san luis obispo county regional airport: economic …

March 2019

SAN LUIS OBISPO COUNTY REGIONAL AIRPORT:

ECONOMIC ACTIVITY ANALYSIS

Economic Activity Analysis for:

Existing scheduled air service;

Select projected new air service scenarios;

All airport non-airline aviation economic

activity.

Attachment 1

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjf_e-X28rRAhVK5WMKHb8eCYUQjRwIBw&url=http://www.flypgd.com/ccaa/&psig=AFQjCNGfPX5bnlmXwvD7Zjaop_q0M5Ptvw&ust=1484795169487288

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Executive Summary 3

Study Outline 5

Study Method and Process 8

Overview of Study Area 12

Air Service Related Economic Impact 14

Net Visitor Economic Impact 19

Total Air Service Economic Impact 25

New Air Service Economic Impact 26

New Air Service Visitor Economic Impact 31

Non-Airline Aviation Economic Impact 36

General Aviation Net Visitor Impact 39

Total Non-Airline Economic Impact 41

Airport Revenue Summary 42

Summary 44

TABLE OF CONTENTS

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Volaire Aviation Consulting has been commissioned by the San Luis Obispo County Regional

Airport (SBP) to develop a comprehensive Airport Economic Activity and Impact study of the

Airport.

The study will estimate the economic impact of all measurable and runway dependent economic

activity at the Airport. Key areas of economic activity to be measured include:

Existing air service;

Net-new-visitors brought to the San Luis Obispo County region by existing air service;

Scenarios for new air service, including net-new-visitors generated by those services;

All non-airline runway dependent activity including: general aviation, FBOs, Flight Training,

MROs and other aviation related functions;

All government aviation and aviation support functions including: Airport Administration,

Federal Aviation Administration (FAA) and the Transportation Security Administration (TSA).

SBP is a significant economic engine for San Luis Obispo County and the surrounding region.

Key findings of this study include:

Overall

Total estimated annual SBP Airport regional economic output of $85.24 million dollars.

Approximately 92% of the annual output is the result of SBP airline service.

562 on-airport FTE jobs at SBP with labor income of $19.51 million.

If SBP was considered a single employer, it would be the 15th largest in the county.

Visitor Impact

An estimated 97,150 annual inbound visitors (2018) used SBP as their gateway to the County.

Those visitors spent an estimated $22.514 million dollars during their visits in 2018.

Visitor spending created an estimated 418.2 FTE jobs by direct, indirect and induced effect.

EXECUTIVE SUMMARY

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Those jobs created labor income of $15.059 million dollars.

Visitor spending resulted in $41.509 million dollars of annual regional economic output.

Potential New Airline Service

The two possible new air service routes to Portland, OR and San Diego, CA, would create

21.0 new on-airport FTE jobs and 26.4 new FTE jobs overall.

The two new routes combined would generate 23,967 net new annual visitors to the County.

These visitors would spend an estimated $5.45 million dollars locally each year, creating an

estimated 101.3 new FTE jobs via direct, indirect and induced effect.

These visitors would create an estimated $10.05 million in annual local economic output.

The Portland service would generate about 52.2% ($5,246,771) of the local impact while San

Diego service would generate 47.8% ($4,804,514)

Non-Airline Aviation

The Airport hosts 13 non-airline businesses or government entities.

Overall, the Airport handled 80,791 flight operations in 2018.

There are 377 aircraft based at the Airport by the latest count.

Private sector and government non-airline aviation support 228.4 on airport FTE jobs and

another 54.6 local FTE jobs via indirect and induced effect.

Those 283.0 local FTE jobs have an annual labor income of $19 million dollars and an

estimated annual economic output of $28.333 million dollars.

SBP is a critical element for the economy of San Luis Obispo County, both in terms of direct on-

airport employment and in terms of the volume of inbound visitors brought to the county as well

as the local spending of those visitors.

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Background – The Airport is located three miles south of San Luis Obispo, California. The Airport

has two runways on 340 acres of land. The Airport is home to 26 aviation related businesses or

government entities and some 210-based aircraft, ranging from small general aviation aircraft to

corporate jets. The airline terminal hosts three airlines offering nonstop service six domestic

destinations. In 2018, the Airport’s runways experienced 80,791 flight operations (landings or

takeoffs), an average of 221 per day. Airline traffic grew 19% in 2018 and totaled 485,911 (an

average of over 1,331 a day).

This study will estimate the annual economic impact of the runway dependent economic activities.

The estimate will be in 2019 dollars and will be based on information gathered from the Airport

Administration, airlines serving the Airport and other Airport tenants including government

agencies. The study will use common and accepted economic impact formulas and software.

Goal – The goal of this economic activity study is to define all “runway dependent” economic

activity at the Airport and then calculate the impact of that activity on the surrounding area.

“Runway dependent” means activity which would not occur save for the existence of the Airport

and its runways. The surrounding area is defined as San Luis Obispo County, California, the

county in which the Airport is located.

Calculating the local economic impact of an Airport is similar to calculating the impact of a factory,

shopping mall, hotel or any other place or facility that sustains employment and generates

commerce.

STUDY OUTLINE

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This study will define and quantify local economic activity which would not occur except for the

Airport’s runways. That activity is measured in the following ways:

Jobs created and sustained;

The local impact of visitors brought to the region via the Airport;

Local commercial spending by Airport businesses and governmental bodies;

Local capital expenditures by Airport businesses and governmental bodies.

Basic economic theory states any economic activity has, at a minimum, three impacts:

Direct impact- the measure of the jobs and spending at the Airport;

Indirect impact- the ripple effect of economic activity beyond the Airport, but resulting from

Airport jobs and spending;

Induced impact- the third level of impact which measures economic activity generated by

people and businesses benefiting from the indirect impacts.

All three levels, direct, indirect and induced, when taken together form the estimated overall

economic impact of the Airport’s runway-dependent businesses and government bodies.

The impact of an Airport’s economic activity is typically measured at the county level. In this case,

economic activity will be measured for San Luis Obispo County, California. As with any economic

impact analysis political boundaries such as a county line, are not perfect dividers of economic

activity. For net-new-visitor spending economic impacts this study will show overall regional

impact. This report endeavors, where possible, to dilute economic impacts where it is impossible

to know for certain how much of an impact occurred inside county lines and how much may have

spilled into an adjacent county.

Report structure – This study will measure the Airport’s economic activity in three ways.

First will be a measurement of all Airport economic activity related to existing airline service. This

will include airport employment related to airline service and airline related commercial and capital

spending.

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Second will be a measurement of all Airport economic activity that would occur should new,

hypothetical air service be added. The purpose of this analysis is to estimate the local economic

value of adding additional airline flights and destinations. Knowledge of the value of added flights

and routes can guide Airport decisions on incentives to recruit and support such flights.

Third will be a measure of all current Airport economic activity not airline or air service related.

This will include the numerous flight schools, charter air service operations and government

agencies that are runway-dependent, but not related to air service.

The study will then total the results of the three sections to constitute a snapshot of the Airport’s

current economic activity and local economic impact.

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Measuring Economic Activity – “Economic activity” is a broad term and can be measured in

multiple ways. In general terms, it means the level of activity, number of transactions, the value

of those transactions and the overall creation of jobs, goods or services produced within an

economic entity.

This can be as broad as measuring the economic activity of a country or as narrow as measuring

the economic activity of a single factory. On a macro level, measuring a country or a state,

economic activity can be measured by Gross Domestic Product (GDP). Beneath that, the county

level is commonly referred to as Metropolitan Statistical Area (MSA) while city level economic

activity is commonly measured by Gross Metropolitan Product (GMP).

Still further, this study strives to measure the economic activity and impact of an Airport upon the

County where it is located. At this local level we will measure the economic impact of each job at

the Airport, within the airline sector and the non-airline related sector. This will also include a

broader regional measure of the economic impact of net-new-visitors to the region brought in by

the Airport’s air services.

Survey Forms and Results – One essential element of measuring Airport economic activity is

gaining from each on-airport company or government body, by survey, the economic information

needed to calculate the scale and scope and thus the impact of on-field economic activity. Volaire

Aviation, assisted by Airport Administration, surveyed all the airport tenants that are runway-

dependent. The information provided by the survey is essential to generating the economic impact

estimates. The basic survey form consists of a few questions and was sent to each airport tenant.

The survey results for individual companies were totaled to keep confidential any sensitive

economic data a company may have.

STUDY METHOD AND PROCESS

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Other Data Sources: A host of data sources are accessed to provide the information needed to

complete this study. Airport Administration provided a range of (publicly available) information to

support the analysis of various economic activities at the Airport. Department of Transportation

(DOT) reports provided the necessary background on SBP airline passenger traffic needed to

project inbound visitor volumes. Tourism Economics, an Oxford Company, and the local County

CVB provided information related to out-of-state tourism spending and length of stay data.

