ECONOMIC MASTER PLAN Florida s airport industry indicates the following programs are needed to maximize its impact on the State s economy: AIRPORT SECURITY Develop Model Security Plan for General Aviation Airports Develop Security Systems Funding Plan for All Airports ECONOMIC DEVELOPMENT INCENTIVES AND PROGRAMS Develop a Statewide Air Service Marketing Program Develop a Model Program for General Aviation Airport Development Expand Funding Eligibility for Economic Development Projects Expand Foreign Trade Zone Assistance Provide Incentives for Low-Fare Carriers in Smaller Communities Provide Incentives for Increased Air Cargo Service Provide Incentives to Develop Airport Industrial/Business Parks EDUCATION/TRAINING Educate Leaders on the Importance of Airports to the State s Economy ENVIRONMENTAL PROGRAMS Streamline Permitting & Environmental Programs ZONING IMPROVEMENTS Provide Airport Encroachment Protection TAX REFORM Standardize Ad Valorem Tax Exemptions FUNDING ENHANCEMENTS Develop Strategic Plan for Use of Federal and State Grants Authorize Issuance of Revenue Bonds for Airport Security, Capacity, and Economic Development Revise State Grant Programs for Greater Flexibility Revise Federal Funding Program to Include Revenue-Generating Projects Increase Financial Assistance Programs for General Aviation Airports AIR-SERVICE IMPROVEMENTS Examine Feasibility of Intrastate Air Service Program FEDERAL/STATE ASSISTANCE PROGRAMS Protect Florida s Flight Training Industry Increase Intermodal Project Funding 1
The explosive growth of Florida over the last 30 years is in a large part the result of the expansion of a sophisticated network of commercial and general aviation airports serving as a cost-effective transportation infrastructure for both business and vacation travelers. Florida s major economic engine, tourism, depends on the vitality of its airports and their ability to meet the local and regional needs of businesses and communities. With 19 scheduled commercial service airports and 111 general aviation airports, along with a significant military air base presence, Florida s airports represent a major component of the State s economic development strategy. AIRPORTS ARE THE CORNERSTONE OF FLORIDA S ECONOMY With nonstop scheduled service to more than 160 domestic and international destinations, Florida s airports serve over 110 million passengers annually. Commercial service activity at all of Florida s airports showed strong growth over the 1988-1999 timeframe, but decreased in 2001. During this period most of the large and medium size airports in the state grew at or above the national average. The growth of Florida s aviation system has been nothing short of phenomenal. However, today there are serious challenges facing these airports that may undermine their efficiency, cost-effectiveness, competitiveness and viability. This executive summary provides a detailed look into Florida s airports, how important they are to Florida, as well as what the airports need in the future to serve the billions of people who will depend on them. 60,000,000 TOTAL ENPLANEMENTS AT ALL FLORIDA AIRPORTS FROM 1988-2002 50,000,000 40,000,000 30,000,000 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2
FLIGHT IN FLORIDA COST-EFFECTIVE INFRASTRUCTURE Airports are good investments. In 2002, the State of Florida provided $88 million in grants to Florida s airports for capital construction. The airport system in Florida provides $89.7 billion in economic activity more than a $1,000 return on every dollar expended by the State! AIRPORTS KEEP TOURISM & BUSINESS FLYING HIGH Airports are among the most successful of the State s economic engines. Annual economic activity at Florida s airports is responsible for more than 8.5 percent of Florida s $380 billion Gross State Product. Air cargo shipments account for more than one-third of Florida s international trade dollars, and over one-half of Florida s visitors arrive each year by air. Airports support more than one million jobs; provide more than $26.3 billion in annual payroll; support the world s largest flight training program; and support airline passenger growth that is double the national average. Although Florida is the fourth largest state in the nation, the State s airport system is ranked second and third in many categories. Florida s airports are among the fastest recovering from the setbacks of September 11, 2001. According to the Florida Department of Transportation (FDOT), Florida s future economic health will depend on a transportation system that can successfully move growing numbers of residents, tourists and goods. Florida s airports, intrastate highway system, rail network and seaports are the backbone of this interregional transportation system. Annual economic activity at Florida s airports is responsible for more than 8.5 percent of Florida s $380 billion Gross State Product. Recent trends show that economic activity and the demand for transportation will grow even faster than Florida s population over the next 20 years. By 2020, the transportation system will need to serve 21 million residents with a substantial increase in freight movement and tourism. Meeting the needs generated by such dynamic growth will require investments of statewide funds in a well-planned transportation system that efficiently connects the various forms of travel. Limited federal and state resources must be 3
focused on statewide and regional priorities that are essential to Florida s economy and quality of life. The updated 2020 Florida Transportation Plan called for the development of a Strategic Intermodal System composed of corridors, facilities and services of statewide and regional significance. According to the FDOT, a Strategic Intermodal System is important because: Intermodal transportation is critical to Florida s 21st Century economic competitiveness as an international tourist destination and trade gateway. International trade doubled during the 1990 s to $73 billion and is expected to double again by 2015. Over the next 20 years, Florida will add five million residents and host more than one billion visitors. FLORIDA S ECONOMIC HEALTH DEPENDS ON AIRPORTS With 19 commercial service and 111 general aviation airports available for public use, Florida s aviation system is among the largest in the nation. The Florida Aviation System Plan states that Florida simply does not work without airports. Funding for Airports According to the Federal Aviation Administration (FAA), Florida ranks among the top states in federal funding. In 2001, Florida led the ten Southern Region states in funding, with approximately 30 percent of the entire region s federal funding allocated to Florida. The FAA reported that 10 of the top 20 airports receiving Discretionary Funds in the FAA s Southern Region were in Florida. TRENDS & ISSUES AFFECTING FLORIDA S AIRPORTS Flight Training Florida boasts the largest flight training industry in the nation. In fact, Florida leads the world in flight training. According to the Florida flight training industry, flight training is one of Florida s most rapidly expanding industries providing tomorrow s pilots, generating thousands of jobs and contributing hundreds of With 19 commercial service and 111 general aviation airports available for public use, Florida s aviation system is among the largest in the nation. 4
