New Research Questions Key Economic Claims Made by the Aviation Industry

A new study just published questions many of the key claims made by the aviation industry about the contribution of aviation to the economy. The study was carried out by the respected Dutch consultancy CE Delft

A new study just published questions many of the key claims made by the aviation industry about the contribution of aviation to the economy. The study, carried out by the respected Dutch consultancy CE Delft (1), was commissioned by a number of organisations from around Europe concerned about the levels of airport expansion which are being proposed across the continent (2). The study is being launched this week in advance of a major three-day international aviation industry conference being held in London starting on Monday 28th November (3).

CE Delft assessed the methodology used in three key studies which the aviation industry has used in recent
years to make claims about its contribution of aviation to the economy (4). One of the studies assessed by
CE Delft was The Contribution of Aviation to the UK Economy, which formed the basis of the 2003 Aviation
White Paper. The Department for Transport commissioned consultants Oxford Economic Forecasting (OEF)
to carry out the study, but it was largely paid for by the aviation industry.

CE Delft identifies key flaws in the methodology which were common to all the studies they assessed:

The studies fail to carry out a full cost-benefit analysis of impact of airport expansion. The OEF study, for example, did not factor in the costs of the impact on the environment. CE Delft comments: “this makes any comparisons between investment costs and the impact on GDP nonsensical.”

The studies are wrong to imply the number of jobs which might be created by investment in the aviation industry is a reliable indicator of the industry’s contribution to the economy or its impact on Gross Domestic Product (GDP). The reason for this is that it is incorrect to assume that all these people would become unemployed if activity in the aviation sector did not grow. The economy would develop in different ways:
budgets and investment may well be spent elsewhere, leading to employment and contributions to GDP in
other areas of the economy.

The studies, in any case, over-estimate the number of jobs that expansion of aviation would create. This
is because they include direct, indirect and induced jobs that might be created. Induced jobs are those
created as a result of workers in aviation spending their money — for example, jobs in a furniture store when
aviation workers spend money on buying new furniture. But, as CE Delft makes clear, this is double
counting. If all industries made the same claims, the number of jobs created would exceed the total
John Stewart, Chair of HACAN ClearSkies, which represents residents under the Heathrow flight paths and
which was one of the organisations which sponsored the CE Delft Report, said, “This report from
independent consultants should make government ministers look very hard at the claims made by the
aviation industry. Behind the industry’s glossy literature is the stark reality: aviation is much less important
to the economy than the industry claims.”


Notes for Editors:

(1). CE Delft is based in the Netherlands. It provides advice to business and government and does work for
the European Commission.

(2). The organisations which commissioned and funded this study were Milieudefensie (Netherlands),
UECNA (European Union Against Aircraft Noise), Friends of the Earth, Transport & Environment
(Brussels-based lobbying organisation), Bundesverein gegen Fluglarm, HACAN ClearSkies, Bruxelles Air
Libre, Schipol Region Citizens Platforms, Dublin Uproar, Gatwick Area Conservation Campaign, Dutch
Society for Nature and Environment, Citizens Platform Wezernbeek.

(3). The Conference, The Future of Air Transport, is being held in the Waldorf Hilton Hotel in the Aldwych
on 28th, 29th and 30th November. It is being organised by the Institute of Economic Affairs and is expected to
be attended by over 300 senior representatives from the aviation industry from across the world.

(4). The three aviation industry studies assessed were:

Vluchten kan niet meer; Avies over de toekomst van de luchtvaart in Nederland (Nowhere to turn, nowhere
to fly. Advice on the future of aviation in the Netherlands), by the Dutch Advisory Council for Transport,
Public Works and Water Management, 2005.

Assessing the economic costs of night flight restrictions, by MPD Group Limited in association with ERM,
February 2005, commissioned by the European Commission.
The contribution of the aviation industry to the UK economy; Final report, By Oxford Economic Forecasting
(OEF), November 1999.

For further information contact

John Stewart on 0207 737 6641 or 07957385650

Press Release dated: 21st November 2005