Economic Activity and Impact Software – Volaire Aviation Consulting uses the IMPLAN

economic modeling software. IMPLAN is a world leader in providing economic impact data and

modeling to governments, universities as well as public and private sector organizations for

assessing the economic impacts of existing or projected economic activity in all economic sectors.

IMPLAN software takes survey and other collected data and traces economic activity through the

local economy and provides direct, indirect and induced impacts on employment, wages and

taxes.

The IMPLAN software is constantly updated with the latest US Bureau of Labor Statistics and

Bureau of Economic Analysis data as well as US Census data. The software also accesses

Regional Economic Information Systems (REIS). Using classic input-output analysis in

combination with regional specific social accounting matrices and multiplier models, IMPLAN

provides a highly accurate and adaptable model for its users. The IMPLAN database breaks out

captured economic data to the state, county and zip code level.

IMPLAN software is a widely and commonly accepted economic activity analysis tool. It was used

for the December 2016 “Economic Impact of Out-of-State Visitor Spending in California” report

issued by Tourism Economics, an Oxford Economics Company, on behalf of Visit California.

Assumptions, Terms and Definitions – Any economic activity and impact study must make

certain assumptions in the process of analysis.

Key assumptions in this study include, but are not limited to, the following:

Runway dependent. As previously noted, the study confines itself to economic activity that

relies on the Airport’s runways meaning if the Airport did not exist the economic activity

would either not occur or would take place somewhere else.

https://en.wikipedia.org/wiki/Input-output_analysis

https://en.wikipedia.org/wiki/Social_Accounting_Matrices

https://en.wikipedia.org/wiki/Multiplier_Models

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This study is a snapshot of various Airport economic activities. Economic activity is not

static as it can grow or shrink.

The Airport’s economic activity is assumed to take place in San Luis Obispo County. As

has been noted, county lines are not perfect dividers of economic activity.

This study is only as good as the economic activity survey results gathered from the

various entities that populate the Airport.

The IMPLAN software is, as of this writing, programed with year 2017 economic data that

the software extrapolates forward to 2019 by its own internal formulas.

This study makes assumptions about dilution of economic impact, to remain conservative

in its conclusions. For example, airline inbound visitor traffic and the resulting visitor

spending is arbitrarily reduced by a measurable factor to recognize that some portion of

inbound visitor traffic would come to the San Luis Obispo County region anyway if the

Airport did not offer air service. Volaire Aviation worked closely with Airport staff and other

local topic experts to determine dilution factors for each economic activity assumed to

have them.

Terms and Definitions: Important terms used in this study and their definitions include:

Direct Impact – Economic impact generated on-site, in this case at the Airport. This includes

employment, payroll, commercial and capital expenditures at the Airport.

Indirect Impact – Economic impact that is not at the Airport, but is driven by on-airport economic

activity such as Airport workers spending their payroll locally or the impact of an Airport tenant’s

local commercial spending.

Induced Impact – Economic impact downstream and beyond the combined direct and indirect

impacts. This is commonly known as the “multiplier effect”. It can refer to services or products

provided to organizations that derive business from Airport on-site businesses.

Full-time Equivalents or FTEs – A full-time job is year-round and 40 hours per week. Airport

entities included in the survey were asked to identify the number of FTEs in place.

Input (or Factors of Production) – The ingredients of economic activity; land, labor, capital and

enterprise.

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Output – The fruit of economic activity; whatever is produced using the input.

Labor Income – The sum of payroll and benefits paid to workers. Airport entities included in the

survey were asked to provide or estimate annual labor income. Where this was not provided,

IMPLAN can project labor income for most job types.

Value Added – The incremental increase(s) in economic production or dollars with each stage of

production or round of spending.

State and Local Taxes – The sum of sales, property, motor vehicle, severance, corporate, income

and other state and local taxes.

Federal Taxes – The sum of social, excise, custom, corporate and personal income and other

federal taxes.

Fiscal Year – In this report there is DOT and other data that was current through June 30, 2018

(Fiscal Year 2018 Q2) at the time of its use.

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Location and Population – SBP is in San Luis Obispo County, California. The County has a

2016 population of 283,405. This is up 6% from the 2010 census population of 269,637. County

population has grown 250% in the 58 years since 1960. The county population grew by double

digit percentages every decade from 1910 to 2000. The period from 2000 to 2010 saw a more

modest 9.3% population growth. San Luis Obispo County is the San Luis Obispo-Paso Robles

Metropolitan Statistical Area (MSA).

The County ranks 23rd in the state in terms of population out of 58 counties. Most of the County’s

population is near Highway 101 or west toward the Pacific Coast. Much of the eastern side of the

County is sparsely populated. The County ranks 34th in California in terms of population density

with approximately 76 persons per square mile.

The IMPLAN Economic Analysis Software develops a snapshot of the County economy. It

captures key macroeconomic metrics related to population, employment levels, income and

compensation and household information. It then provides a summary of the local economy in

terms of Gross Regional Product (GRP) and various key economic metrics.

Table 1

Metric 2017

Gross Regional Product $15,069,713 Employee Compensation $7,188,575,180

Total personal Income $15,351,520,197 Proprietor Income $1,791,607,747

Total Employment 169,320 Other Property Type Income $4,704,838,520

Tax on Production and Import $1,384,839,266

Number of Industries 296 Total Value Added $15,069,860,714

Land Area (Sq. Miles) 3304

Households $14,146,559,642

Population 283,405 State/Local Government $3,739,223,940

Total Households 111,436 Federal Government $166,021,966

Median HH Income $47,446 Capital $4,282,696,606

Exports $7,534,181,103

Imports ($13,445,656,240)

Institutional Sales ($1,353,166,303)

Total Final Demand $15,069,860,714

IMPLAN ECONOMIC IMPACT SUMMARY OF SAN LUIS COUNTY CALIFORNIAValue Added Economic Output Snapshot

Total Economic Output Snapshot

OVERVIEW OF STUDY AREA

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Economy – The $15 billion-dollar San Luis Obispo County economy is primarily a service

economy with key economic sectors being education, healthcare and government services.

Tourism and Agriculture, including wineries and wine making are other key economic sectors.

The map illustrates the location of San Luis Obispo County and the four adjoining counties; Kern,

Kings, Monterey and Santa Barbara.

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Air service at San Luis Obispo Regional Airport supports across the typical spectrum of airline

station and airport airline operations job categories. This includes airline customer service and

aircraft servicing, Transportation Security Administration, Law Enforcement, terminal rental car

and concessions and Airport Administration.

Current Air Service – SBP’s air service footprint has grown dramatically in recent years. The

Airport has nonstop network carrier service to five hub airports. Service is provided by three

network carriers: American, United and the 2017 addition of Alaska Airlines. American Airlines

will add nonstop service to its Dallas hub beginning April 2, 2019.

AIR SERVICE RELATED ECONOMIC IMPACT

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SBP air service has grown dramatically in the past decade. DOT reports show traffic has

increased consistently since FY 2013 and is up 67% since FY 2011. FY 2018 was the second

consecutive year of double-digit passenger traffic growth.

Table 2

The impressive increases in traffic since FY 2013 have been driven by dramatic increases in

service and seat capacity.

Table 3

San Luis Obispo County Regional Airport capacity, measured in airline seats and flights, is up by

double-digit percentages each year since FY 2016, according to DOT reports.

The average size of aircraft used at the Airport has increased as well, up from 36 seats per flight

in FY 2011 to 54 seats per flight in FY 2018; an increase of 53%. Seat capacity is up 58% since

FY 2011 and the number of airline flights operated increased 3% in the same period.

For the most recent 12 months (ended June 30, 2018) United Airlines has the dominate share of

market service and traffic with approximately 55% of market traffic and 57% of market seat

Year Carriers Domestic International Total Change

FY 2011 United, US Airways 235,442 17,455 252,897

FY 2012 United, US Airways 221,307 18,206 239,513 -5.3%

FY 2013 United, US Airways 223,862 19,294 243,156 1.5%



FY 2016 United, American 276,479 17,471 293,950 5.9%

FY 2017 United, American, Alaska 318,134 18,891 337,025 14.7%

FY 2018 United, American, Alaska 400,017 22,826 422,843 25.5%

SAN LUIS OBISPO COUNTY REGIONAL AIRPORT ANNUAL TRAFFIC FY 2011 - 2018Passenger Traffic

Seats

Year Carriers Seats Flights Seats/Flt Change

FY 2011 United, US Airways 369,764 10,413 36

FY 2012 United, US Airways 343,888 10,580 33 -7.0%


FY 2014 United, US Airways 379,405 10,753 35 15.1%


FY 2016 United, American 405,559 8,457 48 11.6%

FY 2017 United, American, Alaska 446,245 9,052 49 10.0%

FY 2018 United, American, Alaska 584,094 10,745 54 30.9%

SAN LUIS OBISPO COUNTY REGIONAL AIRPORT ANNUAL CAPACITY FY 2011 - 2018

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capacity. American has about 34% of traffic and capacity with Alaska Airlines holding the

remaining balance. American’s addition of Dallas service in April 2019 will increase that carrier’s

share of both traffic and seat capacity.

