FOUNDATION FOR ECONOMIC & INDUSTRIAL RESEARCH 11 T. Karatassou St, 11742 Athens, Greece, Tel: (+30) 210 9211 200-10, Fax: (+30) 210 9233 977, www.iobe.gr Economic impact of the Athens International Airport Athens, November 2018
From Infrastructure to Business Community Infrastructure Business Entity Airport Business Community Impact on Economy and Society 2 Runways 24hour operation 26 million passenger capacity Aeronautical Business Commercial Business Profitability CSR 24+ million passengers 4.9 million visitors 5,400 Suppliers 2
Study objectives Present and analyse the latest data and developments in the operation of Athens International Airport (AIA) Estimate the contribution of AIA to economic activity and employment Highlight the importance of AIA for the development of the Greek tourism industry 3
1. Athens International Airport: Current state 4
Total passenger traffic increased substantially during the past five years (+73% cumulative growth) million passengers 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Passenger traffic in the Athens International Airport, 2002-2017 25 +73% 20 15 10 5 0 Source: Civil Aviation Authority AIA achieved the strongest increase in passenger traffic among the 30 largest European airports between 2013 and 2017 5
Revenues in the AIA economic system reached 2 billion, higher by 59% compared to 2012 million 2500 Turnover by partner in the AIA economic system, 2017 against 2012 +58.8% 2,071 Outsourcers 37,6 2000 Users 125,3 Retail park 140,9 State authorities 148,1 1500 1,304 Outsourcers 38,8 Concessionaires 331,8 Users 121,9 1000 Retail park 141,7 State authorities 121,9 Concessionaires 219,9 AIA S.A. 454,9 500 AIA S.A. 338,8 Airlines 832,3 Airlines 321,2 0 2012 2017 6
Employment in the AIA economic system grew by 23% cumulatively during the past six years thousand jobs 20 Employment by partner in the AIA economic system, 2017 against 2012 +23.5% 16.3 More than 16 12 8 13.2 AIA S.A. 0.7 Retail park 1.2 Outsourcers 1.7 State authorities 2.1 AIA S.A. 0.7 Retail park 1.2 Outsourcers 2.0 State authorities 2.2 Concessionaires 3.1 4 Concessionaires 2.4 Airlines 2.6 Airlines 3.3 0 Users 2.4 Users 3.8 2012 2017 7
2. Economic impact of the Athens International Airport 8
2.1 Methodological approach 9
The estimation of the overall economic impact of AIA takes into account the sector interactions in the Greek economy Impact Wider of the effects AIA economic of activity system the AIA economic system Direct effect Indirect effect Induced effect Expenditure Operation of the AIA economic system of foreign Transportation Airport company residents Airlines of AIA visitors arriving at Users AIA Outsourcers Concessionaires Retail park State authorities Total impact Consumer spending out of labour income created directly or indirectly by the AIA economic system Products and services along the AIA supply chain (GDP, employment, tax revenues) The indirect and induced effects are estimated with an Input-Output model of the Greek economy 10
2.2 Total impact 11
The total contribution of AIA in terms of GDP is estimated at 4.4% of GDP ( 7.9 billion) in 2017 Economic impact of the Athens International Airport on GDP (million ), 2017 Economic impact of the Athens International Airport on employment (thousand jobs), 2017 Wider effects 4,422 Wider effects 107.9 4.4% of GDP AIA economic system 3,444 4.8% of total domestic employment The impact on employment from the operation of AIA is estimated at almost 181,000 jobs in 2017 (4.8% of total employment in the domestic labor market) AIA economic system 73.2 Source: IOBE analysis 12
2.3 Impact of AIA economic system 13
The contribution of the AIA economic system alone is estimated at 1.9% of GDP ( 3.4 billion) in 2017 Source: IOBE analysis In terms of employment, the total contribution from the AIA economic system is estimated at about 73,200 jobs 14
