How Aviation Contributes to the Economy

From family vacations and business trips to overnight shipments of perishable and time-sensitive cargo, air travel plays a major role in the global and national economy. When people travel, they are not only booking flights; they are spending money on lodging, food and drinks, additional transportation and shopping. When goods are shipped, revenue contributes to job growth, company expansion – including investments in equipment, technology and fleets.

According to the International Air Transport Association (IATA), over 62 million jobs are supported worldwide by the aviation industry. Additionally, the airport transport industry has a global economic impact of $2.7 trillion, the IATA reports.

Air Travelers: The Economic Impact of Moving People

Globally, more than four billion people traveled via air in 2017, according to IATA, up more than 7% from the year before. As more people continue to travel, internationally and domestically, the economic impact should also rise.

To better comprehend the economic impact, take a look at one of the country’s hottest tourism destinations – Hawaii. In Hawaii, the civil aviation (commercial air travel for passengers and goods) industry accounts for 19% of the gross domestic product (GDP). The national average is 5.1%, according to the latest numbers from the Federal Aviation Administration.

Millions of dollars from international travelers are contributing to Hawaii’s local economy. According to the Hawai’i Tourism Authority’s 2016 Report, visitors spent more than $15 million in 2016. That translates to about $190 spent per day for each air visitor.

Air Freight: How Moving Goods Impacts the Global Economy

Globally, the demand for air freight services is growing, according to the IATA. In 2017, air freight increased by 9%, which is more than double the annual growth rate in 2016. Stronger consumer confidence and expansion of international e-commerce are key drivers, the IATA reports.

Additionally, the IATA predicts the value of goods shipped by air in 2018 will be $5.9 trillion globally. The wider impact, according to the 2017 mid-year report, will be in the supply chain jobs in this sector, as positions worldwide are estimated to have increased to 69.9 million by the end of 2017.

As demand increases, cargo airlines such as DHL, FedEx and UPS continue to replace existing fleets by purchasing new planes with updated technology including digital cockpits and enhanced avionics for take-off, according to a FedEx press release.

The Economic Impact in the United States: Across Aviation Sectors

Civil aviation helps fuel job creation and stability for airlines, airports and other indirect organizations within the hospitality industry. According to the FAA, the civil aviation industry generated $1.6 trillion in the United States in 2014 and supported more than 10 million jobs.

Careers in aviation span from aircraft manufacturing to airport managers to commercial pilots and everything in between. The economy is impacted by several civil aviation sectors, including airline and airport operations, general aviation, aircraft-related manufacturing, air couriers, visitor expenditures and travel arrangements. Below is a look at how each segment contributes to the national economy.

  • Airline and airport operations: The national output (which is the value of all goods and services produced in the economy) by airlines alone was $325.1 billion in 2014, the FAA reports. Airport operations contributed to a $76 billion-dollar economic impact nationwide.
  • General aviation: Nearly $40 billion in economic output in 2014 came from general aviation operations.
  • Aircraft-related manufacturing: In 2014, $9.2 billion was spent on new avionics equipment. Additionally, domestic businesses spent more than $10 billion on aviation research and development activities.
  • Air couriers: The country’s top five states for economic output by air couriers, including FedEx and UPS, resulted in more than $22 billion in 2014.
  • Visitor expenditures: Commercial airline visitors contributed to more than $770 billion in 2014 and supported more than 6 million jobs.
  • Travel arrangements: The travel arrangement and services industry had the largest economic output in five states: California, New York, Florida, Illinois and Texas, totaling nearly $8 billion in output in 2014.
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