Table 4

Airline Service Related On-Airport Employment – Airline service at SBP creates significant

on-airport employment. This includes airline employees who perform customer service and load

and unload arriving and departing flights, Transportation Security Administration (TSA) workers

who perform preflight passenger screening, law enforcement officers who support passenger

screening, terminal concessions and rental car agency employees and a portion of Airport

Administration and staff, including the Airport Rescue and Fire Fighting unit (ARFF).

Airline Employees – The three airlines that serve the Airport employ a total of 90 full-time and

part-time employees. Employment economic impact is measured in units of Full-Time Equivalent

(FTE) employees. Since some airline employees at the Airport are part-time and can fluctuate,

we have estimated airline employment at the Airport to be 80 FTEs.

Airport Administration – Airport Administration oversees airport operations including facility

upkeep and managing the airline terminal. Total Airport staff is 16 FTEs. A small portion of Airport

staffing is associated with airline service, most is associated with non-airline operations (General

Aviation, FBO, Flight Schools, Aircraft Maintenance vendors, etc.).

The Airport has estimated, for this report, that 20% of the total Airport Administration staffing and

budget are associated with airline service and 80% are associated with non-airline functions. The

Airport staff is 16 FTEs, thus airline related staff is 1.6 FTEs with $152,819 in annual payroll.

Aircraft Rescue and Fire Fighting (ARFF) – Airports with air service must have firefighting

equipment and personnel available during airline operations. The Airport has an ARFF station

staffed with eight FTE employees.

Carrier Routes Domestic International Total Share Seats Share Load Factor Departures Avg Seats

American Phoenix 143,905 4,940 148,845 34.5% 194,124 33.4% 76.7% 2,528 77

Alaska Seattle 45,000 495 45,495 10.5% 55,024 9.5% 82.7% 724 76

United Denver, LAX, SFO 223,733 13,500 237,233 55.0% 332,358 57.2% 71.4% 6,288 53

All 412,638 18,935 431,573 100.0% 581,506 100.0% 74.2% 9,540 61

SAN LUIS OBISPO AIRLINE TRAFFIC AND SERVICE SHARE; FY 2018

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Transportation Security Administration – The TSA employs 17 FTEs at SBP for airline passenger

screening duties. The Sheriff’s Department provides police support for TSA screening and the

Airport pays the Sheriff’s Office to support 16 hours per day of staffing. The Sheriff’s Department

uses Officers from the broader pool of the department staff. We estimate that Law Enforcement

staffing at the Airport requires 3.5 FTE deputies.

Rental Car, Parking and Terminal Concessions – There are four rental car brands available on-

airport via three rental car agencies. These three agencies employee 14 full-time employees and

13 part-time employees for an estimated FTE count of 20.5. The terminal parking lot is entirely

automated and overseen by Airport Administration. There is a Café located in the terminal beyond

security. There is a full-service restaurant located near the terminal building. The Café employs 3

FTEs. We will consider the full-service restaurant, because of its remote location, to be associated

with non-airline airport activities.

Total at-Airport Airline Related Employment – In the economic sectors defined by this study

section, there are 135.2 total FTEs related to airline service with an estimated total annual labor

income of $5,053,370.

Table 5

The chart on the next page shows the estimated area economic impact of these 135.2 FTEs and

their $5.0 million-dollar payroll, including $9.0 million in direct effect output. Indirect impact is 16.1

FTEs with $3.27 million in output while induced effect is 20.6 FTEs and $3.294 million in output.

Total On-Airport Airline Sector annual economic impact (direct, indirect and induced) is 171.9

FTEs with $15.57million in annual output.

Sector Full Time Part Time FTE Salary/Benefit Remarks

Airport Admin 3.2 0.0 3.2 $308,000 20% of Airport Administration

Airline 70.0 20.0 80.0 $2,445,230 3 airline entities

Rental Cars 14.0 13.0 20.5 $552,314 3 agencies

ARFF 8.0 0.0 8.0 $480,000

Concessions 3.0 0.0 3.0 $80,826 In terminal concessions

TSA/Sheriff 20.0 0.5 20.5 $1,187,000

Total 118.2 33.5 135.2 $5,053,370

SUMMARY OF ON-AIRPORT AIRLINE RELATED EMPLOYMENT

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Table 6

Airport/ARFF Full Time Labor Value

Output Equivalents Income Added Output

Direct Effect 11.2 $677,522 $55,955 $656,802

Indirect Effect 1.1 $59,696 $81,021 $153,362

Induced Effect 3.4 $128,923 $217,616 $375,973

Total 15.7 $866,141 $354,592 $1,186,136

State& Local Tax $53,334

Federal Tax $118,810

AIRLINE Full Time Labor Value


Direct Effect 80.0 $2,445,230 $3,750,316 $6,127,955

Indirect Effect 8.8 $593,893 $895,658 $1,849,914

Induced Effect 8.7 $529,404 $1,022,611 $1,693,727

Total 97.6 $3,568,528 $5,668,586 $9,671,596



TSA/LEO Full Time Labor Value


Direct Effect 20.5 $1,211,330 -$490,359 $632,404

Indirect Effect 3.6 $186,811 $344,516 $787,748

Induced Effect 5.9 $246,014 $474,710 $786,634

Total 30.0 $1,644,155 $328,868 $2,206,787



Rental/Concessions Full Time Labor Value


Direct Effect 23.5 $633,140 $971,064 $1,586,703

Indirect Effect 2.6 $153,776 $231,912 $478,996

Induced Effect 2.6 $137,078 $264,783 $438,554

Total 28.7 $923,994 $1,467,759 $2,504,252



Full Time Labor Value


Direct Effect 135.2 $4,967,222 $4,286,977 $9,003,863

Indirect Effect 16.1 $994,176 $1,553,107 $3,270,019

Induced Effect 20.6 $1,041,420 $1,979,720 $3,294,889

Total 171.9 $7,002,817 $7,819,804 $15,568,771


Federal Tax $1,397,958

CURRENT AIR SERVICE AIRPORT EMPLOYMENT ECONOMIC IMPACT

CURRENT AIR SERVICE AIRPORT EMPLOYMENT ECONOMIC IMPACT

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.

.

ant global network brand name carriers, American, Delta and United, all provide service at marck.

Estimating Annual Domestic Visitor-by-Air Traffic – Tourism is an important economic sector

for California and for San Luis Obispo County. Tourism Economics, an Oxford Economics

Company, generated two excellent studies of California Tourism Economics; one covering the

whole state and one focused on San Luis Obispo County.

Table 7

These reports provide an excellent

profile of overnight visitors to California

in general and to San Luis Obispo

County in particular. At the right are key

visitor profile metrics for visitors to this

region. The profile estimates that 75% of

visitors are leisure while 25% are on

business.

Average daily spend is $150 per person

including transportation (13% of total)

and $130 excluding local transportation.

The average stay is 2.022 nights and the

average visiting party has 1.7 persons.

This profile will be applied to the

estimated visitor by air total generated by

SBP air service to enable estimates of

regional visitor spending economic

impact.

Domestic Out-of-State Visitor Spending – The June 2018 Tourism Economics study estimates

out-of-state visitor spending can be allocated among five primary categories: Lodging, Food &

VISITOR BY AIR ECONOMIC IMPACT

Arizona 14.7%

Nevada 13.1%

Utah 6.6%

Washington 6.1%

Oregon 6.1%

Colorado 4.4%

Out-of-State Visitors 4,600,000

Est. Out-of-State Spending $1,394,500,000

Est. Out-of-State Spend/Visit $303.15

Estimated Average Stay 2.0220

Est. Average Daily Spend $149.93

Leisure 75%

Vacation 35%

Visit Friends Relatives 33%

Other Leisure 14%

Business & Convention/Meeting 25%

1 -3 nights 85%

4 - 7 nights 10%

8 + nights 5%

Average 2.022 nights

Out-Of-State Visitors and Spending

SAN LUIS OBISPO COUNTY VISITOR PROFILE

Average Spend Per Day

Length of Stay

Purpose of Trip

Top Origin States

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Drink, Retail, Recreation and Transportation within Destination.

