8 Comments Add your own

• 1. G. Kent  |  March 6th, 2009 at 5:29 pm

  zzzzzzz…..

• 2. Sally Hanks  |  March 7th, 2009 at 4:40 pm

  Exciting stuff! I can’t wait to see what the destinations are….

• 3. G. Kent  |  March 8th, 2009 at 11:14 pm

  Sally, I can’t say I share in your excitement. I’ve seen too many destinations come and go. It’s like a shell game.

  Here’s the dynamic: the airport pays airlines to come here through incentives and subsidies. Then they pay passengers to get on the planes, through MilesAhead. Sometimes they charter airplanes for day trips, losing hundreds of thousands in the bargain.

  Here’s a question that “airport reporter” should be asking: Where is all the wealth that the airport allegedly creates for the community? How much is it annually and to whom does it go?

• 4. Sally Hanks  |  March 10th, 2009 at 8:04 am

  Kent,

  About the wealth that the airport generates to the community: I know that directly and indirectly (basically a dollar in its second transaction from source) it accounts for over a billion a year, but I don’t have exact figures.

  A good way to gauge the significance is to have UPS leave Rockford and see what happens. None of us wants that, though.

  As far as subsidizing passenger service, let’s just call it “priming the pump” - Rockford airport, not unlike other airports, doesn’t necessarily make a profit, or even fulfill a break-even need, when it comes to subsidizing service or having air service at all. The direct and indirect impacts to the community, however, are a vastly different story.

  The people who are best qualified to tell you that story, Kent, are the people that got hired to do ticketing and baggage; the fuelers that are hired on to fuel aircraft; the company that is contracted to work the flight; the fuel company that sells the fuel; the area hotels that accomodate people from Iowa and Wisconsin that drive to RFD for the great deals; various airport concessions that make more money from increased enplanements; more passenger facility charge revenue; rental car companies catering to people flying into RFD; the local DOT receiving greater fund allotments to maintain local highways because of increased userage; more funding for the airport from the FAA because of increased ridership; and, most importantly, aiding in the elevation of Rockford from the status as “biggest U.S. city that nobody’s ever heard of”. All of these are contributors to job creation and the increased circulation of currency in the local economy.

  Now I’m not an Economist, but I’m pretty sure that the airport losing money in a venture that creates jobs and does it’s part to stimulate the local economy is nothing to “zzzzzzzzz” about. What money the airport does lose ends up on the asset side of the community’s ledger when it comes to the regional economy.

  And, without the airport, Thomas Bona’s blogs would be pretty boring with only his fuel price musings.

• 5. rfdbusinessman  |  March 10th, 2009 at 11:25 am

  Well said Sally. Also dont forget the various aviation related and manufacturing tenants at RFD who provide additional jobs and opportunites to the community and our region.

• 6. G. Kent  |  March 11th, 2009 at 6:56 pm

  A billion, huh? Here’s an idea. Let’s spend $100 million dollars to lure every airline in the world to Rockford. Then the economic impact, by your reckoning, would be closer to a trillion. Or a hundred trillion.

• 7. Sally Hanks  |  March 12th, 2009 at 9:30 am

  Kent,

  Surprisingly, that actually is a great idea. However, if we sold your trailer to do it, where would we dig up the other $99,999,000?

• 8. Thomas V. Bona  |  March 12th, 2009 at 11:56 am

  I haven’t had a chance to weigh in before, but Sally pretty much hit the nail on the head here.

  The Illinois Department of Transportation last studied airport economic impact around the state in 2000 (using 1998 numbers). Then, RFD was said to have $719 million in economic impact a year, the highest outside of Chicago. IDOT aeronautics director Susan Shea said a couple of years ago that a conservative estimate would put that at at least $1 billion now. The impact includes things like:
  - The 3,000 full-time and 1,000 part-time workers employed by the airport and related businesses, spending $81,284,070 on salaries in 1998.
  - Property taxes generated by businesses at and near the airport.
  - Construction jobs at and around the airport.
  - Spending at hotels , restaurants, car rental places, etc from passengers and crews flying into the airport.
  - This wouldn’t have been in the earlier study, but the expanding foreign-trade zone administered by the airport generates economic impact by saving members businesses money and helping them grow.

  Really, the major economic impact out of the airport is cargo and real estate right now. But the idea is that those have given RFD a great facility that’s not used much during the deal. So in effect, yes, passenger service is being subsidized by those drivers (and to a smaller extent taxes … but if the cargo and real estate money wasn’t rolling in, you wouldn’t see much room for passenger development).

  But the question is - is passenger service a key “quality of life” component the airport can offer? Does it become an amenity that draws people to live here or at least come here to fly? If 43 percent of the passengers who fly here are from outside of Winnebago County, that’s almost 100,000 extra visitors a year to Rockford.

  I guess the question is … if something is one of the biggest reasons people come to your town and spend money, don’t you want to invest in it?

  And, as I’ll show in an upcoming post, the various monies the airport draws from passenger service are effectively paying for the outlays Mr. Kent cites, and trending toward bringing much more in than spent.

  If you have actual data or information to dispute anything Sally or I have said, I’d love to see it. This is a good conversation to have.

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