2013 Economic Impact Study San Francisco International Airport SFO Connects the Bay Area to the World May, 2013 In Association with: ICF SH&E, Inc. and.

2013 Economic Impact Study2013 Economic Impact StudySan Francisco International San Francisco International AirportAirportSFO Connects the Bay Area to the WorldMay, 2013

In Association with:

ICF SH&E, Inc. and Polaris Research and Development, Inc.

Prepared by:

Economic Development Research Group, Inc.155 Federal Street, Suite 600, Boston, MA 02110

Executive Executive Summary Summary

II

Findings

3

Direct Impacts– On Airport – 33,600 jobs, $5.5 billion in business activity– Off Airport – 82,800 jobs from $9.1 billion in visitor

spending – Off Airport – 36,400 jobs from cargo valued at $17

billion, originating in the Bay Area and shipped from SFO

Spin-off “ripple” effects of 135,500 jobs and $24.6 billion in business revenues

$2.5 billion in state and local tax revenues

Total Economic Impact

4

How We Got There

5

Verified on-airport direct employment

Conducted a 1,500 person visitor intercept survey in 4 languages

Collected and analyzed freight data

Applied the IMPLAN Modeling Package

Identified aviation and major state and local tax impacts

OverviewOverview

IIII

SFO Plays an Important Role in the Bay SFO Plays an Important Role in the Bay AreaArea

7

A jobs center and economic engine

An enabler of business and travel tourism– Enhancing the regional economy and hospitality

industries

A freight gateway– Supporting goods producing industries throughout the

Bay Area

A generator of tax revenues for California and the Bay Area

What are the impacts?

8

Jobs– Direct Jobs – generated by SFO and would not exist without SFO. – Indirect Jobs – generated when SFO or SFO-dependent firms buy

goods and services from businesses located in the area. – Induced Jobs – generated by spending of wages that are earned

by workers of SFO or SFO - dependent firms, and by employees of suppliers, for items such as food, clothing and housing.

Business Revenue– Sales to airlines and service companies directly dependent on

SFO.– Reported in terms of direct, indirect (local purchases) and

induced (labor re-spending) categories.

Personal Income– Wages and salaries received by individuals employed due to SFO

activity. – Reported in terms of direct, indirect (local purchases) and

induced (labor re-spending) categories.

Categories and Measures of Impacts

Jobs, business revenues, personal income and taxes are shown by airport-generated, visitor industry, and air cargo related categories

9

Contribution to the Bay Area Economy

10

Jobs Center and Jobs Center and Economic EngineEconomic Engine

IIIIII

Jobs at SFO include: Airlines – passenger and cargo

activities

Aviation Support Services – catering, in-flight entertainment, aircraft handling,

fueling and maintenance

Freight Transport – courier, delivery, customs broker and trucking

Concessions – restaurants, retail stores and passenger services

Ground Transportation Services – rental car, taxi, limousine service, and bus companies

Air Terminal Operations Staff – security, building maintenance and facility management

Public Agencies – FAA, other Federal Agencies and Airport Administration (including Police and Fire Departments)

33,580 People Work at SFO

12

Distribution of On-Airport Jobs

Concessions15%

Construction

3%

Passenger Airlines

47%Freight

Transport2%

Aviation Support Services

7%

Passenger Ground Trans.

17%

Admin., Gov’t

& Security9%

Jobs and Business Revenues by County

13

Jobs Across the Bay Area

(1) By place of residence(2) By location of job(3) Includes direct, indirect, and induced impacts

Note: Jobs rounded to the nearest 100.

$675

$394

$103

$35

$804

$6,663

$932

$90

$162

Airport Generated Business Impacts

(3)

($ millions)

Airport Generated Business Impacts

(3)

($ millions)

Subtotal Direct:33,600

Subtotal Indirect & Induced: 26,400

Total: 60,000

Subtotal Direct:33,600

Subtotal Indirect & Induced: 26,400

Total: 60,000

Visitor Industry Visitor Industry ImpactsImpacts

IVIV

The Airport Supports Tourism

15

Sources: SFO Traffic Statistics; U.S. DOT O&D Survey, YE 2Q 2012; U.S. DOT, T-100 Database; IATA, PaxIS Database; U.S. DOC, International Air Travel Statistics, 2011.

51.6% 55.4%

Note: Totals may not add due to rounding.

SFO Binds the Bay Area to the Nation

16

Source: OAG, July 2013.

525 Daily Departures to 72 Domestic Markets (non-stop)

SFO is the Bay Area’s International Gateway

17

Source: OAG, July 2013.