DOT reports show that SBP enplaned and deplaned 420,795 domestic passengers in FY 2018.

DOT data provides us with a carrier breakdown of point of origin for these passengers.

Table 9

The chart shows United Airlines traffic has a high resident point of origin while Alaska Airlines

traffic has a slight inbound orientation. For all carriers, San Luis Obispo domestic traffic has a

57% outbound origin bias for the 12 months ended 9/30/2018.

Traffic Resident Visitor % RES % VIS Avg Fare Avg Res Avg Vis % Res % Vis

148,133 76,512 69,619 51.65% 47.00% 250.23$ 248.54$ 252.73$ 99.32% 101.00%

Traffic RES VIS % res % vis Avg Fare Avg Res Avg Vis % Res % Vis

48,535 23,155 25,156 47.71% 51.83% 194.95$ 197.52$ 192.64$ 101.32% 98.81%


224,117 138,268 84,043 61.70% 37.50% 241.81$ 244.52$ 237.79$ 101.12% 98.34%


420,795 237,945 178,818 56.55% 42.50% 239.41$ 241.30$ 237.25$ 100.79% 99.10%

SAN LUIS OBISPO DOMESTIC TRAFFIC POINT OF ORIGIN BY CARRIER: YEAR 2018 Q3

All Carriers

United

Alaska

American

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The combination of Visit California average stay and average spend data, the Tourism Economics

data on allocation of visitor spending across the economy, and the DOT inbound passenger data,

combine to provide an accurate baseline of San Luis Obispo visitors arriving via the existing air

service at the SBP.

To be conservative in estimating the Airport’s visitor-by-airline-service economic impact, a dilution

is added to the equation during the analysis. The dilution is an assumption about how many

visitors who used existing SBP air service for transportation would have come anyway, either by

car or other ground transportation, or through another airport, if SBP air service did not exist.

Unfortunately, there is no mathematical formula to precisely calculate this dilution. To factor in

this dilution, 25% of all domestic visitors generated via SBP air service will be assumed to have

come anyway, even if the air service did not exist. This percentage is arbitrary and simply

designed to recognize some portion of regional visitors via the Airport’s air service would have

come even if that air service did not exist.

Visitor-by-air spending economic impact can then be calculated by combining all the metrics and

variables that have been identified.

Table 10

Even with a 25% dilution for visitors-by-air that are assumed to come anyway absent SBP air

service, the FY 2018 domestic visitors-by-air are estimated to have generated $20,331,081 in

spending while visiting. Based on the June 2018 Tourism Economics study of California visitor

spending, this $20.3 million in visitor spending was allocated as $5.9 million on lodging, $4.3

million for food and drink, $2.44 million on recreation, $5.1 million on retail and $2.643 million on

transportation. Each of these sector spending estimates generates its own economic impact.

FY 2018 SBP Percent Inbound Inbound

Domestic O&D Inbound Origin O&D Visitors

420,795 43% 178,838 89,419

Net Visitors Avg Days Visit Daily Spend Total Annual

Inbound Visitors Less 25% By Air Stay Days Per Visit Day Spend

89,419 22,355 67,064 2.022 135,603.8 $149.93 $20,331,081

Daily Spend

Allocation % Lodging % Food & Drink % Recreation % Retail % Transportation Total

100% 29% 21% 12% 25% 13% 100%

$20,331,081 $5,896,013 $4,269,527 $2,439,730 $5,082,770 $2,643,040 $20,331,081

SAN LUIS OBISPO DOMESTIC VISITORS-BY-AIR ESTIMATE

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International Visitor Spending – Neither of the Tourism Economics reports, that for San Luis

Obispo County and that for California, offer specific international visitor profile information that is

different from that of domestic visitors. In this case we will use the domestic visitor profile and

spending pattern profile to generate estimated international visitor spending and economic

impact.

Table 11

International traffic at San Luis Obispo Regional Airport has a significant bias toward local resident

origin. For FY 2018, roughly 76% of the 20,052 recorded international passengers that used the

Airport were local residents.

Applying the same visitor stay and spending metrics as domestic visitors, generates the below

estimate of international visitor spending.

Table 12

Using the same formulas as for domestic visitors, SBP’s FY 2018 reported international O&D

traffic translates into 1,692 inbound net international visitors. The average stay of 2.022 days

translates into 3,421 visit days and, with a daily spend of $150, generates a total spend of

$513,149. The chart above then breaks that annual spending down by economic sector among

the five visitor spending categories.

The combination of domestic and international visitors by air results in a total of 68,756 net visitors

Traffic Resident Visitor % RES % VIS Avg Fare Avg Res Avg Vis % Res % Vis

20,052 15,234 4,508 75.97% 22.48% 536.55$ 531.37$ 521.63$ 99.03% 97.22%

SAN LUIS OBISPO INTERNATIONAL TRAFFIC POINT OF ORIGIN: YEAR 2018 Q3

FY 2018 Percent Inbound Inbound

International O&D Inbound Origin O&D Visitors

20,052 23% 4,512 2,256



2,256 564 1,692 2.022 3,421 $150 $513,149

Daily Spend


100% 29% 21% 12% 25% 13% 100%

$513,149 $148,813 $107,761 $61,578 $128,287 $66,709 $513,149

SAN LUIS OBISPO INTERNATIONAL VISITORS-BY-AIR ESTIMATE

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by air and an estimated 139,025 visitor days. Annual visitor spending totals $20.854 million

dollars, distributed over the five sectors as $6.05 million for lodging, $4.438 million for food, $2.5

million for recreation, $5.2 million for retail and $2.7 million for local transportation.

Table 13

The IMPLAN Economic Impact Software can take annualized spending by economic sector, in

this case lodging, food and drink, recreation, retail or transport and anticipate the economic

activity and employment impacts for that spending.

The chart on the following page shows the estimated 2018 economic impact (region-wide) of the

SBP Airport domestic visitors-by-air, broken down by the five economic sectors and then in total.

Spending on Food & Drink is estimated to support 95.1 FTEs with annual labor income of $2.9

million via direct, indirect and induced effect. Local Transportation visitor spending is estimated

to support 69.7 FTEs with $2.993 million in labor income. Lodging visitor spending is estimated

to support 82.2 FTEs with $2.589 million in labor income. Recreation visitor spending is estimated

to support 64.4 FTEs with $2.763 million in labor income. Retail visitor spending is estimated to

support 76.0 FTEs with $2.68 million in labor income.

In total, 2018 SBP existing air service net visitors-by-air supported 387.4 FTEs with $13.948

million in annual labor income via direct, indirect or induced effect.

FY 2018 Percent Inbound Inbound

International O&D Inbound Origin O&D Visitors

440,847 42% 183,350 91,675



91,675 22,919 68,756 2.022 139,025 $150 $20,853,722

Daily Spend


100% 29% 21% 12% 25% 13% 100%

$20,853,722 $6,047,579 $4,379,282 $2,502,447 $5,213,431 $2,710,984 $20,853,722

SAN LUIS OBISPO COMBINED VISITORS-BY-AIR ESTIMATE

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Table 14

Food/Drink Full Time Labor Value


Direct Effect 79.4 $2,225,753 $2,475,728 $4,379,282

Indirect Effect 5.7 $264,689 $470,552 $813,192

Induced Effect 10.0 $431,527 $833,276 $1,380,345

Total 95.1 $2,921,969 $3,779,556 $6,572,819



Transportation Full Time Labor Value


Direct Effect 50.1 $2,053,988 $3,050,365 $5,421,968

Indirect Effect 9.4 $494,873 $746,105 $1,292,396

Induced Effect 10.3 $445,025 $859,476 $1,423,643

Total 69.7 $2,993,885 $4,655,946 $8,138,007



Lodging Full Time Labor Value


Direct Effect 59.1 $1,615,284 $3,508,105 $6,047,579

Indirect Effect 13.8 $599,800 $906,873 $1,608,981

Induced Effect 9.3 $373,498 $672,813 $1,146,266

Total 82.2 $2,588,582 $5,087,790 $8,802,826



Recreation Full Time Labor Value


Direct Effect 46.2 $1,895,989 $2,815,722 $5,004,894

Indirect Effect 8.7 $456,806 $688,712 $1,192,981

Induced Effect 9.5 $410,792 $793,363 $1,314,132

Total 64.4 $2,763,587 $4,297,797 $7,512,007



Retail Full Time Labor Value


Direct Effect 60.5 $1,978,540 $3,445,500 $5,213,431

Indirect Effect 6.3 $301,568 $528,777 $928,490

Induced Effect 9.2 $400,196 $772,421 $1,279,811

Total 76.0 $2,680,304 $4,746,699 $7,421,732





Direct Effect 295.2 $9,769,554 $15,295,420 $26,067,154

Indirect Effect 43.9 $2,117,736 $3,341,020 $5,836,042

Induced Effect 48.3 $2,061,037 $3,931,349 $6,544,196

Total 387.4 $13,948,326 $22,567,788 $38,447,391

State& Local Tax $3,785,310


CURRENT SERVICE ESTIMATED VISITOR BY AIR SPENDING IMPACT

CURRENT SERVICE ESTIMATED VISITOR BY AIR SPENDING IMPACT

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SBP current air service-related aviation activities, including regional airline visitors-by-air,

generate a total of 559.3 FTE jobs with $20.951 million in annual labor income via direct, indirect

and induced effect.

