A new study shows Tucson International Airport (TIA) brings an annual economic impact of more than $3.2 billion to the region.
The study was commissioned by the Tucson Airport Authority (TAA) and conducted by MBA students from the Eller College of Management at the University of Arizona. It has been more than 10 years since TAA conducted such an analysis.
“These updated findings provide an accurate and current picture of the job creation and economic activity brought about by TAA’s ongoing operations, significant infrastructure investments and partnerships with more than 100 tenants. We take great pride in helping to improve the economic vitality and quality of life in southern Arizona,” said TAA President/CEO Bonnie Allin.
The airport’s direct, indirect and induced economic effects are included in the total. Direct impact is generated as a result of employment and operation of the airport and tenant businesses. The Eller MBA consulting team calculated a total annual direct impact of $1.7 billion stemming from payroll, goods and services purchased by the airport and airport businesses, expenditures on capital improvement projects and payment of local taxes from airport activity.
The remainder of the $3.2 billion total is attributed to indirect and induced impact.
Indirect impact includes money spent at the airport and in the community by airport patrons, plus revenue generated by businesses that chose to locate in the region because the airport is integral to their operations.
Induced impact, also known as the multiplier effect, is based on an economic principle that quantifies how revenue generated by airport activities grows as it cycles through the community. For example, when TAA hires a local construction company for a project, the company hires additional employees, who increase demand for goods and services in the region through spending their salaries. The businesses they patronize hire additional workers, and the process repeats.
Similarly, 13,000 workers are directly employed at TIA. Indirect and induced effects of airport employment bring the total to 35,000 local jobs supported as a result of the airport’s presence in the community.
The UA graduate students are part of the Eller MBA’s experiential learning program, which allows the students to participate in a strategic consulting project. TAA is one of the College’s 12 clients this year, including Raytheon, Microsoft and Intuit, said Eller College of Management Director for Experiential Learning Nannon Roosa.
“This program is the cornerstone of our MBA’s first year,” Roosa said. “Projects like these challenge students to apply core business skills to address a real-world business issue.
“Eller’s innovative curriculum, combined with pioneering research, distinguished faculty, excellence in entrepreneurship and social responsibility, has brought international recognition to the program,” she added.
The report helps to demonstrate the importance of TIA to a strong local economy, which is useful in regional business recruitment and retention efforts, as well as air service development initiatives. TAA will share the findings from this study for inclusion in an Arizona Department of Transportation (ADOT) study that will quantify the statewide impact of aviation, as well as other economic development groups such as TREO, the Arizona Commerce Authority, local chambers and the Metropolitan Tucson Convention & Visitors Bureau.