Jin Murakami a, Yurika Matsui b, Hironori Kato b
, Hironori Kato baDepartment of Architecture and Civil Engineering, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong KongbDepartment of Civil Engineering, The University of Tokyo, 7-3-1, Hongo, Bunkyo-ku, Tokyo, 113-8656 Japan
Highlights
• We examine the relationship between airport rail links and metropolitan productivity.
• Cities with airport rail links are more productive than those without airport rail links.
• Cities with shorter access time enabled by airport rail links are more productive.
• Airport rail links should be discussed as a catalyst for wider economic development.
Abstract
This article examines the relationship between airport rail links and economic productivity in 82 cities with the world’s 100 busiest airports across 10 regions. Our multilevel models for gross metropolitan product per capita reveal that cities with airport rail links or shorter access time enhanced by rail have higher productivity than those without airport rail links or with longer access time by other modes. This macro-geographic snapshot could justify greater investment in airport rail link infrastructure and dedicated express services for the wider economic benefits derived from airport-connected accessibility premiums and agglomeration economies in central business districts.
Introduction
International liberalization of the aviation industry, such as the promotion of open skies agreements and the growth of low-cost carriers, has resulted in an increasing flow of air passenger traffic worldwide over the decades, from 1.146 million in 1992 to 2.878 million in 2012 (ICAO, 2013), as well as a reconfiguration of the geography of air transportation and economic development in both regional and local contexts of especially large cities with international hub-airports (Bel and Fageda, 2008, Button et al., 1999, Button and Lall, 1999, Button and Taylor, 2000; Kasarda and Lindsay, 2011). While a strong correlation or dynamic interactions between air traffic, airport capacity, and economic growth have been presented by a series of empirical studies across the American and European regions (Baker et al., 2015, Bilotkach, 2015, Blumenthal et al., 2009, Brueckner, 2003, Chi and Baek, 2013, Debbage and Delk, 2001, Florida et al., 2015, Green, 2007, Hakfoort et al., 2001, Irwin and Kasarda, 1991, Marazzo et al., 2010, Mukkala and Tervo, 2013, Neal, 2012, Percoco, 2010, Sheard, 2014, Tittle et al., 2013), the economic importance of ground transportation infrastructure and services between airports and cities is still understudied worldwide. While the literature has seen international hub-airports as key node facilities to promote more frequent face-to-face meetings and knowledge spillovers across cities and beyond regions, it has not well addressed the fact that the process of moving from the door of origin to the door of destination could also importantly determine the productivity of intercity journeys and related economic interactions within cities.
In reality, “first-mile” and “last-mile” ground transportation between airport terminals and cities are sometimes more burdensome for travelers in terms of out-of-pocket expenses, travel times, and baggage handling works than line-haul air transportation between airports, particularly “short-haul” and “medium-haul” services. This issue has become even more critical for airport managers as well as local policymakers since the introduction of open skies agreements and the emergence of various low-cost carriers increased passengers’ willingness to accept much longer-distance ground access travel for more direct and cheaper airline tickets that provide geographically nonstop and flexible airline services in a time-sensitive manner (Coogan, 2008). In local practice, growing traffic to and from large airport terminals, due not only to increasing regional air passengers but also local airport employees, is of major concern for urban mobility and environmental sustainability (Gosling, 1997, Humphreys and Ison, 2005). Thus, improving both quantity and quality of airport ground access by public transit is one of the key prerequisites for the approval of airport capacity expansion and terminal modernization projects in environmentally progressive cities and regions. In the UK and US contexts, the higher proportion of journeys to and from the airport by public transit is commonly targeted to reduce excessive provision of car parking lots and usage of private vehicles, which could in turn ease the growth of traffic congestion, air pollution, and carbon footprint, around airport terminals and along ground transportation corridors (Berry et al., 2008, Coogan et al., 2008, Humphreys et al., 2005, Ison et al., 2014).
