Airport Impact Study Raises Questions

By Brandon Butler

Worcester Business Journal Staff Writer

Today

A recent study published by the state claims that Worcester Regional Airport, through both direct and indirect benefits, contributes more than $50 million in economic benefit to the region, supports more than 400 jobs and a payroll of more than $13 million. But not everyone is buying that.

The study, which the state hired South Carolina study group Wilbur Smith & Associates to produce, uses what's known as a "multiplier effect" to determine the airport's impact on the local economy.

According to state figures, the airport directly employs about 80 workers, including baggage handlers, rental car workers, staff and security administration personnel. There are another 23 full-time workers in Worcester from MassPort, which, along with operating Worcester Airport, also runs Boston's Logan Airport and Hanscom Airport in Bedford.

The theory behind the multiplier effect is that the wages those employees earn are recirculated in the local economy, creating indirect economic impacts. For example, an employee working at Worcester Airport spends his or her salary at a local grocery store, which benefits the regional market.

The study shows that those 103 jobs go on to support 418 jobs in the region.

Victor Matheson, an associate professor of economics at the College of The Holy Cross in Worcester, said the multiplier effect the study uses appears rather large. Normally, multiplier effects are in the two to two-and-a-half range, he said. Having a multiplier of about four "seems high," Matheson said.

Various factors, such as how large a geographic area the benefits of the airport are spread over, can influence how large a multiplier effect there will be, Matheson said.

State transportation department officials involved in the study said the report uses a Federal Aviation Administration-approved multiplier effect. The study says that, "for every $100 spent on aviation-related businesses, an additional multiplier of $56 is created within Massachusetts."

Others question the impact of the study as well.

"I think you really have to take these studies with a grain of salt," said Worcester City Councilor William Eddy, who represents the Ward 5 area where the airport is located, on the western side of the city.

Eddy said that despite any criticism of the study's methods, there have been positive trends at the airport in recent years.

Notably, in 2010, the city sold its control of the airport to MassPort. That sale relieved the city of deficits related to airport operations. But Eddy said there's an opportunity to attract businesses to the adjacent airport industrial park that can utilize the airport's location to transport freight.

"We're heading in the right direction with Worcester Airport," Eddy said. Still, he admitted, "it's not going to become Logan west" overnight.

Economic Engine?

State officials defend the airport as an "economic engine for Central Massachusetts and a strategic asset for the region," MassPort spokesman Matthew Brelis wrote in an e-mail. He said as Logan Airport continues to be crowded, regional airports such as Worcester's are "poised to see a greater share of the region's economic growth in the future."

In fact, he said ridership and the number of flights from Worcester have increased in each of the past three years. The number of passengers has risen from 46,007 in 2009 to 107,521 in 2011, while the number of flights at the airport has jumped from 517 to 832.

Still, state and local officials admit that the airport gets nowhere near the use it received in the 1990s and early 2000s when multiple carriers served the site.

Christopher Willenborg, administrator for the Massachusetts Department of Transportation's Aeronautics division, said it's been a tough past few years for all airports because of the economic situation.

"It's a very tough time to foster new business anywhere," he said.

Officials with the airport's lone commercial carrier - South Carolina-based Direct Air - said the low-cost airline is committed to the airport. Direct Air flies to three Florida destinations now and will add its seasonal service to South Carolina this spring and summer. In May, it plans to pilot trips to San Juan, Puerto Rico, for a six-week period.

"Our goal is to increase frequency, add more destinations, and serve more passengers," said Direct Air Managing Partner Ed Warneck. "The net result will bring more jobs, direct spending, and economic impact to Central Mass and the Worcester region."

Despite some who claim the biggest impediment to the airport is the lack of an access road, Warneck said weather issues and a shortage of marketing funds to promote the airport are the single biggest issues holding it back.

State officials say they've been investing in the airport. According to MassPort, a $6 million runway reconstruction and resurfacing project was completed in 2010, while last year more than $800,000 was spent on terminal building improvements and security systems.

Click here to read the executive summary of the state economic impact report regarding Massachusetts airports. (Warning: This is a large PDF)