millions of dollars to Florida s economic growth. Industry sources estimate this figure to significantly increase in five to eight years, with pilot hiring projected to exceed 18,000. Florida flight training is a major source of foreign commerce, with economic impacts amounting to nearly $1 billion per year. The state must work to maintain the viability of flight training in the post 9-11 world. 21ST CENTURY BRINGS GROWTH Following that successful flight in Kitty Hawk in 1903, airports have become essential elements of a community s success strategies in both economic development and tourism. Nowhere is this more obvious than in Florida where half the visitors that come to our state come by air! In fact, in 2002, Florida s airports served 110 million passengers. ECONOMIC RECOVERY Airports are key to the goal of making Florida a priority location for national and international business, trade, and entrepreneurship. In the Statewide Strategic Plan for Economic Development, Enterprise Florida states its goal is to, Make Florida a priority location for national and international business, trade, and entrepreneurship. Airports are key to making that goal reality. Domestic Business Aviation and aerospace industries are targeted business sectors because of the significant concentration of existing firms in Florida and for their potential for rapid expansion and growth. The report states that, as a crossroad economy, Florida can benefit tremendously from economic globalization. International Trade Florida is a major trade gateway and global transshipment hub between countries in the Americas and those in other parts of the world. Florida ranks seventh in the nation for state origin exports with 4 percent of the market share. 5
Foreign Direct Investment (FDI) Florida ranks seventh nationally as a recipient of Foreign Direct Investment and fourth in terms of employment by foreign-affiliated firms. In recent years, the average annual growth in Florida s FDI has outpaced that of the nation. Given its unique position in the Americas, Florida s economy can capitalize on Latin America s increased interaction with other parts of the world. Airports As Business Incubators Florida s airports own and control thousands of acres of land throughout the State, much of which is not needed for aviation. The federal government will allow lease, and limited sale of land not needed for aviation purposes, to provide revenue for airport operations. With this excess of public land, Florida s airports can entertain development opportunities, with potential for state and federal financial assistance, to benefit the state s economy. These untapped resources are ideally situated to lead Florida s economic recovery in 2003 and beyond. CAPACITY In 1992, when FDOT published its Aviation System Plan, Florida s airports ability to handle additional traffic was considered the greatest impediment to growth. Ten years later, even after the terrorist attacks, capacity is still an issue. Other concerns for Florida s airports are airspace congestion, state and federal funding shortfalls and competition from other southeastern states. The Statewide System Plan in 1992 called for additional runway and taxiway capacity, additional passenger terminal capacity, improved airport access, additional land, airport preservation and new facilities that included security fencing, firefighting facilities, fuel storage and interior airport roads. Following the terrorist attacks, security has become the highest national funding priority. This could significantly impact the ability for Florida s airports to expand and grow to meet the needs of residents and visitors. Many airports are expanding airfield facilities and terminals to accommodate additional and larger aircraft. Financing these projects has now become an issue of FACTORS IMPACTING THE FUTURE OF AIRPORTS Florida ranks seventh nationally as a recipient of Foreign Direct Investment, and fourth in terms of employment by foreignaffiliated firms. 6
considerable concern, especially with the federal government s focus on increasing airport security and thereby directing a much larger share of federal funds to safety and security projects. Florida s airport officials are concerned this will negatively impact growth of the State s airport system and they will not have the adequate infrastructure in place to meet the demands of the flying public. ENVIRONMENT As the State of Florida grows, especially in the densely-populated urban areas, the competition between residential development and airport development will continue to breed controversy. Many airport expansion projects throughout Florida which are needed to meet the demands of the flying public, are under fire from local and adjacent communities due to their impact on the environment. As large public works projects, airports impact the environment in several areas including air pollution, water pollution and noise. The airports in Florida have been very sensitive to their impact on the environment and annually hold an Environmental Symposium to explore new methods and programs to reduce the impact of airports on the State s sensitive eco-system. COMPETITION Following the terrorist attacks of September 11, 2001, passenger convenience has become an important issue for Florida s airports. Passenger air travel is dependent on many variables. The entry of low-fare carriers into Florida has impacted Florida s aviation system and has divided it into two categories haves and have-nots. Airports with low-fare carriers have experienced above-average growth over the last few years and airports that have not been able to attract low-fare carriers have seen similar losses in traffic. The impact of this has been most dramatic in Florida s smaller communities. PASSENGER CONVENIENCE Following the terrorist attacks of September 11, 2001, passenger convenience has become an important issue for Florida s airports. The Transportation Security Administration (TSA) was formed to prevent the possibility of additional terrorist attacks and, as can be expected, passenger convenience became secondary. This lack of focus on customer service is a concern to the airport community in that each 7
