Local Air Service and Economic Impact of Small Airports

Abstract

The purpose of this study is to investigate some concepts regarding the role played by local airports in the economies of the regions they serve. The writers attempt to formulate a conceptual framework for the study of air‐ ports' economic development and/or growth effects on local economies. A small empirical survey is used to explore how such a framework could be further developed. The results of the empirical investigation of three small California airports suggest that local‐service airports in small communities have a rather precarious market situation, particularly if they happen to be in the general proximity of large cities served by major hub airports. Consequently, if a local airport is to be a successful economic venture and a rational investment by government, a geographical location that ensures independence from a major hub appears to be essential. In addition, since economic impacts of an airport are indeed a function of the type and amount of traffic it serves, this geographical hub independence may enable an airport to capture more local demand and, in turn, perhaps generate measurable economic impacts.