GENERAL AVIATION IN NEW JERSEY Economic Benefits of Business Aircraft to New Jersey According to the National Business Aircraft Association (NBAA), of the $48.9 billion economic impact nationally, approximately $1.7 billion is generated in New Jersey alone. However, the NBAA President testified that the figure of $1.7 billion "is the tip of the iceberg" and "does not factor in the importance of general aviation to our State. Those numbers do not take into consideration the fact that AT&T has its headquarters in Northern New Jersey, perhaps in part because they have access to the excellent services that their general aviation airplanes can provide out of Morristown."29 New Jersey general aviation airports provide a home base for business aircraft of many major companies. AlliedSignal, BASF, Schering-Plough, Union Camp, American Home Products and Warner Lambert maintain flight departments at Morristown Airport. Hoffman-LaRoche, Barnes & Noble, Becton-Dickinson, Colgate-Palmolive, Metromedia, Loews Corporation, Philip Morris and Sony Aviation maintain flight departments at Teterboro Airport. Ronson Aviation, Unisys Corporation, Amerada Hess, Dow Jones, Johnson & Johnson, Pfizer Inc. and Merck have flight departments at Trenton-Mercer Airport. Businesses tend to locate their headquarters or plants near airports. When a business purchases an aircraft, the investment is justified only if it can base the aircraft at an airport with facilities enabling it to use that aircraft year round, regardless of weather. Thus, the threat posed to New Jersey is that a declining aviation support system could lead to businesses deciding to relocate to states that provide a more stable general aviation system and infrastructure. This is a fact that competitor states are exploiting. Several sister states are vigorously developing their airport systems to attract major companies from New Jersey to relocate within their own borders. Economic Impact of General Aviation Airports in New Jersey Coinciding with the Commission's study, the New Jersey Division of Aeronautics commissioned the Airport Technology and Planning Groups, Inc. (AirTech) to study and assess the economic impact of general aviation airports in New Jersey. AirTech determined that the economic impact of general aviation airports to the State is $1.3 billion. 30 According to AirTech's report, Economic Impact of New Jersey's General Aviation Airports, "Over 70,500 total jobs in the State of New Jersey are related to the daily operations of the State's general aviation system."31 The report also analyzed secondary impacts32 on each of the nine sectors in the statewide economy. General aviation increased construction activity by $100 million of output and 1,096 jobs; manufacturing was increased by $103 million of output and 500 jobs; and Finance/Insurance/Real Estate was increased by $70 million in output and 370 jobs. The two major air carrier airports in New Jersey, Newark and Atlantic City International, were excluded from this study. 4.7 percent of Newark's operations include general aviation, and the economic impact of Newark and Atlantic City is $8.6 billion.33 If the impact of general aviation on Newark and Atlantic City had been included, total economic impact approximates the NBAA estimate of $1.7 billion set forth above. For consistency, the economic impact attributable to the airline operation at Trenton-Mercer airport was also excluded. In computing the secondary impacts, AirTech used IMPLAN multipliers, which are generally accepted as both conservative and reliable. In a survey of 5,000 non-aviation businesses throughout the State, 54 percent of the respondents indicated that their company, owns, leases, or charters general aviation aircraft. Over 42 percent of the respondents indicated that they have customers or suppliers who travel by general aviation to visit the surveyed company.34 Likewise, 42 percent of respondents indicated that a general aviation airport was "Essential" or "Important" in their decision on where to locate.35 Operations at New Jersey's General Aviation Facilities There are more than 4,200 general aviation aircraft based in New Jersey, with over 2.3 million annual general aviation aircraft operations recorded.36 Approximately 766,000 of those operations are transient, involving a travel length exceeding 150 miles.37 With each takeoff and each landing considered an "operation," there are 383,000 transient flights to New Jersey.38 Each transient flight carries an average of 3.6 persons with business as the main purpose; 2.3 persons for personal and pleasure flights; and approximately 5.5 persons per aircraft at the larger corporate airports.39 The average visitor remains in the vicinity of the airport 1.5 days. While a pleasure traveler spends an average of $85 per day, a business visitor typically spends $175 per day.40 In 1994, the State's general aviation airports accommodated 842,400 visitors, representing 1,263,600 visitor days.41 As of 1997, 201 of the 11,798 turbine business aircraft (6,335 jets and 5,463 turboprops) in the U.S. were located in New Jersey.42 This means New Jersey