But DFW travelers are not the only ones who profit…

International air service does not only affect DFW travelers
it benefits the entire Dallas-Fort Worth Metroplex!

According to a recent study, the impact generated from international service at the Airport is a valuable contributor to the local economy. In fact, current international service at DFW contributes approximately $2.3 billion in direct and downstream expenditures to the Metroplex economy. Furthermore, international service expected to be added by 2005 is projected to generate between $2.2 and $4.7 billion in additional economic impact!

How Economic Impact is Determined
SH&E evaluated the economic benefits of international air service to the Dallas-Fort Worth Metroplex area based on the following six factors:

Primary Impacts

• Foreign Visitor Expenditures – This amount is based on the number of foreign visitors traveling on direct international flights, and the estimated average spending per visitor while in the local area. It includes expenditures by foreign visitors on lodging, meals, entertainment, retail purchases, and ground transportation.
  
  The amount of expenditures varies by the visitors’ country of origin. Daily spending habits and the length of the stay vary significantly from country to country, contributing to the variations. In addition, more foreign visitors travel on foreign flag carriers than on U.S. carriers. As a result, foreign air carriers are likely to generate a more significant visitor expenditure impact than a U.S. carrier.
  
  
• Air Carrier Expenditures – This amount is an estimate of the expenditures each air carrier incurs while in the DFW region, on- and off-airport. It includes airport fees and rentals, fuel/oil purchases, employee compensation, and other operational expenses. Spending amounts differ depending on the nationality (flag) of the carrier because of the home of the flight crew.

Travel Agent Revenues – This amount is based on estimated commission levels and travel agent utilization for the Dallas-Fort Worth Metroplex area. Approximately 70 percent of DFW originating passengers will book their travel through local travel agents with an average commission estimated at 9.5 percent. Flights operated by U.S. carriers tend to have a more significant impact on local travel agent revenues because they carry a higher share of U.S. travelers.

Passenger Time-Savings Benefits From Direct Air Service Routes – This factor is based on estimated passenger time savings from less circuitous routings, with time values based on guidance furnished by the U.S. Department of Transportation and endorsed by the Federal Aviation Administration (FAA). The idea behind this factor is that if direct international services currently operating form DFW were not available, local residents would spend valuable extra time reaching their destinations by connecting through other airports.

Growth of Exports (not including foreign direct investment) – This amount is a estimated using an econometric model that explains the relationship between local exports and their primary economic drivers. It includes DFW Metroplex income growth, foreign exchange rate fluctuations, changes in foreign demand for U.S.-produced goods, and changes in available nonstop seats to international destinations.

Induced Impact

Subsequent Downstream Rounds of Spending – This amount includes the additional downstreams that occur throughout the local economy following the direct on- and off-airport expenditures by airlines and passengers, such as visitor expenditures, air carrier expenditures and travel agency revenues.
For each direct expenditure item, SH&E calculated the resulting indirect expenditure amounts by applying multipliers specific to the spending category. Over $1 billion of the existing economic impact results from induced spending.

How DFW Adds Up
DFW Airport currently generates an astonishing $2.3 billion in annual local economic impact as a result of international passenger service; air cargo service accounts for an additional $34 million. Services added over the past three years alone are estimated to have contributed over $930 million to the local economy each year.

Passenger flights to and from Europe represent the largest portion of the estimated economic impact, accounting for about one-third of the amount but only about one-fifth of the available international seats. A new Asian flight can potentially generate $300 million, while a new European flight has an estimated potential impact of up to $170 million. The most significant cargo flight is Lufthansa’s nonstop Frankfurt services, producing an estimated $7.9 million annually.

How Is This Information Useful to DFW?
The purpose of the study was to determine the value of current and likely future international air services to DFW Airport. By doing so, DFW is able to understand the value of additional services that could be made possible by infrastructure improvements. The Airport can decide what improvements are favorable based on this information. Because of the study, DFW also is able to focus its marketing efforts on international destinations that would show proven benefits to the Metroplex.

As a result, the entire Dallas-Fort Worth Metroplex wins.