Table 15

Annual total economic output is $54,016,163 million dollars.



Direct Effect 135.2 $4,967,222 $4,286,977 $9,003,863

Indirect Effect 16.1 $994,176 $1,553,107 $3,270,019

Induced Effect 20.6 $1,041,420 $1,979,720 $3,294,889

Total 171.9 $7,002,818 $7,819,804 $15,568,771





Direct Effect 295.2 $9,769,554 $15,295,420 $26,067,154

Indirect Effect 43.9 $2,117,736 $3,341,020 $5,836,042

Induced Effect 48.3 $2,061,037 $3,931,349 $6,544,196

Total 387.4 $13,948,327 $22,567,789 $38,447,392





Direct Effect 430.4 $14,736,776 $19,582,397 $35,071,017

Indirect Effect 60.0 $3,111,912 $4,894,127 $9,106,061

Induced Effect 68.9 $3,102,457 $5,911,069 $9,839,085

Total 559.3 $20,951,145 $30,387,593 $54,016,163



SUMMARY: CURRENT SERVICE VISITOR ECONOMIC IMPACT

TOTAL CURRENT AIR SERVICE ECONOMIC IMPACT

SUMMARY: CURRENT AIR SERVICE EMPLOYMENT ECONOMIC IMPACT

TOTAL AIRLINE ECONOMIC IMPACT

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Possible New Air Service Impacts – Two new air service scenarios will be studied to determine

the estimated economic impact of each.

The first scenario is for the addition of one daily round trip to San Diego flown by Alaska. This

service is forecast to generate 715 annual flights in and out of SBP using 76-seat Q400 aircraft.

This service is forecast to generate 42,518 annual O&D passengers with an estimated 22,917 of

those O&D being inbound origin or visiting O&D. This means an estimated 11,459 inbound origin

visitors to San Luis Obispo.

NEW SERVICE IMPACTS

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The second new service scenario is for once per day service to Portland, OR, again offered by

Alaska, this time with 76-seat E-175 regional jets. This service is forecast to generate 715 annual

flights in and out of SBP.

This service is forecast to generate 45,074 annual O&D passengers with an estimated 25,016 of

Forecast Parameters

R oute: S BP-S AN Aircraft: Q400

R oundtrips per Day: 1 .0 S eats/S egment: 76

Annual Departures (98% Comp): 71 5 Annual Available S eats : 54,370

Passenger Parameters

Passengers per S egment: 59.4 Projected Load Factor: 78.20%

Point of Origin Parameters

Current S AN/Connect Origin 63.3% Current S BP Origin 36.7%

Projected S AN/Connect Origin 53.9% Projected S BP Origin 46.1 %

Inbound Passengers 22,91 7 Outbound Passengers 1 9,601

Table 1 6: Forecast Performance: San Luis Obispo - San Diego

Volaire Aviation Analys is of US DOT Data and S BP R etention Data, YE 2Q1 8

Total Passengers (Annual): 42,51 8

Inbound Vis itors 1 1 ,459

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those O&D being inbound origin or visiting O&D. This means an estimated 12,508 inbound origin

visitors to San Luis Obispo.

New Air Service Airport Employment Impacts – The two possible new airline services will

require additional staffing in the following economic sectors: airline employees to provide ground

handling and customer service for the new flights, the Transportation Security Administration and

Rental Car and Concessions. New services are not assumed to cause any staffing changes for

the Airport Administration and Operations or for the Airport ARFF.

Ground Handling – The number of additional airline employees to process the arrival and

departure of the new flights will partly depend on the timing of the new flights during the day. Both

new services are operated with 76-seat aircraft which means ground handling staffing needs will

be similar for both operations.

Table 18

The chart suggests each new service will require 6.9 airline FTE employees or 13.8 new FTE

employees if both services are operated and no critical mass benefits were achieved.

Forecast Parameters

R oute: S BP-PDX Aircraft: E R J 1 75

R oundtrips per Day: 1 .0 S eats/S egment: 76

Annual Departures (98% Comp): 71 5 Annual Available S eats : 54,370

Passenger Parameters

Passengers per S egment: 63.0 Projected Load Factor: 82.90%

Point of Origin Parameters

Current PDX/Connect Origin 61 .5% Current S BP Origin 38.5%

Projected PDX/Connect Origin 55.5% Projected S BP Origin 44.5%

Inbound Passengers 25,01 6 Outbound Passengers 20,058

Table 1 7: Forecast Performance: San Luis Obispo - Portland, OR

Volaire Aviation Analys is of US DOT Data and S BP R etention Data, YE 2Q1 8

Total Passengers (Annual): 45,073

Inbound Vis itors 1 2,508

Annual Staff for Hours Annual FTEs @

Route Flights Departure Per Staff Staff Hours 2,080/Yr/FTE

Portland 715 5 4 14,300 6.9

San Diego 715 5 4 14,300 6.9

Combined 1,430 na na 28,600 13.8

SBP NEW SERVICE GROUND HANDLING STAFFING MODEL

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Transportation Security Administration – The TSA employs 17 FTEs at SBP. In 2018, this staff

screened 232,619 revenue passengers or 13,683 per FTE. The new domestic routes will enplane

22,537 annual passengers (Portland) and 21,259 annual passengers (San Diego). These new

passengers are predicted to require 1.6 additional TSA FTE employees per new route or a total

of 3.2 additional FTEs if both routes are flown, based on the productivity of the current staff.

Table 19

Rental Car and Concessions – The three rental car agencies employ 20.5 FTEs to support current

rental car activity at the Airport. We are estimating each new air service will generate increased

rental car demand. We are estimating that this additional demand will require 2.0 new FTEs per

new route or a total of four new FTEs if both routes are operated.

Table 20

In summary, each of the possible new air services is estimated to generate 10.5 additional FTE

jobs at the Airport. If both new routes are operated a total of 21.0 additional FTE jobs would be

created.

The two new services combined generate a total of 26.4 new FTE jobs in the county. These jobs

have annual labor income of $1.0 million dollars. Total annual output from the new FTEs is

estimated to be $2.367 million dollars annually.

Annual TSA Screened TSA

Route Enplanements Per FTE FTE

Portland 22,537 13,683 1.6

San Diego 21,259 13,683 1.6

Combined 43,796 13,683 3.2

SBP NEW SERVICE TSA STAFFING ESTIMATE

PDX SAN Airport FTE

Sector Alone Alone Combined

Airport 0.0

TSA 1.6 1.6 3.2

Airline 6.9 6.9 13.8

Rental/Concessions 2.0 2.0 4.0

Total 10.5 10.5 21.0

SBP AIR SERVICE ON-AIRPORT STAFFING

0.0

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Table 21

Airport/ARFF Full Time Labor Value


Direct Effect 0.0 0.0 0.0 0.0

Indirect Effect 0.0 0.0 0.0 0.0

Induced Effect 0.0 0.0 0.0 0.0

Total 0.0 $0 $0 $0

State& Local Tax $0

Federal Tax $0

AIRLINE Full Time Labor Value


Direct Effect 13.8 $421,802 $646,930 $1,057,072

Indirect Effect 1.5 $102,447 $154,501 $319,110

Induced Effect 1.5 $91,322 $176,400 $292,168

Total 16.8 $615,571 $977,831 $1,668,350



TSA/LEO Full Time Labor Value


Direct Effect 3.2 $193,813 -$78,457 $101,185

Indirect Effect 0.5 $29,890 $55,123 $126,040

Induced Effect 0.9 $39,362 $75,954 $125,862

Total 4.6 $263,065 $52,619 $353,086


Federal Tax $45,034

Concessions Full Time Labor Value


Direct Effect 4.0 $87,330 $133,940 $218,856

Indirect Effect 0.4 $21,210 $31,988 $66,068

Induced Effect 0.4 $18,907 $36,522 $60,490

Total 4.9 $127,447 $202,449 $345,414


Federal Tax $28,303



Direct Effect 21.0 $702,945 $702,412 $1,377,112

Indirect Effect 2.5 $153,547 $241,611 $511,218

Induced Effect 2.9 $149,592 $288,876 $478,520

Total 26.4 $1,006,083 $1,232,899 $2,366,850



NEW SERVICE AIRPORT EMPLOYMENT ECONOMIC IMPACT

NEW SERVICE AIRPORT EMPLOYMENT IMPACT SUMMARY

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This report has already defined the estimated net visitor economic impact for the existing Airport

air services for the year 2018. Net visitor economic impact for the possible new air services will

use the same Tourism Economics data and visitor behavior assumptions as were used for the

existing visitor estimates.