546 Weekly Departures to 33 International Markets (non-stop)

Visitors spend on hotels, restaurants, retail purchases, recreation, and local travel (taxis, car rental, and public transportation)

International business travelers on average spend close to $2,000 per trip while domestic leisure travelers spend more than $800 per trip

The Airport Supports Tourism

18* direct, indirect and induced

Individual Spending per Trip

Total Impacts of Visitor Spending By County*

19*direct, indirect and induced

Jobs in CountyBusiness Sales($Millions)

Solano $93

San Mateo$1,416

San Francisco

$9,556

Napa$1,016

Marin $192Contra Costa

$239

Sonoma $725

Santa Clara$1,521

Alameda$1,524

Solano 834

San Mateo10,994

San Francisco

70,710

Napa8,670

Marin 1,582Contra Costa

1,968

Sonoma 6,481

Santa Clara11,283

Alameda12,671

Impacts of Air Impacts of Air Reliant Users Reliant Users (Freight shippers)(Freight shippers)

VV

Air Freight at SFO Supports the Bay Area Economy

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Enables transport of goods from Bay Area to customers in both long-distance domestic and international markets. – Cargo services at SFO support Bay Area firms’ efforts to sell

products across the U.S. and the world, and thereby maximize shares of national and international trade.

Without the freight services offered at SFO (and if the similar scale of services are not assumed by another regional airport)– Companies in the Bay Area that produce and ship products

would find markets limited and market shares curtailed. – In turn, economic activity in the Bay Area that is associated

with production of goods shipped through SFO would be reduced.

Value of Air Freight

22

Represent sales of Bay Area companies in international and long distance US markets

The sales bring income into the Bay Area from these markets to support jobs in the region.

“Multiplier” effects (supplier sales and worker spending) generate additional jobs in the Bay Area.– Parts of the sales revenue are paid as wages & profits that

are spent in the region; and – parts of the sales revenue is paid to supplier firms in the

region for purchase of good and services that support additional jobs and wages

Goods produced in the Bay Area and shipped from SFO

Exports from SFO Exceed Imports (by value)

Value of Exports by Air – Value of Imports by Air = Surplus or DeficitComparison of SFO and U.S. Air Exports by Value

Source: US Census Bureau Foreign Trade Division, provided by WISERTrade. Dollars are in nominal value.

Shipments by Bay Area Firms through SFO

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Top Domestic Shipments

Top International Exports

Trans. Equip4%

Computer &

Electronics

67%

Elec. Equip. &

Appliances2%

Machinery8%

Chemicals7%

Economic Value

Jobs – 103,144 Labor Income (payroll) – nearly $9.9

Billion Business Revenue – over $29 Billion

$8.64B $7.99B

All Other12%

Computer &

Electronics

75%

Machinery19%

Textile / Mill Prod.2%

All Other 2%

Leather & Allied Prod.

2%

State & Local Tax State & Local Tax ImpactsImpacts

VIVI

State & Local Tax Revenues Generated by SFO

26

$409M65.0%

$3M33.3%

$603M65.1%

$309M32.8%

$1.32B52.8%

$220M35.0%

$6M66.7%

$323M34.9%

$633M67.2%

$1.2B47.2%

$2.5B$942M$927M$9M$629M

2012 SFO State & Local Tax Revenues

State & Local Taxes Generated On-Airport and from Visitor Spending

27* Direct tax revenues from on-airport employees are based on place of residence

Subtotal Direct:

$1.01B

Subtotal Indirect & Induced:

$544M

Total:

$1.56B

Subtotal Direct:

$1.01B

Subtotal Indirect & Induced:

$544M

Total:

$1.56B

$ millions

Summary of Summary of ImpactsImpacts

VIIVII

SFO- Economic Engine for the Bay Area*

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288,000 jobs

$55.8 billion in business revenues, of which $19.6 billion is personal income

$68,000 average income per employee

* direct, indirect and induced

Many Roles of SFO Create an Economic Engine for the Bay Area and its Counties

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AppendixAppendix

VIIIVIII

Elements of Economic Impacts and Interrelationships

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Spending by Visitors to Bay Area via SFO

Direct Payroll at SFO

Purchases of Goods & Services

Visitor Purchases of Goods & Services

(Meals, Hotels, Transportation, Retail)

Induced Effect (Off-Site)Spending of Direct + Indirect Worker Income

on Consumer Purchases:Sales at Other Businesses Jobs & Income to Workers

Total Economic ImpactsSum of Direct + Indirect + Induced Jobs & Income

Fiscal Impacts: Government Tax Revenues

Business and GovernmentAgencies Located at SFO

Direct EffectJobs at the Airport Income to Workers

Direct EffectJobs in Retail & Services

Income to Workers

Indirect Effects (Off-Site)Sales at Supplier Businesses:

Jobs and Income to their Workers

Flow of Causation

Calculation of Total Ef fect

Classification of Impacts

33

Direct (Initial Economic Activities)– Airport-based economic activities (airport terminal-related

and tenants)– Off-airport businesses serving airport travelers– Off-airport businesses dependent on the airport for cargo

movement

Indirect– Suppliers of goods and services to the airport and air-

dependent business

Induced– Personal income spent by households in the Bay Area and

re-circulated in the economy (earned by jobs in airport-based activities, visitor spending, air-dependent businesses, and suppliers of goods and services).

Direct Visitor Spending Ripples Through the Bay Area

34* direct, indirect and induced

$9 billion of visitor

spending in the Bay Area generated:

125,000 jobs $6 billion in labor income $7 billion in additional indirect and

induced output ($16 billion in total output)

Visitor Destinations Also Reach Beyond the Bay Area

35

Common Visitor Destinations

Outside the Bay Area