Nanaimo Airport YCD Economic Impact Study Final Report June 2007 Prepared by: Jocelyn Purcell, Executive Director Inside Canadian Airports 1070 Aubeneau Crescent West Vancouver, B.C. V7T 1T5 Phone: (604) 916-8170 Fax: (604) 922-9166 jocelyn@insidecanadianairports.com
Table of Contents Methodology......................... 1 Overview of the Nanaimo Area................... Location.......................... Population.......................... Industry and Labour Force................... An Overview of Nanaimo Airport................. Location.......................... Airport Infrastructure..................... Aircraft Movements...................... Passengers.......................... Tenant Operations...................... Economic Impact of Nanaimo Airport............... Employment........................ Gross Revenues....................... 2 2 3 4 5 5 6 8 9 10 11 11 11
Page 1 The Economic Impact of Nanaimo Airport Methodology Airports are strong economic drivers for the communities they serve, creating employment and generating revenues that ripple throughout the local economy. To calculate the total impact of an airport, economists measure three types of impacts: direct, indirect, and induced. The sum of the three measurements equals the total economic impact of the airport. Direct economic impact refers to the employment and revenues attributable to the commercial activities which physically take place at the airport. Indirect economic impact measures the value of goods and services purchased by airport businesses from other firms, in terms of the employment and revenues resulting from their operations in support of airport operations. Induced economic impact is the increase in employment and revenues resulting from direct and indirect airport activities. The jobs sustained by the direct and indirect airport activity generate an increase in household income. This drives the induced economic impact that results from an increase in purchases at local businesses. The traditional approach to estimating the economic impact of an airport involves in-depth interviews and detailed review and financial analysis of the operations of the businesses which operate at the airport. An alternative method, which has been used here, is the statistical approach. For this analysis, the economic impact of Nanaimo Airport has been estimated using a model originally formulated by the Transport Institute of the University of Manitoba. The model consists of two econometric formulas which were developed by applying regression analysis to the results of more than forty detailed economic impact studies performed at Canadian airports. It has been used extensively to calculate the economic impact of airports across Canada, and when compared to the results obtained using a survey methodology, the model was found to produce fair and reasonable estimates of an airport s impact on the provincial economy. The outputs of the model are estimates of the total revenues, or economic output, and employment generated throughout the province by the commercial activity conducted by the airport operator, its tenants and others at the airport.
Page 2 An Overview of the Nanaimo Area Location: The waterfront City of Nanaimo is located on the east side of Vancouver Island, 113 kilometres north of Victoria and 23 kilometres west of Vancouver. The second largest municipality on Vancouver Island, Nanaimo is a hub for other communities in Central and Northern Vancouver Island, and its central location provides convenient access between the island and the British Columbia s lower mainland. www.city.nanaimo.bc.ca
Page 3 Population: Over the past three decades the population of the City of Nanaimo has experienced very strong growth, almost doubling to its current size of approximately 78,692 (Statistics Canada Census, 2006). The greatest growth occurred during the period from 1986 to 1996, and although the rate of growth has slowed somewhat in recent years, the population of the City is expected to continue to grow at a rate of 2.1%. Over the next 30 years the city s population is forecast to increase by a further 60% (BC Statistics). The trade area for the City includes the Nanaimo Regional District (RDN) and the Town of Ladysmith, serving an estimated population of over 145,000. When the secondary and tertiary trade areas are included (extending to the neighbouring Regional Districts of Mount Waddington, Cowichan, Comox Strathcona and Alberni Clayquot) Nanaimo businesses reach a total market of 365,000. Of that total, approximately 230,000 people live in closer proximity to Nanaimo Airport than other Vancouver Island airports. (Statistics Canada 2006 Census, Jacobs Consultancy 2007) City of Nanaimo - Population 100,000 80,000 60,000 40,000 20,000 0 1976 1981 1986 1991 1996 2001 2006 Period Average Growth Rate Growth Rate Population 1976 40,640 1981 47,069 15.82% 3.16% 1986 49,029 4.16% 0.83% 1991 60,130 22.64% 4.53% 1996 70,130 16.63% 3.33% 2001 72,890 3.94% 0.79% 2006 78,692 7.96% 1.59% Cummulative Growth 93.63% Average Annual Growth 3.34%
Page 4 Industry and Labour Force: The Labour Force by Industry Sector for Nanaimo illustrates the city s continuing role as a centre for health services, retail trade, manufacturing, government and transportation for the region. The area s diverse economy is also largely driven by small business, as 4,370 of the 5,705 businesses registered in Nanaimo in 2005 had 20 employees or less. Nanaimo is working towards even greater diversification, actively pursuing knowledge-based businesses, film and video production, tourism, arts and culture, and manufacturing. Labor Force by Sector Services 17,385 45.4% Retail Trade 6,180 16.1% Manufacturing 3,010 7.9% Government 2,770 7.2% Transp/Warehousing/Utilities 2,525 6.6% Finance/Insurance/Real Estate 2,100 5.5% Construction 1,845 4.8% Wholesale Trade 1,340 3.5% Forestry & Logging 560 1.5% Mining and Oil & Gas 80 0.2% Total 38,320 Leading Employers by Sector Health Care Nanaimo Regional General Hospital 1,648 Education Malaspina University College 1,400 Education School District #68 2,100 Bus/Prof Services RMH Teleservices 1,200 Transportation BC Ferry Corporation 697 Manufacturing Harmac Pacific Pulp Mill 579 Government City of Nanaimo 490 Accomodation/Food McDonalds 325 Financial Coastal Community Credit Union 270 Retail The Real Canadian Superstore 245 Invest BC (www.investbc.gov.bc.ca) City of Nanaimo Community Profile July 2006
Page 5 An Overview of Nanaimo Airport Location: Owned and operated by the Nanaimo Airport Commission, Nanaimo Airport is located approximately 18 kilometres south of the downtown core in the community of Cassidy, B.C. The airport covers a total area of 224 hectares adjacent to Highway 1. The central location of the airport provides easy access to and from Vancouver Island, and Nanaimo is closer to Vancouver International Airport than any other Vancouver Island airport. The airport s flat topography is ideal for construction and is not restricted by neighbouring developments. msn mappoint
Page 6 Airport Infrastructure: The following facilities and services are currently provided at Nanaimo Airport: AIRSIDE: 5000 x 200 runway, asphalt Parallel taxiway system Stand-Alone Global Positioning System (GPS), Distance Measuring Equipment (DME) Non-Directional Beacon (NDB), Omni Directional Approach Lighting (ODAL) system Nav Canada Air traffic advisory and weather services (FSS) Canada Customs services are available (24 hour on-call basis) continued... Nav Canada Canadian Airport Charts
Page 7 AIR TERMINAL OPERATIONS: 923 m 2 Air Terminal Building Cafe Car and truck rentals ATM Taxi and shuttle bus transportation Vehicle parking. COMMERCIAL OPERATIONS: Scheduled flights Air cargo Charter flights Freight-courier services Aircraft refuelling Aircraft maintenance Flight training and instruction Aircraft parking and hangarage On-airport golf course and clubhouse with taxiway access.
