Research reveals airports’ contribution to NZ Economy

Groundbreaking research reveals airports’ contribution to New Zealand economy

The full impact New Zealand’s airports have on our economy has been identified for the first time, in a major study commissioned by the New Zealand Airports Association (NZ Airports).

The findings were revealed today at the New Zealand Airports conference being held at the Marlborough Convention Centre. The research, the first national assessment of the added value that airports provide regionally and nationally, found the direct and indirect contribution of airports represents 25 per cent of the New Zealand economy.

In 2012, airports contributed $419m directly to GDP but that increased to $40bn when taking into account the flow of benefits into communities.

Airports also generate significant employment. More than 12,645 people are directly employed by airports and in air transportation, while around 78,810 work within airport environs. However, once the flow-on benefits into other industries are taken into account, the overall number of jobs generated is estimated at more than 710,000. A third of New Zealand’s workforce is linked to airports.

New Zealand Airports Chief Executive Kevin Ward said even he had been surprised to learn the full scale of the sector’s contribution.

“It highlights to me the importance of protecting the role of airports as economic generators and providing for their growth in the future.

“Airports play a crucial role in tourism, unlocking economic opportunities, bringing in foreign capital and providing export opportunities, so provide a critical service not only in international business travel but in linking regions with business opportunities in other regions,” he said.

“Significant business also goes on within the environs of airports. But something the research highlighted is the very considerable added value airports bring to regions and communities.

“Business clusters have developed around airports and are continuing to grow. They begin with businesses which rely on a direct connection with the airport, such as air freight companies, but then take on a life of their own and snowball.

“More companies, such as warehousing and company headquarters, then move in because they benefit from the location and from clustering together. We are seeing examples of this happening all over New Zealand.”

The research, carried out by Market Economics Ltd, examined the economic and social contribution of 33 New Zealand airports.

Researchers used a wide range of information ranging from airports’ financial reports to Statistics NZ tourism expenditure figures.

They also took into account the airports’ operations, their environs and surrounding business areas and the ‘catalytic’ impact of airports in supporting activities in other industries and the wider economy.

They found the biggest economic benefits generated by airports were through tourism activity. The second major source of economic contributions was international trade and business travel followed by the wider economic effects of supply chains and activities facilitated by airports.

As businesses operating within local economies, airports’ spending also creates demand in the local economy for goods and services. NZ Airports’ members spent around $350m last year on goods and services.

“Airports are large businesses in their own right but the main contribution they make is through the connections they offer,” said Mr Ward. “This research clearly identifies, for the first time, the very significant contribution airports are making to the New Zealand economy, and the need to safeguard airports for the future.”

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