Substantial multiplier effects in the economy due to the operation of the AIA economic system GDP multipliers from the operation of Athens International Airport economic system Employment multipliers from the operation of Athens International Airport economic system 1 GDP in AIA 1 Job in AIA Partial multiplier Partial multiplier 1.6 indirect effect on GDP 2.1 jobs indirect Total multiplier 3.4 total impact on GDP Total multiplier 4.5 Jobs total Each euro of GDP produced in AIA generates 3.4 euro of GDP in the Greek economy Each job in AIA corresponds to 4.5 full-time equivalent jobs at national level Source: ΙΟΒΕ analysis Partial multiplier: The multiplier effect on GDP, employment, etc. due to indirect effects Total multiplier: The multiplier effect by combining indirect and induced effects 15
The largest total contribution to GDP from the AIA economic system comes from the operation of airlines million thousand jobs 1600 Economic impact on GDP by partner of the AIA economic system, 2017 35 Economic impact on employment by partner of the AIA economic system, 2017 1400 30 1200 25 1000 20 800 15 600 10 400 200 5 0 Users State autorities Retail park Outsourcers 0 Airlines Airlines AIA S.A. Concessionaires Concessionaires Users State autorities AIA S.A. Outsourcers Retail park Direct Indirect Induced Direct Indirect Induced Source: ΙΟΒΕ analysis Users and airlines have the largest direct impact on employment 16
2.3 Broader effects 17
One out of six foreign residents arrived to Greece via Athens International Airport in 2017 million passengers International travelers arriving at Athens International Airport, 2007-2017 5,0 +87% 4,5 4,0 Incoming foreign travelers in the country from Athens International Airport doubled in the past five years 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Civil Aviation Authority 18
The contribution of inbound foreign travelers through AIA, in terms of travel receipts, is estimated at 2.9 billion in 2017 million 3500 Travel expenditure by incoming international travelers to Greece via AIA, 2007-2017 3000 +48% 2500 2000 1500 1000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EU countries Non-EU countries Total Source: Bank of Greece Data processing: ΙΟΒΕ This figure corresponds to 20% of total travel expenditure made by inbound foreign travelers to Greece in 2017 19
The spending of international travelers through AIA generated 1.6 billion GDP (direct impact) in 2017 Flow of travel expenditure in the economy Spending of international foreign travelers arriving at AIA: 2.9 billion Accommodation Food & Beverage Domestic production: 2.3 billion Imports: 0.6 billion Value Added: 1.1 billion Taxes on products: 0.5 billion Intermediate Consumption: 0.7 billion Direct impact on GDP: 1.6 billion Retail Transportation Recreation/Entertainment 20
The total contribution to GDP of spending by incoming travelers through AIA is estimated at 2.3% of GDP ( 4.1 billion) in 2017 Source: ΙΟΒΕ analysis Inbound travel expenditures by international travelers arriving at AIA support about 102,000 jobs at national level (2.7% of the total domestic employment) 21
The contribution to GDP from transportation services is estimated at 290 million - 3/5 of it come from public transport operators & taxi Share of total contribution on GDP by mode of transportation Suburban railway 12 Mini-buses 10 Airport bus line 30 Taxi 102 Metro 40 Attiki Odos motorway 44 Car rentals 52 Source: ΙΟΒΕ analysis Τhe contribution to employment from transportation services to AIA visitors is estimated at about 5,200 jobs 22
2.4 Contribution of the AIA economic system at regional level 23
The impact on GDP of Attiki region from the AIA economic system is estimated at 2.9 billion (3.5% of the region s GDP) million thousand jobs 3500 Economic impact on GDP from the operation of AIA economic system at regional level, 2017 70 Economic impact on employment from the operation of AIA economic system at regional level, 2017 3000 60 2500 50 1337 23,8 2000 40 1500 568 2923 30 15,9 56,1 1000 20 500 1019 10 16,3 0 Source: ΙΟΒΕ analysis Direct in Attiki Indirect in Attiki Induced in Attiki Total in Attiki 0 Direct in Attiki Indirect in Attiki Induced in Attiki Total in Attiki The contribution to employment from the AIA economic system in Attiki region is estimated at about 56,100 jobs or 4.1% of the region s employment 24