The possible new services are from Portland and San Diego. Both cities have limited international

air service and the proposed carrier, Alaska Airlines, has minimal international service at those

two hub airports. Therefore, we will not make a separate international visitor projection for the

new services as they are unlikely to generate measurable new international visitors. In addition,

the spend metrics are the same for domestic and international visitors.

The Portland service is forecast to generate 25,016 annual inbound origin O&D, which means

12,508 individual inbound origin passengers. The San Diego service is forecast to generate

21,259 annual inbound origin O&D, which means 11,459 individual inbound origin passengers.

Table 22

The two new services are then estimated to generate 17,975 net new visitors after dilution for

those that would have come even if the new services were not flown. Those net new visitors are

estimated to generate 36,345 visit days and spend $5,451,780 locally. The spending is allocated

among the five economic sectors using the allocation percentages provided by Tourist

Economics.

New Domestic Percent Inbound Inbound

Route O&D Inbound Origin O&D Visitors

87,592 55% 47,933 23,967



23,967 5,992 17,975 2.022 36,345 $150 $5,451,780

Daily Spend


100% 29% 21% 12% 25% 13% 100%

$5,451,780 $1,581,016 $1,144,874 $654,214 $1,362,945 $708,731 $5,451,780

NEW DOMESTIC SERVICE SCENARIOS VISITOR IMPACT ESTIMATE

NEW SERVICE VISITOR ECONOMIC IMPACT

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Table 23



Direct Effect 20.8 $581,878 $647,229 $1,144,874

Indirect Effect 1.5 $69,198 $123,016 $212,592

Induced Effect 2.6 $112,814 $217,843 $360,863

Total 24.9 $763,889 $988,088 $1,718,330





Direct Effect 13.1 $536,973 $797,455 $1,417,462

Indirect Effect 2.4 $129,374 $195,054 $337,870

Induced Effect 2.7 $116,343 $224,692 $372,182

Total 18.2 $782,690 $1,217,201 $2,127,515





Direct Effect 15.4 $422,283 $917,122 $1,581,016

Indirect Effect 3.6 $156,805 $237,083 $420,635

Induced Effect 2.4 $97,643 $175,893 $299,668

Total 21.5 $676,732 $1,330,099 $2,301,319





Direct Effect 12.1 $495,668 $736,113 $1,308,428

Indirect Effect 2.3 $119,423 $180,050 $311,881

Induced Effect 2.5 $107,393 $207,409 $343,553

Total 16.8 $722,484 $1,123,572 $1,963,862





Direct Effect 15.8 $517,249 $900,756 $1,362,945

Indirect Effect 1.6 $78,839 $138,238 $242,735

Induced Effect 2.4 $104,623 $201,934 $334,580

Total 19.9 $700,711 $1,240,927 $1,940,260





Direct Effect 77.2 $2,554,050 $3,998,675 $6,814,725

Indirect Effect 11.5 $553,639 $873,441 $1,525,714

Induced Effect 12.6 $538,816 $1,027,771 $1,710,846

Total 101.3 $3,646,505 $5,899,887 $10,051,285



NEW SERVICE ESTIMATED VISITOR BY AIR SPENDING IMPACT

NEW SERVICE ESTIMATED VISITOR BY AIR SPENDING IMPACT

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The two possible new air service routes from Portland and San Diego are estimated to generate

a total 101.3 new FTE jobs with $3,646,505 in annual labor income. Total annual economic output

from these net-new visitors is estimated at $10.05 million.

Total annual economic impact from the two possible new services is detailed below.

Table 24

The two new possible service scenarios are estimated to generate 127.7 new FTE jobs with

$4.653 million in annual labor income. Annual total output is estimated at $12.4 million dollars.



Direct Effect 21.0 $702,945 $702,412 $1,377,112

Indirect Effect 2.5 $153,547 $241,611 $511,218

Induced Effect 2.9 $149,592 $288,876 $478,520

Total 26.4 $1,006,084 $1,232,899 $2,366,850

State & Local Tax $111,831




Direct Effect 77.2 $2,554,050 $3,998,675 $6,814,725

Indirect Effect 11.5 $553,639 $873,441 $1,525,714

Induced Effect 12.6 $538,816 $1,027,771 $1,710,846

Total 101.3 $3,646,505 $5,899,887 $10,051,285

State & Local Tax $1,544,520




Direct Effect 98.2 $3,256,995 $4,701,087 $8,191,837

Indirect Effect 14.0 $707,186 $1,115,052 $2,036,932

Induced Effect 15.5 $688,408 $1,316,647 $2,189,366

Total 127.7 $4,652,589 $7,132,786 $12,418,135



ON AIRPORT NEW SERVICE ECONOMIC IMPACT

NEW SERVICE VISITOR SPENDING ECONOMIC IMPACT

TOTAL NEW SERVICE ECONOMIC IMPACT

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The Portland service would create an estimated 66.1 new FTE jobs with $2.4 million in annual

labor income. Annual total output is estimated at $6.43 million dollars.

Table 25



Direct Effect 10.5 $351,473 $351,206 $688,556

Indirect Effect 1.3 $76,774 $120,806 $255,609

Induced Effect 1.5 $74,796 $144,438 $239,260

Total 13.2 $503,042 $616,450 $1,183,425





Direct Effect 40.3 $1,333,214 $2,087,308 $3,557,286

Indirect Effect 6.0 $289,000 $455,936 $796,423

Induced Effect 6.6 $281,262 $536,496 $893,062

Total 52.9 $1,903,476 $3,079,741 $5,246,771





Direct Effect 50.8 $1,684,687 $2,438,514 $4,245,842

Indirect Effect 7.3 $365,773 $576,742 $1,052,032

Induced Effect 8.0 $356,058 $680,934 $1,132,322

Total 66.1 $2,406,518 $3,696,191 $6,430,196



PORTLAND ON AIRPORT NEW SERVICE ECONOMIC IMPACT

PORTLAND SERVICE VISITOR SPENDING ECONOMIC IMPACT

PORTLAND TOTAL NEW SERVICE ECONOMIC IMPACT

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The San Diego service would create an estimated 61.6 new FTE jobs with $2.246 million in annual

labor income. Annual total output is estimated at $5.987 million dollars.

Table 26



Direct Effect 10.5 $351,473 $351,206 $688,556

Indirect Effect 1.3 $76,774 $120,806 $255,609

Induced Effect 1.5 $74,796 $144,438 $239,260

Total 13.2 $503,042 $616,450 $1,183,425





Direct Effect 36.9 $1,220,836 $1,911,367 $3,257,439

Indirect Effect 5.5 $264,639 $417,505 $729,291

Induced Effect 6.0 $257,554 $491,275 $817,784

Total 48.4 $1,743,029 $2,820,146 $4,804,514





Direct Effect 47.4 $1,572,308 $2,262,573 $3,945,995

Indirect Effect 6.7 $341,413 $538,310 $984,900

Induced Effect 7.5 $332,350 $635,713 $1,057,044

Total 61.6 $2,246,071 $3,436,595 $5,987,939



SAN DIEGO ON AIRPORT NEW SERVICE ECONOMIC IMPACT

SAN DIEGO SERVICE VISITOR SPENDING ECONOMIC IMPACT

SAN DIEGO TOTAL NEW SERVICE ECONOMIC IMPACT

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The SBP Airport is a significant local economic engine even excluding all airline and airline related

functions. Table 27

In 2018, the Airport averaged 221 flight operations a

day or 80,791 annual operations. About 86% of

those operations were general aviation, either local

origin flights or transient private aircraft. Air taxi

operations were 8% of the total, air carrier

operations were 6% of total and Military operations

were 1% of the annual total.

By the most recent count there were 377 aircraft

based at the Airport. About 80% are single engine,

9% are multi-engine prop, 6% are jet and 5% were

helicopters. The based aircraft count is up

significantly from 2015.

The current Airport master tenant list shows thirteen non-airline runway dependent businesses or

entities on Airport property. These can be classified as FBO, FAA, Flight Training, Charter,

Maintenance or other services. In addition, a portion of overall Airport administration or operation

is allocated to non-airline aviation support.

