Historically, airport economic impact studies rely on surveys of jobs and spending to ascertain the direct labor and expenditure of airport resources. These studies look in detail at jobs and income, direct spending, induced benefits, total output in dollars, and tax revenues. However, in many cases, there are no comparable enterprises to gauge the significance of an airport to the local economy. For example, with the traditional study template, it is difficult to know if a GA airport generates as much economic benefit as a school, public library, or road project—all of which are competing for local funding.
Unlike cost-benefit studies, economic impact analyses do not determine returns on investment. In fact, traditional economic impact methodology cannot be incorporated into the FAA’s current cost-benefit analysis process. The new ACV metric is designed to include both an estimation of economic impact (total output) combined with asset value estimates of an airport. These baseline values are then subjected to economic sustainability assessment factors, referred to as Value Modifying Factors (VMF), to reach an overall ACV (see Exhibit 1).
The six Value Modifying Factors include:
1. Regional Airport Resource - assesses what types of aircraft fly in and out of an aviation facility as well as the population served.
2. Airport Protection - assesses the actions a community takes to increase or protect the value of its aviation related investment(s). These include land-use compatibility, height hazard zoning, runway safety areas, and runway protection zones.
3. Location/Access - convenience is measured by relative location to economic activity centers as well as surface access to interstate highways, regional arterials, local arterials and passenger/freight facilities.
4. Business Use Index - considers if an airport accommodates business aircraft that directly contribute to jobs and commerce in the ACV scoring method.
5. Expandability - provides an assessment of whether an airport can expand, both on and off airport property, thus ensuring future accommodation of aviation demand.
6. Community Commitment - helps to measure the support an airport receives from its sponsoring community. Communities that have current airport master plans and capital improvement programs that are on file with funding agencies are proactive. Airports who forego grants because there is no matching local share are, by default, not considered supported by their communities.
During the evaluation process, two estimates are used to determine the asset value of the property and facility. Replacement value is calculated by multiplying unit construction costs by the existing quantities of facilities. Estimates of an existing depreciated facility value employ “useful” life estimates of system airport facilities, thereby reducing the asset valuation for all but the newest of facilities. See the Airport Replacement Value Input Sheet.
As a part of the study, the ACV metrics were applied to 41 GA airports in North Central Texas. Values for the monetary metrics for the airports were then aggregated and weighted according to VMFs to arrive at ACV results for the five subregions in the study.
| Subregional Results of Part A - Current ACV (in millions) | |||||
|---|---|---|---|---|---|
| Total ACV | Total Economic Output | Existing Value | Replacement Value | Weighted VMF | |
| North | $3,133 | $1,883 | $1,230 | $1,708 | 20 |
| West | $216 | $98 | $119 | $152 | 15 |
| South | $357 | $63 | $294 | $383 | 20 |
| Central | $2,265 | $1,413 | $852 | $1,111 | 22 |
| East | $1,813 | $1,311 | $502 | $753 | 17 |
| Combined Totals | $7,764 | $4,767 | $2,997 | $4,106 | 94 |
In summary, the ACV metric is a measure of airport
facility values in terms of existing/depreciated asset
value and its contribution to the local economy in
terms of jobs, income, and total economic output.
VMFs offer additional measures of qualitative value for individual airports.
Results of these studies provide ways to understand more completely the impact and benefit of capital improvements in the community in which the airport is located. In turn, the local leadership can be more confident in how capital investment dollars are directed in order to gain the highest rate of return.
On-going system planning efforts will look to further develop Part B - Future ACV, which aims to assist
federal, State, and local aviation planning efforts in
identifying
the highest potential return on investment
related to
investments in airport infrastructure.