Technology and service coordination for the promotion of airport ground access by public transit varies by target geography and market segmentation for both regional air passengers and local airport employees. For example, investments in airport rail links, especially dedicated express lines with faster and more reliable travel services, are favored over expenditures on private cars (including parking and personalized taxi services) and other public transit modes (e.g., scheduled airport bus and shared van services) to capture time-sensitive, business-related passengers, who have trip origins and destinations in distantly and densely clustered downtowns (Coogan, 2008). On the other hand, “softer options” (e.g., transit fare subsidies and car sharing schemes) are widely and flexibly arranged to alter the car-dependent travel behavior of local airport employees, who have a broader range of daily commuter-sheds over the suburban locations served by hub-airports (Coogan et al., 2008, Gosling, 1997, Humphreys et al., 2005, Ison et al., 2014).
Nevertheless, environmental motives may not guarantee sufficient returns on multibillion-dollar investments in public transit infrastructure and services, particularly airport rail links (Altshuler and Luberoff, 2003, Flyvbjerg et al., 2002). Notably, urban rails worldwide tend to raise the issue of cost overruns and demand shortfalls from the power of context, such as globalism and environmentalism (Dimitriou, 2006, Flyvbjerg, 2007). This evaluation bias could be even worse for airport rail link projects that inherently require greater expenses but attain fewer intercity passengers than general urban rails that are projected for daily intra-city commuters do (de Neufville, 2006). For instance, the net capital and operating costs per passenger mile for Portland Airport Max and San Francisco BART SFO Extension projects are about 2.86 times and 2.98 times those for Portland Max Segment I and San Francisco Initial BART lines, respectively, in 2008 dollars (Guerra and Cervero, 2011). However, the ground transportation market share by rail ranges up to 13% across 27 US airports, of which Portland Max and San Francisco BART capture about 7% and 6% market shares, respectively (Coogan, 2008). In spite of relatively weak patronage, why do policymakers worldwide promote huge investments in airport rail links?
One rationale for investing in airport rail links can be that it leads to greater economic development. While traditional economic analysis on public transit investment tends to evaluate direct benefits to travelers strictly (e.g., travel time savings), assessing its economic development impacts covers a wider range of indirect benefits affecting non-travelers, such as job creations and wage increases in the construction and associated industries, savings in household and firm expenditures, and improved access to economic opportunities and social services (Banister and Berechman, 2000, Cervero et al., 1998, Weisbrod and Reno, 2009). In particular, scholarly and practical attentions have recently been given to the wider economic impact on business or regional productivity increased by enhancing a large scale of consumer markets, sharing diverse and specialized labor skills, and facilitating knowledge spillovers through the relocation of firms and households or “agglomeration economies” associated with changes in transportation cost and accessibility (Chatman and Noland, 2014, Graham, 2007, UK Department for Transport, 2014). Certainly, some suggest that the presence of public transit is likely to increase the number of knowledge- and service-based employees in the central business district (CBD) on its metropolitan-wide network, the agglomeration economies enhanced by public transit investment could make an upward shift in the production function of the metropolitan area, and the benefit-cost evaluations considering that economic development impacts tend to support capital-intensive transit projects, particularly in large cities with well-developed transportation systems (Berechman and Paaswell, 2005, Berechman et al., 2006, Cervero and Landis, 1997, Chatman and Noland, 2014, Shefer and Aviram, 2005). However, most of our knowledge on such wider economic benefits is drawn from empirical studies on the impacts of general transit infrastructure and services in North America or Europe. Very little research has been conducted to figure out the relationship between airport rail links and economic productivity in a cross-regional way.