This section will focus on the economic activity and impact of these at-Airport entities.

NON-AIRLINE AVIATION ECONOMIC IMPACT

Percent

Air Carrier 4,596 5.7%

Air Taxi 6,381 7.9%

General Aviation 38,816 48.0%

GA Transient 30,339 37.6%

Military 659 1.0%

Total 80,791 100%

Percent

Single Engine 301 79.8%

Twin Engine 34 9.0%

Jet 23 6.1%

Helicopter 19 5.0%

Military 0 0.0%

Ultra 0 0.0%

Total 377 100.0%

SBP AVIATION ACTIVITY PROFILEAircraft Operations 2018

Based Aircraft Dec, 31, 2017

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Table 28

The thirteen non-airline aviation related entities employ an estimated 226.8 FTEs with an

estimated annual payroll of nearly $14.75 million dollars.

Table 29

These 226.8 FTE Airport jobs generate 54.6 additional FTE jobs via indirect and induced effect.

This means the on-Airport non-airline sector generates a total of 281.4 FTE jobs with annual labor

income of $18.9 million dollars. Total annual output is estimated at $28.2 million dollars.

Entity ActivitiesAirport Admin/Ops Operate Airport

Air San Luis Maintenance, Charter, Flt Instruction

ACI JET Maintenance, Charter, Fueling

Aerocademy Flight Instruction, Rental

Cuesta Aviation Maintenance

FAA Tower Air Traffic Control

Fan Air Flight Instruction

Helipro Flight Instruction

Marc Air Maintenance, Charter

Nelson Aviation Maintenance

San Luis Avionics Maintenance

Spirit of San Luis Restaurant

Stellar Exploration Aerospace

SunWest Maintenance, Charter, Flt Instruction, Rental

NON-AIRLINE TENANT LIST JANUARY 2019

Sector Full Time Part Time FTE Salary/Benefit Remarks

Airport Admin 12.8 0.0 12.8 $1,230,548 80% of Airport Administration

FBO 155.0 8.5 163.5 $10,808,900 Three firms

FAA Tower 5.0 0.0 8.0 $400,000

Maintenance 6.0 2.0 7.0 $420,000 Three firms

Flight Instruction 5.0 10.0 10.0 $690,000 Three firms

Other 18.0 15.0 25.5 $1,205,000

Total 201.8 35.5 226.8 $14,754,448

SUMMARY OF ON-AIRPORT NON-AIRLINE EMPLOYMENT

Non-Airline On-Airport Economic Impact

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Table 30

Airport Admin Full Time Labor Value


Direct Effect 12.8 $774,310 $63,949 $750,630

Indirect Effect 1.4 $76,752 $104,170 $197,179

Induced Effect 4.3 $165,758 $279,792 $483,394

Total 18.6 $1,016,821 $447,910 $1,431,203



FBO/MX/TRAINING Full Time Labor Value


Direct Effect 180.5 $11,923,533 $984,742 $11,558,887

Indirect Effect 19.9 $1,050,575 $1,425,865 $2,698,972

Induced Effect 19.7 $2,268,887 $3,829,770 $6,616,651

Total 220.1 $15,242,995 $6,240,376 $20,874,511



FAA Full Time Labor Value


Direct Effect 8.0 $640,067 -$259,106 $334,163

Indirect Effect 1.4 $98,711 $182,042 $416,246

Induced Effect 2.3 $129,994 $250,837 $415,658

Total 11.6 $868,772 $173,774 $1,166,066



Other Full Time Labor Value


Direct Effect 25.5 $1,205,313 $1,848,621 $3,020,617

Indirect Effect 2.8 $292,744 $441,492 $911,867

Induced Effect 2.8 $260,956 $504,070 $834,879

Total 31.1 $1,759,013 $2,794,183 $4,767,363





Direct Effect 226.8 $14,543,223 $2,638,206 $15,664,297

Indirect Effect 25.5 $1,518,782 $2,153,568 $4,224,265

Induced Effect 29.1 $2,825,596 $4,864,468 $8,350,582

Total 281.4 $18,887,601 $9,656,242 $28,239,143



NON-AIRLINE AIRPORT EMPLOYMENT ECONOMIC IMPACT

NON-AIRLINE AIRPORT EMPLOYMENT ECONOMIC IMPACT

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offers a few services the other does not. T Black Aviation focuses primarily on training, both flight

training and maintenance. Tampa Bay Aviation also offers flight training, but offers a wide range

In the same manner that the SBP airline service brings visitors to San Luis County, so too does

general aviation and corporate aviation. In 2018, over 69,000 aircraft operations at SBP were

classified as general aviation. While many of these flights were local in nature, some were

transient, bringing visitors to the County. The Airport has multiple Fixed Base Operators (FBO)

where general aviation aircraft arrive and depart the Airport. While precise records are not kept,

we estimate from the volume of general aviation flights, that there are 20 inbound origin visitors

to the County via SBP per day via transient flights. This suggests an estimated 7,300 annual

visitors via general aviation.

We will calculate the economic impact of these visitors in the same manner as was done with the

airline inbound visitors. The formula begins with a 25% dilution to factor to account for those that

“would have come anyway”. Then the same average daily spend and average stay metrics

Tourism Economics provided will be applied to determine total regional spending by category.

Tourism Economics survey data suggests the average San Luis Obispo County inbound visitor

stays for 2.022 nights and spends $150 per person per day. Tourism Economics data also

estimates that of the $150 average visitor spend per day, 29% is associated with lodging, 21%

with food and drink, 12% recreation, 25% for retail and 13% for local transportation. Using the

same calculation chart as was used for airline passengers it is possible to project general aviation

inbound visitor spending totals and by sector. The chart below suggests $1.66 million in annual

regional visitor spending, allocated among the five spending sectors.

Table 31

The chart on the following page shows the estimated regional economic impact of the SBP

Inbound Visitors Less 25% Net Visitors by Air Avg Stay/Days Visit Days Per Visit Day Daily Spend

7,300 1,825 5,475 2.0 11,070 $150 $1,660,568

Daily Spend

Spending Allocation % Lodging % Food & Drink % Recreation $ Retail % Transport Total

100% 29% 21% 12% 25% 13% 100%

$1,660,568 $481,565 $348,719 $199,268 $415,142 $215,874 $1,660,568

SAN LUIS OBISPO GENERAL AVIATION INBOUND VISITOR ESTIMATE

GENERAL AVIATION NET VISITORS-BY-AIR IMPACT

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general aviation visitors-by-air, broken down by the five economic sectors and then in total. Total

employment impact is 30.8 FTEs with $1.1 million in annual labor income. Total annual output is

estimated to be $3.06 million dollars.

Table 32



Direct Effect 6.3 $177,235 $197,140 $348,719

Indirect Effect 0.5 $21,077 $37,470 $64,754

Induced Effect 0.8 $34,362 $66,353 $109,916

Total 7.6 $232,674 $300,963 $523,389


Federal Tax $49,425



Direct Effect 4.0 $163,558 $242,899 $431,748

Indirect Effect 0.7 $39,406 $59,412 $102,913

Induced Effect 0.8 $35,437 $68,440 $113,364

Total 5.6 $238,401 $370,750 $648,025


Federal Tax $81,798



Direct Effect 4.7 $128,624 $279,348 $481,565

Indirect Effect 1.1 $47,762 $72,214 $128,122

Induced Effect 0.7 $29,741 $53,576 $91,276

Total 6.5 $206,127 $405,138 $700,964





Direct Effect 3.7 $150,976 $224,214 $398,536

Indirect Effect 0.7 $36,375 $54,842 $94,996

Induced Effect 0.8 $32,711 $63,175 $104,643

Total 5.1 $220,062 $342,230 $598,176


Federal Tax $49,736



Direct Effect 4.8 $157,550 $274,363 $415,142

Indirect Effect 0.5 $24,014 $42,106 $73,935

Induced Effect 0.7 $31,867 $61,507 $101,910

Total 6.0 $213,431 $377,976 $590,988


Federal Tax $52,273



Direct Effect 23.5 $777,943 $1,217,964 $2,075,710

Indirect Effect 3.5 $168,634 $266,043 $464,720

Induced Effect 3.8 $164,119 $313,051 $521,110

Total 30.8 $1,110,696 $1,797,058 $3,061,540



GENERAL AVIATION VISITOR BY AIR SPENDING IMPACT

GENERAL AVIATION VISITOR BY AIR SPENDING IMPACT

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Non-airline aviation economic activity at the Airport supports a total of 312.2 FTE jobs with an

estimated annual labor income of $20.0 million dollars. These FTE jobs are responsible for an

estimated annual economic output of $31.3 million dollars.