attracts less than two percent of the nation's fleet of heavy-duty business aircraft. New Jersey's business fleet includes a greater percentage of jets as compared to turboprops.43 The majority of New Jersey's business fleet is located at Teterboro and Morristown Airports. Teterboro is widely regarded as a leading corporate airport, ranking eighth nationwide in the number of general aviation operations, while Morristown Airport ranks eleventh in general aviation operations, and Essex County Airport ranks 16th.44 The Impact of General Aviation Airports on Northern New Jersey and the New York Metropolitan Area The manager of Newark International Airport provided testimony regarding the vital role general aviation facilities and Newark International, John F. Kennedy International and La Guardia Airports play in the bi-state region's economic picture. In addition to the important role of general aviation facilities within the State, the Port Authority recognizes the significant impact general aviation has on air carrier operations at the region's major airports. The region's major airport facilities accommodated over 1.1 million aircraft operations, 77 million passengers, supported over 222,000 jobs, and generated $25 billion in direct economic activity in 1996. However, the Port Authority is consistently faced with the problem of demand exceeding capacity. The necessary response is to increase capacity by expanding the physical airfield at these facilities. Unfortunately, the Port Authority reported that any growth at the bi-state region's airports is hampered by both spatial and environmental constraints - real estate is limited and sensitivities to airline aircraft noise mitigate against building either new airports or new runways at existing airports.45 As a positive result of the current availability of New Jersey's general aviation airports to serve as relievers for Newark, less than five percent of the operations at Newark involve general aviation. This allows the larger airports to use their resources in the most economical way. However, the Port Authority stated that any continued loss of general aviation facilities in the region would result in more operations at Newark, and likely cause staggering delays. In 1996, Newark International Airport had the worst record of any airport in the nation for delays in scheduled airline service. That year, 28,454 flights arrived late due to congestion at Newark. In fact, with the exception of one year, Newark International Airport has been the worst airport in this category in the nation since 1991, with an average of six to nine percent of its total flights delayed. La Guardia (with 4.5 percent of its flights delayed) is ranked third in the nation for delays and JFK is ranked sixth (with 3.3 percent). The longest delays occur during bad weather when the system can process only 38 aircraft per hour at Newark (compared to the 60 per hour during good weather). The delays at Newark inconvenienced approximately four million passengers in 1996. Delay minutes cost the airlines more than a billion dollars annually.46 The Port Authority recognizes that efforts must be focused on maximizing the use and the continued improvement of existing general aviation facilities in the area since general aviation traffic, and the airports that accommodate it, are important contributors to the economy, safety and security of the bi-state region.47 Benefits of New Jersey's Airports Compared to Other States The Airport and Technology Planning Group, Inc. (AirTech), has concluded, as a result of general aviation studies done in 20 different states, that the ratio of economic benefit derived by the New Jersey general aviation system far exceeds that of most other states.48 The studies conclude that New Jersey has some of the most economically beneficial general aviation airports in the country. For example, Pennsylvania has 150 airports in their general aviation system with approximately 6,000 jobs related to the industry, compared to the 16,000 jobs generated from only 28 general aviation airports in New Jersey.49 This means that every airport New Jersey can maintain or add to its general aviation system contributes at least 571 jobs in the State. New Jersey has a unique business use for its general aviation airports as compared to other states, according to AirTech. Approximately 43 percent of all New Jersey's business activity is intrastate, from one airport to another, while 57 percent provides service to destinations outside the State. The inference is that general aviation is serving as an alternative mode of transportation in a state that faces a lot of highway congestion.50 With aviation, two miles of asphalt allows people to travel from Cape May to Teterboro. Importance of Airports in Corporate Location Decisions The presence of a suitable general aviation airport is an important consideration for corporate CEOs in their decisions to locate or relocate companies, according to the NBAA. Air transportation has become so important to some companies that they locate their business operations on an airport to create an immediate interface