The number of employed people in AIA residing in the area of Mesogeia stood at about 3,700 in 2017 Employment (direct) in the AIA economic system based on the place of residence (in thousands), 2017 Employed people in AIA economic system residing in the area of Mesogeia 3,7 Employed people in AIA economic system residing elsewhere in Attiki region 12,6 Source: AIA, ΙΟΒΕ analysis Considering the indirect and induced effects, the economic impact on employment in the Mesogeia area is estimated at about 11,600 jobs 25
2.5 Comparison with previous estimates 26
The contribution of AIA to the Greek economy has strengthened compared to previous years Additional contribution to GDP in 2017 Source: IOBE analysis The economic contribution from AIA increased by 2.8 billion or 1.8 percentage points of GDP compared with 2012 (from 2,6% to 4.4% of GDP in 2017) 27
The total contribution to employment increased by about 81,000 jobs (from 2.5% to 4.8% of total employment) Additional contribution to employment in 2017 Source: IOBE analysis 28
The higher contribution is attributed to the strong growth of passenger traffic at a period of GDP stagnation billion million foreign arrivals GDP of the Greek economy and international arrivals at AIA, 2008-2017 260 5,0 240 220 200 4,5 4,0 3,5 3,0 180 2,5 160 2,0 140 1,5 1,0 120 0,5 100 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0,0 International arrivals at AIA (right axis) GDP (left axis) (*) GDP at constant prices Source: Civil Aviation Authority, Hellenic Statistical Authority 29
The contribution of AIA in terms of employment (without wider effects) is similar to that of the airports of Dublin and Amsterdam Contribution of airport economic systems, share of national GDP Contribution of airport economic systems, share of total domestic employment 3,0% 3,0% 2,5% 2,5% 2,0% 2,0% 1,5% 1,5% 1,0% 1,0% 0,5% 0,5% 0,0% AMS (2012) CDG (2012) ARN (2012) ATH (2017) DUB (2016) BRU (2015) ZRH (2016) LGW (2016) 0,0% ARN (2012) AMS (2012) ATH (2017) DUB (2016) BRU (2015) CDG (2012) ZRH (2016) LGW (2016) (*) The economic impact stems from the operation of the airports without considering broader effects such as tourism (**) The figures in the brackets show the year for which the impact is estimated (***) AMS - Amsterdam Airport Schiphol, CDG - Charles de Gaulle Airport, ARN - Stockholm Arlanda Airport, ATH - Athens International Airport, DUB - Dublin Airport, ZRH - Zurich Airport, LGW London Gatwick Airport, BRU - Brussels Airport Source: PWC, Oxford economics, National Bank of Belgium, Infras/BAK Basel, Intervistas, IOBE 30
3. Conclusions 31
Conclusions AIA is a significant driver of economic development at regional and national level More than 16,000 people are employed in the businesses operating at the airport The spending of foreign travelers at AIA has multiplier effects on the economy Its contribution to GDP is estimated at 7.9 billion (4.4% of GDP) in 2017 The impact on employment from the operation of AIA is estimated at 181,000 jobs in 2017 (4.8% of total domestic employment) In terms of GDP, the contribution of the AIA economic system is estimated at 3.4 billion in 2017 (or 1.9% of Greek GDP) In terms of employment, the impact of the AIA economic system is estimated at about 73,000 jobs in 2017 Travel expenditure by foreign travelers arriving at AIA is estimated at 2.9 billion in 2017 Their contribution to GDP is estimated at 4.1 billion (or 2.3% of GDP) in 2017 In terms of employment, more than 102,000 jobs at national level are supported by the arrivals of foreign travelers through AIA 32