Study Shows $28.6 Billion Annually Economic Impact From Memphis International Airport
April 26, 2009
One in three Local Jobs Tied To the Airport
MEMPHIS, Tennessee – According to a new economic impact study commissioned by the Memphis-Shelby County Airport Authority and prepared by the Sparks Bureau of Business and Economic Research/Center for Manpower Studies at Fogelman College of Business and Economics, The University of Memphis, Memphis International Airport has a total economic impact on the community of $28.6 billion.
In addition to directly or indirectly pumping more than $28 billion a year into the mid-south economy, Memphis International and the businesses that depend upon it provide just over one-in-three jobs in the metro Memphis area.
“Memphis International Airport is without question the most important asset we have in the community for business and tourism growth,” said Arnold Perl, Chairman of the Memphis-Shelby County Airport Authority. “Over the last few decades, the airport has growth from an important local asset, to an internationally respected cargo and passenger hub, to our latest transformation into the centerpiece of America’s Aerotropolis.”
In 1998, the economic impact of Memphis International was calculated at $12.9 billion. In 2004, the study showed a $20.7 billion impact.
Cargo operations account for a majority of the total $28.6 billion in annual impact – led by the operations of FedEx, with passenger operations – led by the new Delta/Northwest combined airline – accounting for some $1.3 billion annually, and a construction project impact of nearly $150 million.
Highlights from the University of Memphis Study include:
• Total combined direct expenditures (which may be thought of as sales or revenue) of FY 2007 cargo and passenger operations and construction projects and expenditures at Memphis International Airport totaled nearly $13.5 billion, resulting in total output in the Memphis MSA of almost $28.6 billion, earnings of nearly $8.0 billion, and the generation of over 220,000 jobs.
• The impact of MEM accounted for 34.3 percent of total MSA employment in FY 2007, or just over one in three jobs. Both air cargo operations and air passenger operations have a substantial impact on the local economy, but the largest share of that impact comes from air cargo.
• In 2007, Memphis International Airport (MEM) ranked 36th of all U.S. airports in passenger enplanements and 1st in cargo volume.
• Memphis International Airport has been the world’s busiest cargo airport since 1992, and operations at the FedEx Super Hub account for over 93.6 percent of all cargo at MEM.
• In 2007, cargo operations at MEM had a total impact of more than $27.1 billion in output (the production of goods and services) while supporting a total of 208,319 jobs and total earnings of over $7.5 billion.
• The direct and indirect impacts of passenger operations were in excess of $1.3 billion in output (the production of goods and services), while supporting a total of 10,307 jobs and total earnings of nearly $373.0 million.
• Passenger operations of almost $631.0 million in value in 2007 are estimated to have resulted in an impact of over $711.0 million in indirect expenditures.
• In 2007, visitors who came via MEM to the Memphis area had a total impact of nearly $760.0 million on output (the production and sales of goods and services) and over $246.0 million in earnings while supporting almost 10,700 jobs.
• Memphis International Airport strongly impacts the local tourism and hospitality sectors. Without this vital connection, many of the area’s tourists and business visitors might not come to Memphis.
• It is estimated that visitors who came to the Memphis area via MEM spent a total of nearly $380.0 million in 2007.
• Direct construction and capital improvement expenditures of over $68.2 million in 2007 were estimated to have resulted in an impact of over $70.0 million in indirect expenditures for a total impact of nearly $138.3 million in output, 1,528 jobs, and total earnings of almost $49.2 million.
• A survey of Memphis area businesses revealed that Memphis International Airport plays a critical role in the business activities of a majority of the respondents.
• Over 74.0 percent of business survey respondents use Memphis International Airport to transport company personnel, while more than 66.0 percent use it to transport customers and business associates.
• Significantly, 52.8 percent of the respondents ranked as important or very important the economic impact of MEM on their overall level of business activity.
• One of the more intriguing questions in the survey was, “Why is your company located in the Memphis area?” Over 43.0 percent of the respondents answered “yes” to at least one response listed, including “To take advantage of the time savings of being near the FedEx Hub” (14.4 percent), “To take advantage of the Northwest Airlines* passenger hub” (16.0 percent), “To take advantage of Memphis’ rail and highway infrastructure” (12.0 percent), and “Close proximity to a large portion of the nation’s population” (30.4 percent). Significantly, 25.6 percent chose more than one of these options, a reflection of Memphis’ comparative advantages within the transportation and distribution industries.
• When asked “How important is access to air express services,” 37.6 percent responded that it was important or very important.
• A majority of respondents (56.0 percent) agreed or strongly agreed that growth at MEM would automatically cause their businesses to grow, while 38.4 percent agreed or strongly agreed that a growing airport facility would provide an incentive for their company to move more activities to Memphis.
• A majority of respondents rated the quality of passenger and cargo services at MEM as high or very high: 76.8 percent for passenger services and 60.0 percent for cargo services, both a reflection of the benefits of MEM being home to both a passenger and cargo hub.