between their operations department and their aviation department. Locating on or near a general aviation airport allows companies to more effectively promote their products and services by providing immediate access to their in-state or out-of-state facilities for potential clients. Many companies participating in this type of sales practice have determined that the flight department more than pays for itself from the increased business that results from this service.51 Companies such as MetPath and the Federal Reserve Bank, located near Teterboro Airport, and Inductotherm, in Rancocas, which has installed its own runway near its factory, are examples of such companies. The airport facility itself is another factor involved in corporate relocation decisions. One company, discussed by Mr. Olcott of NBAA, relocated from New York City, with its aircraft at Westchester Airport, to Allentown, Pennsylvania. The congestion at Westchester Airport was one of the reasons cited for relocation. New Jersey was originally considered as a potential home for this company, however, the State does not house an airport suitable for the company's business aircraft. Pennsylvania apparently presented the most suitable airport for its business aircraft. Thus the aircraft, the company and its jobs all moved to Pennsylvania.52 Social Benefits of General Aviation Airports in New Jersey The Commission has concluded that a community that has a general aviation airport benefits far more from it than does the actual airport owner. New Jersey's airports provide benefits to communities without providing any economic reward to airport owners. In the study of economics, these benefits are recognized as "public benefits" or "public good," for which a charge or fee is nearly impossible to collect. Consider the example of a marching band parading down a public street. People have a right to use the public sidewalk for free. All who do, receive the benefit of the band's entertaining music. Shopkeepers along the street do more business since the band attracts an audience. The people in the audience enjoy uplifted spirits and the families of the shopkeepers enjoy more purchasing power. This purchasing power, in part, is expended again with the shopkeepers. However, the bandleader can neither charge nor collect any income for the great benefit she has provided. A general aviation airport provides public benefits of a very similar nature. It contributes to the quality of life and it improves the local economy for both its host and its neighboring communities. While not generally aware of the benefits general aviation airports bring to the community, the public would certainly notice their absence. The Commission heard extensive testimony indicating that general aviation airports facilitate many community-related activities and services, including educational opportunities, preservation of open space, woodlands, wetlands and help facilitate medical and fire emergency services. Below are some leading examples of how communities benefit from general aviation airports. Preservation of Open Space General aviation airfields give municipalities the opportunity to preserve open space, a problem becoming increasingly more pressing with the growth of the State. During the Commission's hearings, not one municipality indicated that it would prefer its airport to be a residential or commercial development. In the more rural municipalities, this benefit may not be appreciated fully since the areas surrounding the airports are typically farmland. However, the densely populated municipalities hosting an airport were unanimous in the desire to avoid another housing development. The Hopewell Township Mayor testified that new houses in his community would need to have assessments in the $400,000 to $500,000 range in order for the Township to break even on the municipal services: sewers, schools, roads, fire and police protection, etc.53 According to the Readington Township Administrator, new homes on average add up to an annual $20,000 loss to the municipality.54 Citing similar examples, the Mayor of Montgomery Township wants to make sure that their airport remains an airport.55 In Alexandria Township, the Deputy Mayor provided similar testimony, stating that every new house developed in Alexandria amounts to a loss for the municipality, while noting that their airport provides the welcomed open space for the community and wildlife.56 Benefits to New Jersey Travel and Tourism Tourism and travel related services are New Jersey's second largest industry, creating 623,000 jobs and a total economic impact of $12.9 billion.57 Three privately owned public use New Jersey airports currently serve as the locations for two balloon festivals and an air show. These serve to enhance the economic development of their surrounding communities. In 1997 there were 8,147,000 trips to New Jersey for special events such as these58 Benefits of General Aviation in Education and Social Work The Commission received testimony from Mr. Jerry Iacona, of the New Jersey Aviation Education Council ("Education Council"). As an elementary school