Page 8 Aircraft Movements: Itinerant activity at Nanaimo Airport has been on a declining trend since the 1990 s, experiencing an average annual drop of 4% over the past decade. Fluctuations in local aircraft movements over the same period has helped to offset the negative trend in itinerant movements, resulting in an average annual decrease of 3% in total movements for the period. Aircraft Movements Year Itinerant Local Total % Change % Change % Change 1997 36,548 8,730 45,278 1998 36,972 1.2% 7,682-12.0% 44,654-1.4% 1999 34,340-7.1% 9,785 27.4% 44,125-1.2% 2000 33,477-2.5% 16,367 67.3% 49,844 13.0% 2001 29,970-10.5% 14,411-12.0% 44,381-11.0% 2002 28,743-4.1% 11,544-19.9% 40,287-9.2% 2003 27,133-5.6% 14,606 26.5% 41,739 3.6% 2004 25,423-6.3% 15,043 3.0% 40,466-3.0% 2005 25,474 0.2% 11,480-23.7% 36,954-8.7% 2006 23,544-7.6% 9,615-16.2% 33,159-10.3% Total Change -35.6% 10.1% -26.8% Average Change -4.0% 1.1% -3.0% 60,000 50,000 Local Itinerant 40,000 30,000 20,000 10,000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Transport Canada TP 577
Page 9 Passengers: Total enplaning and deplaning passengers at Nanaimo Airport increased by 11% in 2006, gaining back a significant portion of the Vancouver Island air passenger market and resulting in a total increase of 33.6% since 2002. Scheduled air service is provided by Air Canada Jazz, which currently offers six flights daily to Vancouver. Passengers Year % Change 1997 123,361 1998 138,536 12.3% 1999 135,850-1.9% 2000 138,120 1.7% 2001 115,609-16.3% 2002 103,036-10.9% 2003 122,502 18.9% 2004 121,393-0.9% 2005 123,863 2.0% 2006 137,700 11.2% Total Change 11.6% Average Change 1.3% 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Page 10 Tenant Operations: The following businesses and organizations are located at Nanaimo Airport: Commercial Carriers Air Canada Jazz Air Canada Cargo Aviation Support NAV Canada Flight Centre Environment/Canada weather Columbia Fuels Aircraft Sales & Leasing Venture Aviation Aircraft Maintenance Taylor Aircraft Maintenance Restaurant/Recreational Connections Cafe Cottonwood Golf Course Arbutus RV Car Rentals Hertz Car Rental Budget Car/Truck Rental National Car Rental Ground Transportation AC Taxi Nanaimo Airport Shuttle Service Swiftsure Taxi Parking Robbins Parking Learn to Fly Vital Aviation Hangar Facilities Aquasan Investments Buffalo Hangars Island structures Kanaka Management Mustang Hangars Nanaimo Flying Club NFC Hangars Nigro Associates Spitfire Hangars Wildcat Hangars
Page 11 The Economic Impact of Nanaimo Airport Economic Impact of Nanaimo Airport - 2006 Employment: 584 Gross Revenues: $41 million Employment: During 2006, Nanaimo Airport supported an estimated 584 person years of employment. Through regression analysis, the Transport Institute s comparison of economic impact studies found that a strong correlation exists between the total number of jobs sustained by airport activities, the number of passengers handled throughout the year, and the relative wealth of the community served by the airport (using average housing prices as the benchmark). A total of 137,700 passengers are estimated to have used Nanaimo Airport during 2006 and the average price of housing for the area rose by 14% to $288,880. According to the model, these factors indicate that a total of 584 full-time jobs were generated by the activities of the airport and its tenants during the year. This figure represents the sum of direct, indirect and induced employment. Gross Revenues: Total gross revenues generated by activities at Nanaimo Airport during 2006 are estimated to be $41 million. The gross revenues generated by activities at Nanaimo Airport were also calculated by applying the relative wealth of the community and passenger volumes to the Transport Institute model. In addition, the revenue formula also incorporates large aircraft movements handled by the airport (for aircraft exceeding 35,000 kg). In 2006, the airport handled four aircraft in this weight category. According to the economic impact model, Nanaimo Airport generated approximately $41 million for the provincial economy during 2006. This figure represents the sum of direct, indirect and induced gross revenues.