METEORA AIRPORT ECONOMIC IMPACT
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METEORA AIRPORT AND THE ECONOMIC IMPACT GENERATED IN THE REGION OF WEST THESSALY


 

METEORA AIRPORT AND THE ECONOMIC IMPACT GENERATED IN THE REGION OF WEST THESSALY ANDCENTRAL GREECE  

 The Economic Impact of Airports    Airports are major components in the aviation industry, integral to its success and growth and geared up to meeting the demands of growing markets in business and tourism air travel. Airports represent a significant asset for their local regions.  They create wealth and employment opportunities in their own right.  They also provide high value communication and distrubution links between developed, interdependent markets.  The economic significance of airports is such that it sould be reflected in policy making in industry and in government.  For these reason,  airports in Europe have an  increasingly important role to play in the formulation of aviation industry policy and regional economic development policy.  Their significant economic contribution should be fully acknowledged by regulators when they are framing policy affecting airport development. 

  Strategic significance of Airports

 

Airports are the focal point of aviation industry activity.  They are integral to the realisation of national and regional economic goals.  The globalisation of economic relationships has been assisted in no small degree by the time and distance conquering contribution of the aviation industry.  The location of airports has become of major strategic significance to the effeciency of industry and their ability to maximise national and international market opportunities.

   Airport significance is heightened by the interactive dynamics anticipated for the Single European Market.      Airports form geographical points at which the economic benefits of aviation activity converge.  The benefits are distrubuted regionally and nationally,  with many of the benefits captured in the airport Meteora™s immediate local area.     National and regional policies for economic consolidation, diversification and revitalisation depend,  to a considerable extent,  upon the ability of regions to offfer connections with major markets.  This includes communication between centralised corporate headquarters and financial institutions.       It is well known that there is a general tendency for business to centralize,  commonly in capital cities.  Major airports,  whose presence strengthen this dynamic,  take advantage of this.  However,  regional airports such as Meteora Airport add abaluable additional element to economic strategy.  They help to counteract the tendency toward centralisation and spread economic development into the regions.  Corporate models which devide their activities between regional production centres and capital city headquarters are well served by regional airports. The airport Meteora is strategic economic significance has grown  as markets have become more interdependent in the developed economies.     Airports are contributing to business competitiveness and efficiency with rapid movement of goods and personnel.   Air travel connectivity parallels the advance in communications generally.  Telecommunication links have allowed rapid data, document voice and image transfers around the world.  They have transformed global trading in stock markets.  The abiliy to access markets and suppliers with speed and ease has become a modern business expectation.  Whatever other means of contact with distant market places,  there is often no substitute know howÎ industries which can have significant economic significance of their own.     They,  like airports themselves,  create demand for aœleading edge skills,  which in turn demands that academic and training  institutions be centres of excellence and thus fuellers of sustainable competitive strength.     For those companies whose market penetration ambitions extend to international opportunities,  air travel is distinctly advantageous.  These businesses provide the vital export products necessary to generate regional and national wealth, sustain economic growth and balance trade.   Of course access opportunities work both ways with airports being the entry points for imported goods and services.  Efiicient markets thrive on efficient exchange process and airports are key components in facilitating those processes.  As part of strategic economic development plans,  airports can be instrumental in developing their regions to its full potential.  As a focal point of distribution and exhcange,  the airport helps to develop a larger role in national and international economic activity than its region would otherwise achive.  The full potential of airports will be realised when the form part of local, regional, national and European economic strategies. 

      Airports as economic magnets

 

     Airports attract industries which rely on good communications.  They are therefore an assent in marketing the potential of regions as locations for inward investment.  Similarly,  they add a marked competitive advantage to tourism industry development including business conventions, conferences and trade exhibitions.

       Airports can contribute to the formation of International Business Districts in the vicinity of airports,  in corridors of growth along airport access routes or by amplifying the service sector activity in traditional Central Business Districts.  They can be essential to City/Regional development strategies. 