teacher for twenty-five years, Mr. Iacona addressed the specific educational benefits he has had the opportunity to witness through the use of New Jersey's general aviation system. The Education Council uses the study of aviation as a means to energize children's interest in general learning. Using the State's general aviation facilities to promote learning is an integral part of any educational program. It is the Education Council's experience that most children only have the chance to observe airplanes from the ground, but if they are given the opportunity to sit in a cockpit, the knowledge that they have acquired is actually put to use through hands-on experience. By having general aviation facilities throughout New Jersey, aviation as a field of study for children is readily available for schools to provide field trips to these facilities and capture the interest of New Jersey's youth. These field trips allow children to put the paper knowledge to use and learn about the subject as a first hand experience. The Education Council has incorporated the study of aviation in school programs at all levels. While the attraction of flying through the air is a common interest for many young children, this interest can be introduced at the elementary educational level and developed through the study of aerospace technology in higher levels of education. Programs have already been devised and implemented with this particular idea, such as the program at Chatham High School, SOAR and Adopt-A-School.59 The Commission also had the opportunity to receive testimony from Reverend Russell White, founder of Eagle Flight. Similar to the mission of the Education Council, the Eagle Flight program was created to encourage inner-city youths in East Orange and Newark to develop trade, educational and manual skills, as well as to help build character in its students through the use of general aviation. Reverend White (he encourages his children to call him "The Rev") holds aviation out to his children as an incentive to stay in his program. All children in the program are required to abstain from all drugs and alcohol, to finish high school, to spend part of their free time working on the squadron's facilities (including washing the squadron's aircraft) and drilling for march competitions. A recent survey of former Eagle Flight students revealed that 96 percent of Eagle Flight students completed their high school education, with 32 percent fulfilling the necessary requirements for a bachelor's degree in post secondary institutions. All of the students who had completed high school enrolled in college or received additional training in the military or vocational/technical studies.60 Furthermore, "by requiring scholastic proficiency to be active in the squadron, Rev. White's former cadets have had amazing success in the field of aviation. More than 2,000 students have passed through the program in 23 years. Approximately 19 have gone to the Air Force Academy, 37 have become commercial pilots, 190 attended aviation schools and 259 are working in aviation related positions."61 The leaders of the Educational Council and Eagle Flight Squadron Incorporated have experienced the excitement that general aviation has brought to the traditional academic setting. This type of encouragement is essential to assist in the development of a student's interest in learning and teach him or her how to succeed. The New Jersey's general aviation facilities assist in this process. The location of the current system of airports in the State allows the entire State to benefit through these programs. If there is an airport in close proximity to schools participating in these programs, the possibility of using aeronautics to educate New Jersey's youth is limitless. The loss or elimination of any additional airports within the State would certainly jeopardize the educational opportunities and exposure that these airport facilities provide to New Jersey's children. Benefits to State Infrastructure General aviation airports support news, traffic and weather reporting in communities throughout the State. Many communities have developed integrated, computerized mapping of census, demographic and infrastructure data through the use of Geographic Information Systems (GIS), which requires aerial photography through general aviation.62 Benefits to Law Enforcement and Emergency/Rescue Services Local, State and federal law enforcement agencies use many of New Jersey's general aviation airports for traffic surveillance, drug enforcement and prisoner transport. New Jersey's general aviation airports are also routinely used by the Civil Air Patrol, an aeronautical cadet program for young adults ages 13-21, which is an official auxiliary of the United States Air Force. The cadets participate in search and rescue efforts, communications, damage assessment, dike construction and disaster relief missions for other agencies such as Federal Emergency Management Agency and the Red Cross.63 Benefits to Aerial Fire Suppression General aviation airports also serve a valuable role in New Jersey's Aerial Fire Suppression Systems, which