1 I separated the presentation into three parts: Passenger - PDF document

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I separated the presentation into three parts: ‐ Passenger Connections: Hartsfield ‐ Jackson’s role as the single most ‐ used passenger airport in the country; ‐ The airport’s position as an engine for local industrial production; and finally ‐ What regional policies could help expand the economic impact derived from Hartsfield ‐ Jackson. 2

Starting with the passenger side of the airport. 3

According to our statistical sources, Atlanta moved nearly 29 million local passengers in 2011. This is the number of passengers that actually started or ended their trip at Hartsfield ‐ Jackson. It’s is a strong number, ranking 8 th in the country and relatively in ‐ line with the metro area’s economic ranking. It’s also a growing number—representing a 13 percent increase between 2003 and 2011— and stands as evidence of the airport’s expanding role in connecting Atlanta to the country and world and world. But most may be used to seeing higher traffic numbers than this from the local air hub— more on that in a second. 4

Over 3 million of those local passengers travel internationally, and this is the breakdown by world region. Over a third travel to countries south of the U.S., with another quarter traveling to Western Europe. But this distribution is already changing as we speak, shifting from more developed markets like Western Europe and Canada to the burgeoning markets in South America, Asia, and the Middle East. For example, Seoul is now the single largest ‘passenger partner’ with Atlanta a striking comment on Atlanta’s Korean economic fluency with Atlanta, a striking comment on Atlanta s Korean economic fluency. If you’d like to see a full list of the major global ‘trading’ partners in aviation terms, we’ve provided a list of the top 200. 5

But here’s the reason you may be used to seeing higher passenger numbers at Hartsfield Jackson: a large share of your passengers are just pass ‐ through, forced to transfer at Atlanta’s well ‐ calibrated passenger hub. Across the entire US, Atlanta’s transfer share is second only to Charlotte in terms of reliance on transfer passengers for total business. While there is essentially no expectation that Delta would leave Atlanta anytime in the future, you can see what might happen to your total passenger numbers if they did In the end this could impact air connectivity your total passenger numbers if they did. In the end, this could impact air connectivity. To put these shares in comparison, metros like New York and Los Angeles see no more than 10 percent of their passengers as pass ‐ through. They simply use their airports more for local activities than as the middleman for other pairs of places. 6

There is a major economic implication from that difference between types of passengers served. According to research from my colleague Zak Neal at Michigan State, there is a direct correlation between jobs created based on airport passenger types. Metros focused on connecting passengers, places like Atlanta and Charlotte, help generate jobs at the airport—in other words, more transportation ‐ focused jobs. These connecting passenger levels were not found to have an effect on broader job categories Conversely passenger levels were not found to have an effect on broader job categories. Conversely, metros with more centralized operations—passengers actually leaving the airport—had a stronger effect on growing jobs beyond the airport. That leads to a natural question: how can the Atlanta region build on its success in filtering passengers to help grow its broader regional employment base? 7

Now, turning to freight operations. 8

First, a bit of context setting. Air freight is a high ‐ value business, focused on moving low ‐ weight, high ‐ value products. In this sense, it the opposite of freight rail and a strong compliment to seaborne trade when it comes to international freight. Air freight is also a growing mode within the domestic and global marketplace. Interestingly, air freight is relatively balanced between exports and imports. This stands in sharp contrast to our port ‐ based trade, which is heavily import ‐ focused. 9

As it stands, Atlanta is already a major player in local freight moved by its airports. This statistic excludes those metros focused exclusively on pass ‐ through freight, like Memphis and Louisville. Atlanta is sixth in local global freight value, which is even better than its local OD passenger ranking. This includes extensive trade to our major national trading partners, like China, Germany, and Brazil. But it far trails the leaders in New York, Chicago, and Miami, all of which ‘outpace’ Atlanta in terms of goods trade as a proportion of its economic output. This suggests these metros have a stronger global connection via high ‐ value products either locally produced or consumed, especially for New York, or have created a unique environment to add value to goods shipped between other US markets and their global peers, such as Miami. 10

So what commodities tend to get shipped by air? In other words, what do I mean by high ‐ value? Four commodity categories dominate air cargo: Machinery, tools, and manufacturing products ; Electronic products; Medical and Scientific products; and Chemicals and plastics. These four categories constitute 89 percent of all US freight value shipped globally by air. This is a striking concentration within just a handful of commodity types. 11

But this raises a new question: what does Atlanta produce in these commodity categories? Unfortunately, the answer is not enough. These are the percentages of the regional economy that make products in these commodity categories. As you can see, only 3.6 percent of the Atlanta economy focuses on production in these advanced industries . These products are a vital component of a regional transition to a more productive growth model, one that leverages US advantages in an educated workforce technologically ‐ advanced capital investments and product in an educated workforce, technologically advanced capital investments, and product innovation. Now, these statistics wouldn’t include the value chain emerging in global production networks—a sort of central command that does operate out of Atlanta for firms like Coca Cola—but it doesn’t deny the fact that not enough stuff is actually made within the region. Without ample local production, it will be difficult to truly g p p , y maximize freight business at the airport. 12

Now that I’ve talked about where you are, I want to spend the last few minutes talking about where you could be going. If it wasn’t clear already, there is a tremendous amount of opportunity to create more economic value from Hartsfield ‐ Jackson. And it all starts with a regional approach towards a rapidly ‐ growing region. 13

This was the size of the Atlanta metropolitan area in 1970—just those core five counties. Over the course of four decades, the metro area grew by over 6,700 square miles and added over 4 million people. To put that in comparison, that’s a bigger footprint than the entire state of Connecticut. The question is, how do you better unite a region growing so fast, both in terms of people and geography? Your airport can play that uniting role, but it should foremost be d h ? Y i l h i i l b i h ld f b considered a facilitator rather than a driver. It’s about the regional adjustments you make outside the airport that can drive more business inside it. 14

Returning to the passenger side, Atlanta has quite a few distinct advantages: ‐ You have some of the broadest connectivity of any US metro, helping Atlanta residents and businesses fly directly to where they want to go, and vice ‐ versa those looking to visit and do business in Atlanta. ‐ Your airport operations are second ‐ to ‐ none, ensuring an enormous volume of flights can safely operate throughout the day and night. ‐ Finally, you have a substantial high ‐ skill service base, those industries most likely to take advantage of an airport advantage of an airport. The major opportunity, as many in the region already know, is to figure out how to get more of those transfer passengers outside of the airport. A flight landing from Europe may be global, but it will truly help Atlanta if most of its passengers leave the airport and interact with the full local economy. When it comes to the passenger side, this should be the major goal to create more value from what you already have—and in this case, the outcome could be substantial job growth. 15