Table 33



Direct Effect 226.8 $14,543,223 $2,638,206 $15,664,297

Indirect Effect 25.5 $1,518,782 $2,153,568 $4,224,265

Induced Effect 29.1 $2,825,596 $4,864,468 $8,350,582

Total 281.4 $18,887,601 $9,656,242 $28,239,144





Direct Effect 23.5 $777,943 $1,217,964 $2,075,710

Indirect Effect 3.5 $168,634 $266,043 $464,720

Induced Effect 3.8 $164,119 $313,051 $521,110

Total 30.8 $1,110,696 $1,797,058 $3,061,540





Direct Effect 250.3 $15,321,166 $3,856,170 $17,740,007

Indirect Effect 29.0 $1,687,416 $2,419,611 $4,688,985

Induced Effect 32.9 $2,989,715 $5,177,519 $8,871,692

Total 312.2 $19,998,297 $11,453,300 $31,300,684



SBP ON AIRPORT NON AIRLINE ECONOMIC IMPACT

SBP GENERAL AVIATION NET VISITOR ECONOMIC IMPACT

SBP TOTAL NON AIRLINE ECONOMIC IMPACT

TOTAL NON-AIRLINE AVIATION ECONOMIC IMPACT

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Airports usually charge fees to users of their facilities. Typically, airports with scheduled airline

service charge incumbent airlines various fees and rental charges to use Airport facilities in order

to help off-set the cost of having and maintaining those facilities. Airports also collect fees and

rental charges from non-airline aviation activities such as fuel flowage fees and land, space or

building rental fees from both aviation entities and private citizens whom own an aircraft.

Table 34

The chart above shows typical sources of Airport revenue and how a fee structure is usually

structured in each area.

Landing Fees are charged to aircraft (typically only commercial aircraft) that use the Airport’s

runway. This fee is normally per 1,000 lbs. of aircraft maximum landing weight. Fuel flowage fees

are charged for each gallon of fuel pumped from the Airport storage tanks to aircraft. Terminal

space used by airlines is paid for by the airlines. Space dedicated to a specific airline is paid for

by that airline, common space in the terminal is paid for by the airlines on a pro-rate basis.

Concessions and rental car agencies pay two fees to the Airport; rental for space dedicated to

them and franchise fees or percent of sales fees on their gross sales. PFCs are paid by air service

users when they buy their ticket. Airlines collect PFCs and reimburse them to the Airport. The

Airport can only use PFCs for infrastructure related projects and not for funding operating costs.

Source Fee Structure Remarks

Landing Fee Per 1,000 lbs landing weight Paid by airlines only

Fuel Flowage Per gallon

Terminal Space Rent Per Sq Ft or per Space

Concessions Franchise Fee Percent of gross revenue

Concessions Space Per Sq Ft or per Space

Rental Car Commission Percent of gross revenue

Rental Car Space Per Sq Ft or per Space

Passenger Facility Charge PFC Fee per Enplanement Only useble for infrastructure

Ground Transportation Access Fee per pickup or dropoff Taxi/shuttle/ride share

Parking Per day Outbound Traveler

FBO/Flt School/MRO Space Per Sq Ft or per Space

SAN LUIS OBISPO AIRPORT REVENUE FROM AVIATION OPERATIONS

AIRPORT REVENUE AIRPORT REVENUE SUMMARY

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Ground transportation access fees are paid by taxi, shuttle and ride-share entities each time they

approach the airport. Parking fees are collected for each auto parked in the parking lots near the

terminal building. All the general aviation entities, FBOs, Flight Schools and Maintenance

facilities, pay lease or rental fees for the land or space they occupy on the Airport. Government

entities including the FAA Tower and the TSA pay fees for the space they occupy at the Airport.

These Airport revenue streams generate an estimated $7.3 million dollars in annual revenue for

the Airport. The chart shows approximately 92% of this revenue is associated with air service and

only 8% is associated with non-airline or general aviation entities and economic activity. Key

generators of Airport revenue are terminal parking fees, Airline terminal rental fees, Rental Car

space and franchise fees and the PFC.

Table 35

The two possible new air service scenarios would, if implemented, increase Airport airline traffic

by approximately 20%. The Airport waives all airline fees related to new service for the first two

years of service. However, the customer traffic generated by the two possible services would

increase airline traffic driven revenues by 7.5% to 10% each. This would include parking, PFCs,

ground transportation access fees and volume driven Rental Car and Concession franchise fees.

Revenue Source Airline Non Airline Total % Total

Landing Fee $474,912 $0 $474,912 6.5%

Terminal Space Rent $1,583,582 $0 $1,583,582 21.6%

Concessions Fees $20,000 $40,289 $60,289 0.8%

Rental Car Concenssion Fee $806,706 $0 $806,706 11.0%

Rental Car Space $74,017 $0 $74,017 1.0%

Government Rentals, FAA TSA LEO $72,832 $0 $72,832 1.0%

Passenger Facility Fees PFC $1,102,109 $0 $1,102,109 15.1%

Ground Transportation Access $119,981 $0 $119,981 1.6%

Parking $2,281,134 $0 $2,281,134 31.2%

Fuel Flowage $200,000 $149,026 $349,026 4.8%

FBO/MRO/Flt School Space $0 $392,189 $392,189 5.4%

Total $6,735,273 $581,504 $7,316,777 100.0%

Percent of Total; Airline vs Non Airline 92.1% 7.9% 100.0%

SBP AIRPORT REVENUE STREAMS

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The Airport is a significant contributor to the overall San Luis Obispo County economy. The

Airport’s aviation activities are responsible for an estimated 871.5 local FTEs by direct, indirect or

induced effect. This 871.5 FTEs have an estimated $40.95 million dollars in annual labor income

and generate an estimated $85.3 million dollars in annual local economic output.

Table 36

7



Direct Effect 430.4 $14,736,776 $19,582,397 $35,071,017

Indirect Effect 60 $3,111,912 $4,894,127 $9,106,061

Induced Effect 68.9 $3,102,457 $5,911,069 $9,839,085

Total 559.3 $20,951,145 $30,387,593 $54,016,163





Direct Effect 250.3 $15,321,166 $3,856,170 $17,740,007

Indirect Effect 29.0 $1,687,416 $2,419,611 $4,688,985

Induced Effect 32.9 $2,989,715 $5,177,519 $8,871,692

Total 312.2 $19,998,297 $11,453,300 $31,300,684





Direct Effect 680.7 $30,057,942 $23,438,567 $52,811,024

Indirect Effect 89.0 $4,799,328 $7,313,738 $13,795,046

Induced Effect 101.8 $6,092,172 $11,088,588 $18,710,777

Total 871.5 $40,949,442 $41,840,893 $85,316,847



SBP AIRLINE TOTAL ECONOMIC IMPACT

SBP NON AIRLINE TOTAL ECONOMIC IMPACT

TOTAL SBP AVIATION RELATED ECONOMIC IMPACT

SUMMARY

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The two potential new air service scenarios would add an estimated 127.7 new FTE jobs in the

County with estimated annual payroll of $4.66 million dollars. Estimated annual output from those

jobs would be $12.4 million dollars.

Table 37

Economic impact analysis and software inputs and outputs measure and project numbers for jobs,

labor income and economic output. There is also the intangiable economic and social value of

the Airport’s avaition economic activity to consider.

The explosion of new air service at SBP: to Seattle on new entrant Alaska, to Denver

on United Airlines and to Dallas on American Airines, has increased both service and

competition at the Airport. This translates into greater airfare price competition saving

local resident consumers money on air travel and enhancing the attractiveness of San

Luis Obispo County as a destination for visitors.

The wide range of air service enhances local quality of life, granting residents of the

region readily accessible mobility for business or leisure travel. It also improves the

local real estate market by improving access for out-of-state owners or prospective

owners of second homes in the County.

The Airport provides a very critical base for the U.S. Coast Guard and U.S. Army

Reserve. In addition to the significant economic impact of this base, it is a critical

element in preservation of our regional and national security.

The Airport provides a critical base for the County Sheriff’s Flight Unit. The helicopters

of this unit support the important day-to-day work of local law enforcement.



Direct Effect 98.2 $3,256,995 $4,701,087 $8,191,837

Indirect Effect 14.0 $707,186 $1,115,052 $2,036,932

Induced Effect 15.5 $688,408 $1,316,647 $2,189,366

Total 127.7 $4,652,589 $7,132,786 $12,418,135



SBP TOTAL NEW SERVICE ECONOMIC IMPACT

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Many of these intangible attributes defy easy conversion to economic impact numbers. However,

they do add to the already significant economic impact and economic value of the San Luis Obispo

Regional Airport as estimated in this report.

san luis obispo county regional airport: economic …

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