The concept of a new economic development strategy increasing business and regional productivity beyond airport properties and along airport-linked ground transportation corridors has been acknowledged as the “Aerotropolis” model across North American, European, and growing Asian markets (Kasarda, 2006, Kasarda and Appold, 2014). Presumably, major cities with the world’s busiest hub-airports could offer competitive advantages to multinational corporate headquarters as well as local business entities in the international finance and management, advanced producer service, high-tech manufacturing, trade, logistics, hotel, leisure and tourism, and medical service sectors by enabling them to reduce transportation/communication times and costs in the region’s core business clusters, expand regional market sheds to and from a wider range of distant suppliers, consumers, and partners, and generate more time-sensitive face-to-face meetings and value-added business transactions in the new international division of labor (Bel and Fageda, 2008, Appold and Kasarda, 2013, Bieger and Wittmer, 2006; Kasarda and Lindsay, 2011). As competitive firms and workers in regional and local production systems are increasingly attracted to cities with world-class hub-airports, a wide array of emerging airport-linked business clusters are expected to shape a new metropolitan form, generally stretching up to 30 km outward from the airports, embodying greater economies of scale and scope in the long run. The degree of such aviation-oriented agglomeration economies (or productivity gains), hence, depends not merely on the regional connectivity enabled by the development of multiple hub-airport systems but also on local accessibility enhanced by the integration of ground transportation infrastructure and services with appropriate land use controls (Kasarda and Appold, 2014). More precisely, multibillion-dollar investments in airport rail links (especially airport express lines) for faster and more exclusive travel services than parallel road systems between hub-airport and in-city terminals are assumed to have substantial impacts on the size, distribution, and composition of metropolitan employment along the airport corridors extended to and from CBD, which could lead to increases in the metropolis’ overall productivity through the densification, relocation, and diversification of aviation-oriented business clusters capturing higher accessibility premiums and producing greater competitive advantages within CBD, as opposed to the upsurge of “Airport City” – planned mix-use development of near-airport site (Appold, 2015, Appold and Kasarda, 2013, Cidell, 2014, Freestone and Baker, 2011).
From the normative perspectives and empirical findings, this article examines, by controlling for other demographic, geographic, industrial, and airport-related attributes, whether airport ground access attributes can significantly explain metropolitan-wide economic productivity in 82 cities with the world’s 100 busiest airports across 10 regions, covering emerging megacities with and without airport rail links in Asia and the Middle East (Fig. 1). This empirical work is certainly cross-sectional due to the unavailability and inconsistency of collecting worldwide data on various attributes over multiple years. We nevertheless trust that our macro-geographic work with a global scope and some analytical effort to mitigate (but not solve) the latent issue of endogeneity is an essential step toward conducting a variety of international case studies on micro-geographic transformations of major cities with the world’s busiest airports in the forthcoming years, which would further stress the importance of integrated hub-airport management, ground transportation investment, and land use coordination in aviation-oriented economic development strategies for balancing competitiveness and sustainability (Charles et al., 2007; Freestone, 2009, Kasarda and Appold, 2014).
This article proceeds as follows. The next section presents our worldwide case selection, data collection, and data description. The data organization section is followed by model specification and regression results. From the empirical findings, key issues and challenges for future research are drawn as concluding remarks.
Case selection
To begin with, our research identified the world’s 100 busiest airports in terms of total terminal passengers (excluding direct transit passengers from total passengers) in the ACI Annual World Airport Traffic Report for Year 2012 (Airport Council International, 2013), because such major hub-airports usually have significant influences on metropolitan-wide economic productivity and large investments in ground transportation systems (especially airport rail links) are economically more
Model specification
Our empirical strategy relies on a series of business and regional productivity functions generally accepted in the aforementioned literature on air transportation, public transit investment, economic development, and agglomeration economies. The growing body of research has concluded, typically by controlling for demographic, geographic, industrial, infrastructure, and/or other region-specific factors in the firm-level or metropolitan-wide productivity functions, that higher transit
Results
The results of our multivariate regressions for GMP per capita across 82 cities were obtained through the process of testing various combinations of candidate variables and their interaction terms in the multilevel formulas as specified in the previous section, based on model fitness, significance of each predictor, collinearity, intra-regional correlation, and consistency of coefficients. This section presents the estimates of the “airport rail link” and “airport access time” models
Conclusions
Worldwide demand for air passenger travel continues to grow at a fast pace. However, such market dynamism will appear different at various stages of a region’s economic development for the next decades. Obviously, emerging economies outpace established markets in growth. According to a recent forecast, Asia Pacific (including Mainland China) is expected to become the largest air travel market with approximately 48% of global traffic in 2033, followed by the Middle East, which is well located to
Acknowledgment
We deeply thank Ms. Alicja Mięsikowska for her kind support in collecting data from 100 airports worldwide during her internship program at the Department of Civil Engineering, University of Tokyo. We also acknowledge anonymous referees for their valuable suggestions.
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