    Ireland Shannon Airport is a case of a regional airport which drives and leads economic development.  Shannon , situated in the rural west of Ireland,  used its airport as a platform from which to attract mobile international investment and to build an extensive export tourism industry along the west of Ireland.  This led to the economic trahsformation of an entire region from an agriculture-based economy to Ireland leading regional centre of high-tech manufacturing and traded services industries.  Shannon Airport was the catalyst for this transformation.

     Airports as substantial contributors to Public Revenues      Airports as commercial entities contribute financially to their local, regional and national economies.  It is important to emphasise that as part of the direct and indirect impact,  airports and airport related economic activities generate considerable revenue for each level of government through a variety of tax regimes.  VAT contributions, local land rates and taxes,  personal income taxes of employees and tax paid on business revenue can be considerable.       Why the West Thessaly and its region? 

      The basis for the Economic Impact of an airport must be its region.  Of cource in a wider sense,   the whole country benefits from the airport.  However,  a physically large area weakens the effects and it is therefore essential to tailor-make the region to the effects we wish to present.  If the airport area chosen is too large, the rate of the airport-related income and emplyment to the total income and employment is rather small- and on the other hand,  if the region chosen is too narrow the effect becomes unbelievably high.

 

Π        Our approach in defining the region of West Thessaly and Central Greece was based on these factors:

 

    -Using the natural political region  if the airport is the region only airport,  or designing the region in accordance with the infrastructure i.e. the catchment/distribution area for leisure passengers, business passengers and airfreight, or

     -drawing together all local communities in which more that a fixed percentage of the total workforce is employed directly or indirectly by the airport as a whole.

       What are the direct and indirect economic impacts obtained from Meteora Airport?  

     The generation of quantifiable economic benefits commonly divide into three main categories Î²Β€Β“ direct, indirect and induced.

 

Î“Β˜                                    Direct economic impacts result from the activities on the airport site carried out by a wide range of agencies and businesses.  Airport operator itself and aviation and non-aviation business is carried out by other companies located on the airport.  These include the following:

 

     -Airlines

     -Freight Forwarders

      -Non-Airport Company Security

  -Ground Handling

   -Flight Catering

     -Fuel Services

      -Retail Stores

      -Tax Free Shops

-Restaurants

     -On site Hotels

      -Car Parks

      -Aircraft Maintenance

   Many indirect impact arise from the economic ativities of off-site enterprices that serve the airpor users.  Such service providers may include travel agencies and tour operators,  hotels,  restaurants,  retailing and tourist attractions and off-airport car parks.    The overall total impact of the airport comprises the direct, indirect and induced impacts.  The latter is a calculation of the successive rounds of spending generated by all the recipients of the direct and indirect economic benefits.  The induced impact is derived by multiplying the sum of direct and indirect benefits by a factor;  hence induced impact is commonly termed the multiplier effect.     What are the qualitative effects of Meteora Airport? 

  These cannot be expressed in figures but can only be described as follows:

     Reputation Effect     The airport reputation is based on characteristics such as: 

    -being a origination or destination point or hub

      -being located near a major city (Trikala)

     -accessibiliy to important tourist destinations or industries

      -good infrastructure (highways, utilities,  telecommunications)

    -unrestricted air space

  -optimal wheather conditions

     -24-hour operation

 

  The better the reputation of an airport the greater the incentive for companies to settle near the airport.  The reputation effect is linked to the marketing effect.

    Marketing Effect 

      The Marketing effect is the ability of Local Governments to use the airport as a marketing instrument.  Specifically,  the airport can be sued in attracting companies to settle near the airport,  and airlines to use it as a hub or destination/origination point or to concentrate their maintenance facilities.   The more successfully the airport is used as marketing effect, the higher the reputation effect.

    Innovation Effect 

   The innovation effect is defined as the effect of the airport on local companies and businesses which may settle nearby.  Due to the existence and the operation of the airport,  some of these companies receive substantial benefits in research and developent and innovation.

 

      The effect is achieved by:

 

      -Companies that supply goods and services to the airport, airlines and aerospace maintenance centers

     -Companies,  for which the passenger and feight services are essential to their doing business.

     Skill Effect 

      The effect on worker skills can be described as the upgrading of spesific skills and qualification of the working population in the region that the airport serves.  The effect on worker skills is influence by the qualification requirements at the airport, expecially in the field of aerospace technology and maintenance.

