from anything positive in regard to globalization."
Air cargo grew just over 9 percent from 2004 to 2007, to nearly 4.4 million tons; passenger airline operations grew an overall 1.36 percent, but the international portion of the total posted a 14.8 percent increase.
"Even in a severe recession, the positive impact of Memphis International Airport is increasing," the study said. "The airport provides an essential ingredient in stabilizing the local economy in a downturn while creating opportunities in an expansion."
-- Wayne Risher: 529-2874
MEMPHIS INTERNATIONAL AIRPORT ECONOMIC IMPACT
Source: An Economic Assessment of the Impact of the Memphis International Airport