passenger must weigh the cost/benefits of using air transportation over other modes of transportation. Passenger convenience could impact the number of visitors to Florida. FUNDING Airport funding is the single most important factor for continued success of the airport system in Florida. Federal Funds An Aviation Trust Fund was created by Congress to provide a stable source of funding to finance investments in the airport and airway system and, to the extent that funds were available, to cover the operating costs of the airway system. Airport Improvement Program (AIP) grants comprise approximately 25 percent of the FAA s budget and are the source of federal funds for commercial and general aviation airport capital improvements. Over the last five years, Florida s airports have received over $613 million in AIP grants, but with new legislation being written in 2003, Florida s leaders must ensure the State s airports receive their fair share. State Funds The State of Florida levies a tax of 6.9 cents per gallon on aviation fuel to fund airport improvements. Of total tax proceeds, 92.7 percent are deposited into the State Transportation Trust Fund (STTF) and are used to meet aviation needs. The remaining 7.3 percent is deposited into the State s General Revenue Fund. In FY 2002, the total amount of revenue from the aviation fuel tax deposited into the STTF was $50.3 million. Over the last five years, Florida s airports have received more than $458 million in state funding. With continuing belt tightening, Florida must continue to support the needs of its airports. Local Funds The largest single source of local funding for airports is general airport revenue bonds, secured by an airport s future revenue stream. These revenues are derived from multiple sources of airport-generated revenue, including Passenger Facility Charges (PFC), landing fees paid by the airlines, terminal fees (such as parking fees and terminal concessions) and other airport income such as adver- The largest single source of local funding for airports is general airport revenue bonds, secured by an airport s future revenue stream. 8
Funding for airport projects in Florida has never been adequate to meet the demands of a fast-growing state. tising and fuel sales. Over the last five years, Florida s airports have committed more than $500 million to match federal and state funds. The total amount of future funds anticipated for Florida s airports aggregates future federal, state and local funds. Total anticipated future funds for airports in Florida for the five-year period totals $1.375 billion. Primarily due to the loss of air service caused by the terrorist attacks in 2001, airport funding is expected to fall far short of its needs. In fact, Florida s airports will require in excess of $6.9 billion over the next five years. Funding Priorities Florida s airports must have adequate funding to continue the growth and expansion of the State s aviation system beyond the existing focus on airport security. New revenue sources are needed to enhance airport development. Funding for airport projects in Florida has never been adequate to meet the demands of a fast-growing state. The gap between needs and available funds continues to increase due to the national recession and the lower number of tourists and business travelers flying in Florida since September 11. This has resulted in the loss of airline traffic throughout the State. Total unfunded needs during the period from 2003 to 2007 exceed $5.5 billion. With more projects and less funds, Florida must have a well conceived plan to fund its highest priority projects. SUCCESSFULLY GROWING TOGETHER SECURITY CONCERNS MUST BE MET Additional funding is needed to meet the requirements of airport security at commercial service airports and general aviation airports alike. Innovative funding programs must be developed to meet these needs. A model security plan for Florida s 111 general aviation airports is needed in advance of mandates from the federal government. After the State s airport security needs are met, much of the remaining limited funding from the federal, state and local governments should be targeted to high priority economic development projects. Increased competition for these funds requires an aggressive approach to airport development in the future. 9
PARTNERS Success in the future depends on establishing a close working relationship among the airports, economic development and tourism organizations throughout the State. Florida s airports offer excellent opportunities for industrial and business development on local government-owned and supported property. BEST PRACTICES TRAINING Effective management of Florida s airport resources requires focusing on best practices with an emphasis on assisting small, rural airports that do not have fulltime, professional management. MARKETING With limited funds and increased needs for these funds, airport marketing for air service and economic development projects has been limited. Additional investment in airport marketing is needed to stimulate the development and use of Florida s airports. Additional investment in airport marketing is needed to stimulate the development and use of Florida s airports. STATEWIDE STRATEGY To effectively manage its airport assets, the State of Florida must continue to refine a long-term strategic plan to increase enplanements, air cargo and freight, and maximize use of aviation and non-aviation land holdings. A recent survey of airport, economic development, and tourism professionals made recommendations that would help maximize the potential of the State s airport system in the areas of airport security, economic development, and capacity. These critical recommendations are outlined in the Economic Master Plan on page one and will move our airports into the future by addressing areas such as security, environmental impact, and funding. Florida s airports deserve no less. Only by a collaborative and focused effort can Florida s airports grow to meet the demands of the State s tourist and business industries and continue to fuel the engines of Florida s economy. 10