     SUMMARY 

v     Meteora Airport role in enabling economic exchange in goods and personnel and in concentrating product and service delivery, can be resulte in a phenomenal local economic boost for the cities and region which will serve.  Its role as economic generator for the local area is matched by the contribution made to a wider role of servicing wealth generation in natinal economy.

v     Hence its role must be reviewed as having much greater significance than of simply providing the aviation industry with the necessary operational infrastructure.  It is a commercial entity in its own right and can create economic synergy which can reinforce region economic vitality.

v     The development of Meteora Airport must be an essential consideration in the planning and execution of government economic development policy at local, regional, national and European level.  The plans and decisions made by the development group for its location are absolutely essential to the realisatrion of the high growth portential of the aviation industry,  but as nodes of growth and vitality they are highly valuable to economic performance of the region generally.

 v     CONCLUDING STATEMENT v     Meteora Airport and airports generally are major economic assets offering major economic returns and benefits.  Decisions made for its fully development and construction, operation are decisions that affect local, regional and national economic performance.  For this reason, legislators and regulators must shape policies at all these levels recognising that:v     METEORA AIRPORT AS AN ACTIVE PARTNER IN DEVELOPING DYNAMIC AND VITAL ECONOMY IN THE REGION OF WEST THESSALY AND CENTRAL GREECE.      Meteora Airport economic impact view is announced and presented for the following purposes: 

   -Public Relations for the proposed new development project

 

    -Inproving the political understanding of the benefits created by the airport in terms of:

 

       -employment

 

      -bringing wealth to the region

 

      -as a prerequisite for the region economic position and further growth

 

   -paving the way for airport construction plans

 

      -as a compromise in enviromental matters

     -Planning or adjustment of business activities 

      -Identification of airport activities which give the greatest economic benefits

 

       -Evaluation of present and futer ground transportation needs

 

      -Asessment of the supporting infrastructure

        Access roads,  parking

 

       -Evaluation of the impacts of new construction projects

 

\        -and as Estimation of future impacts

                THE ECONOMIC IMPACT IS GENERATED BY FOLLOWING GATEGORIES:         On Airport                                                         Off Airport Ancillary services       Airport Service/Airline Service                *Passenger Transportation 

  -Airport operation                                             -Rental Cars

     -Passenger Airlines/Air Taxi                        -Limo service

  -General Aviation                                              -Taxis

      -ATC/YPA service                                                  -Buses

      -Police/Immigration

     -Customs

    -Catering

      -Fuelling

      -Handling

    -Cleaning and other support activities                 *Freight Transportation

     -Shops

    -Bars/Restaurants                                            -Freight Forwarders

      -Hotels                                                   -Trucking firms

    -Conference centre

       *Airport Service/Freight 

      -Freight Airlines

     -Freight Handling

     -Cargo Centers

   -Freight forwarders

    -ATC (Share of)

    -Customs (Share of)

                Off Airport    *Construction & Consulting                    *Impact on  Trade/Industry 

      -Construction firms                                 -Maximise just in time profitability

 -Consulting firms                                 -Minimise stocks

      -Engineering                                           -Access to world-market

     -Architectural                                                -Magnetic effect on new enterprices

      -Data processing                                  -Trade/Conference centers

     -Planning

    *Purchase                                                  *Impact on Local Tourism 

  -Food/Beverage                                             -Off airport hotels

      -Goods for sale or consumption

   -Office equipment

  -Computer equipment

      -Hard ware

      -Soft ware

      -Technical equipment

   -Rolling equipment                                           *Effect on Local Spending 

o       -Impact on public service

o       -Impact on business activities

o       -Impact on value of social life

     *Non quantified quality aspects 

     -Inconveniences

    -Other positive aspects

    -Possible negative aspects to other economic sectors

      -Time shaving for business people

      -Easy access to world wide tourist market and destinations

 PREPARED AND PRESENTED BY:

Vassils Papavasiliou

Accredited Airport ExecutiveInternational Association of Airport Executives & Managing Director of the Meteora Airport Development Group