Environmental Engineering Reference
In-Depth Information
However, the benefits should not be overstated. They extend only to the difference
in utility derived from using air transport rather than the next most convenient mode
(Butler and Kiernan, 1988). Equally, the benefits should not be understated. Some-
times the whole utility of the activity could not be experienced if air transport did not
offer a sufficiently low deterrence to travel.
A useful attempt to assess the economic benefits of additional airport capacity
for users was presented in evidence to the Heathrow Terminal 5 inquiry (Coopers
and Lybrand, 1995). The study estimated the effect on individual sectors of the UK
economy. It did this by taking the Civil Aviation Authority (CAA) statistics of trip
generation rates per sector, estimating the percentage of total expenditure per sector
attributable to air travel, and estimating the increase in cost of travel associated with
not satisfying demand at Heathrow. As a result, the percentage increase in the sec-
tors' gross value added was calculated. The study concluded that the additional costs
were equivalent to between 0.3 per cent and 1.1 per cent of a sector's gross added
value, to which extent UK industry would be disadvantaged in competition with
other countries' manufacturers. There would also be costs to foreign business and
loss of inbound tourism.
Over and above the benefits to the users of air transport, society as a whole may
benefit from the activities that become available when the deterrence to travel is suf-
ficiently low. Once again, however, the benefits should not be overstated. Those
benefits already counted as user benefits cannot justifiably be double counted on
society's behalf. The economic benefits are often overstated by being in gross terms
rather than net.
The benefits to users and to society may be economic or social. Most attention
has been devoted to the economic benefits; but it is by no means certain that these
are more valuable than the social benefits (Caves, 1994).
Economic activity
Attempts to derive a comprehensive measure of the economic benefits of aviation
have tended to follow a methodology advocated by the Federal Aviation Administra-
tion (FAA) (Butler and Kiernan, 1986). This measures the contribution made to an
economy by aviation by summing the costed direct, indirect and induced effects
(impacts). Direct impacts are the consequences of the economic activity occurring at
the airport. Indirect impacts are those that are directly attributable to, but occur away
from, the airport. Induced impacts are generated by the direct and indirect expendi-
tures triggering a chain reaction through the local economy through the so-called
'multiplier' effect. Thus, a study for the International Air Transport Association (IATA)
by the Strategic Rescources Institute (SRI) (SRI, 1990) calculated that aviation's con-
tribution to 22 countries in Europe was US$200 billion and 6.7 million jobs. In
common with the many other studies using this methodology, nearly two-thirds of
the contribution came from the induced effects. The implication drawn by SRI
from this assessment was that if the traffic volume increased by 10 per cent less than
for an unconstrained forecast, there would be US$10 billion less activity per year by
the year 2000 (in other words, perhaps 3 per cent less than there would have been in
the unconstrained situation).