is one of the most cost-effective in the nation. To fight fires in northern New Jersey, a standard mission would originate from Andover Airport, proceed to the fire and then refill at the closest participating airport. Typically, local volunteer fire departments supply water to the aircraft using tankers and pumpers. The availability of local fire fighters and equipment determines how quickly a second drop can be made. Further collaborations between municipalities and general aviation airports could result in more sophisticated emergency plans that could be implemented in the event of brush or industrial fires.64 Aerial Fire Suppression has played a key role in efforts to control several difficult fires in the State. During the Summer of 1994, two planes operating out of Somerset Airport assisted in the efforts to battle a forest fire by dropping 275 gallons of water every eight minutes.65 The planes, Ag-Cat type aircraft, can cruise at 120 mph and cost about $112.00 per load to operate or approximately $.41 per gallon of water dropped. Fire Chief Jack Reeves of the Union Hook & Ladder Company in Far Hills praised the effectiveness of aircraft flying out of Somerset Airport, aircraft that helped save condominiums threatened by the brush fire.66 The United State Forest Service has also recognized the importance of aerial fire fighting, and bases several aircraft in the sensitive Pine Barrens' region.67 Benefits to Emergency Medical Transport Physicians, hospitals and medical centers throughout the State utilize the general aviation system. Patients and accident victims, medical supplies and equipment, and human organs are routinely transported through New Jersey's general aviation system.68 In addition, there are opportunities where general aviation airports and communities are able to work together to develop a more efficient coordination of their combined services with the potential to dramatically improve the response time in medical emergen cies. This is possible by co-locating emergency medical units, fire stations and police stations on airport facilities. Recreational Benefits of General Aviation The recreational benefits of general aviation are important to the citizens of our State and cannot be underestimated. New Jersey is home to more than 7,000 licensed pilots who engage in an activity that is the stuff of humankind's most ancient dreams and desires. It runs as a common thread through all cultural traditions. Yet even Leonardo di Vinci, who designed airfoils in the Renaissance and understood the principles of flight through the air, could not realize that dream. Today, the ancient dream is a daily reality at our general aviation airports. For our citizens who are pilots, or for those who desire to become pilots, general aviation airports are an indispensable element of their quality of life in New Jersey. Footnotes: 29 NJGASC, 11/28/95, page 11. 30 The Airtech estimate of $1.3 billion dollar total economic impact differs from NBAA's $1.7 billion in that it did not include general aviation figures for Newark International or Atlantic City International. 31 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 3. 32 See generally Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 11, for a definition of this term. 33 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 3. 34 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 50. 35 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 51. 36 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 27. 37 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 15. 38 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, pages 15-16. 39 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 15. 40 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 16. 41 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 27. 42 Exhibit 11C, 1998 NBAA Business Aviation Fact Book, page 20. 43 Exhibit 11B, 1997 NBAA Business Aviation Fact Book, page 18. 44 Exhibit 11C, 1997 NBAA Business Aviation Fact Book, page 26. 45 NJGASC, 3/27/96, pages 214-216. 46 "Newark No. 1 As Airport With Most Delays" The Sunday Star Ledger 1997. 47 NJGASC, 3/27/96, pages 214-216. 48 NJGASC, 3/26/96, page 66. 49 NJGASC, 3/26/96, pages 76-77. 50 NJGASC, 3/26/96, page 64. 51 NJGASC, 11/28/95, page 20. 52 NJGASC, 11/28/95, page 12. 53 NJGASC, 5/28/96, page 127. 54 NJGASC, 3/27/96, page 175. 55 NJGASC, 3/27/96, page 68. 56 NJGASC, 3/27/96, pages 141-142. 57 Exhibit 197, Longwoods Study, "New Jersey 1997 Travel Year, Governor's Conference on Tourism, March, 1998. 58 Exhibit 197, Longwoods Study, "New Jersey 1997 Travel Year, Governor's Conference on Tourism, March, 1998. 59 NJGASC, 1/20/96, page 91. 60 NJGASC, 5/28/96, page 33. 61 Propwash, Aviation Hall of Fame Museum of New Jersey, 1998. 62 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 47. 63 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 47. 64 NJGASC, 11/28/95, page 35. 65 NJGASC, 11/28/95, page 38. 66 NJGASC, 11/28/95, page 39. 67 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 165. 68 Exhibit 26, Economic Impact of New Jersey's General Aviation Airports, page 48.