As Southwest arrives in Wichita, something else happens

Airplane

Wichita officials are proud that Southwest Airlines is starting service in Wichita soon. Great economic benefit is anticipated. But at the same time Southwest arrives, AirTran Airways leaves.

It’s true that Southwest is adding five new flights, as Wichita officials are quick to remind. (City officials are equally diligent at overlooking the end of the AirTran flights.) But it’s unknown what impact the loss of the Atlanta AirTran flights will have on Wichita travelers.

In 2012, 73,980 passengers enplaned AirTran jets in Wichita. In total, there were 147,101 AirTran passengers in Wichita, out of 1,509,206 total passengers in Wichita. This means that the routes that 9.7 percent of Wichita passengers used will no longer be available after June 2.

Whatever the impact, it’s difficult to see Southwest producing the touted economic benefits. The city has a report prepared by Wichita State University Center for Economic Development and Business Research that forecasts traffic increases of around 35 percent and the creation of 7,000 jobs.

That’s a lot, and it would be great if it happened. But we have to remember that at the same time Southwest arrives, AirTran leaves. It’s difficult to see how merely a different discount carrier could make such a difference.

We have to be very careful when evaluating job creation projections such as the one prepared by CEDBR for the arrival of Southwest. Consider the 2003 study prepared by CEDBR (Wichita Mid-Continent Airport Economic Impact) on the economic impact of the Wichita airport, which concluded that the airport had an impact on employment of 41,634 jobs, with payroll of $1,630,079,797.

In its calculations, the report included all the employees of Cessna and Bombardier — 12,134 in total — in determining the economic impact of the airport. Why? To quote the study: “While it might appear that manufacturing businesses could be based anywhere in the area, both Cessna and Bombardier require a location with runways and instrumentation structures that allow for flights and flight testing of business jet airplanes.” This is true, but it is quite a stretch to attribute all the economic impact of these employees solely to the airport.

For one thing, if we count the economic impact of the income of these employees as belonging to the airport, what then do we say about the economic impact of Cessna and Bombardier? We would have to count it as very little, because the impact of their employees’ earnings has been assigned to the airport. This is, of course, assuming that we count the impact of these employees only once.

This double-counting of the economic impact is a problem. Since this report was released, both Cessna and Bombardier have asked the state, city, and county for incentives and subsidies. Companies use the economic impact of their employee payroll as justification for the subsidies. But these dollars will have already been used, as they were attributed to the airport.

Does anyone at city hall track this, that the purported economic impact of employees has already been claimed by the airport?

Further: Suppose that Cessna tires of being on the west side of town, so it moves east and starts using Jabara Airport. Would Cessna’s economic impact on the City of Wichita, Sedgwick County, or State of Kansas be any different? I think it wouldn’t. But its impact on the Wichita airport would now be zero, or very nearly so.

The CEDBR study does provide some figures with the manufacturing employees excluded. The impact without the manufacturing employees included is estimated at $183 million, or about 11 percent of the $1.6 billion claimed earlier.

It is a convenient circumstance that these two manufacturers happen to be located near the airport. To credit the airport with the economic impact of these companies — as though the airport was involved in the actual manufacture of airplanes instead of providing an incidental (but important) service — is to grossly overstate the airport’s role and its economic importance.

Of course the airport is important to Wichita. We should seek to measure its impact sensibly instead of stretching to attribute every dollar possible to it. When advocates of any cause manufacture figures like the $1.6 billion economic impact, it casts doubt on other arguments they advance.

Similarly, we need to be realistic about the economic impact of Southwest Airlines in Wichita.


4 thoughts on “As Southwest arrives in Wichita, something else happens”

  1. Bob – The reason Southwest is replacing AirTran in Wichita is because Southwest has bought AirTran and is absorbing most of its operations. Wichita is very fortunate that it was one of the AirTran cities that Southwest decided to keep. AirTran was running three flights a day (all to Atlanta) on 117-seat planes. Southwest will run five flights a day (to Dallas, Chicago, and Las Vegas) on 143-seat planes. AirTran was useful if you were flying to the East Coast; Southwest will get passengers headed everywhere. For the last 24 years, I’ve driven I-35 almost every trip back to Wichita, but I’ll fly up on Southwest now. Back-of-napkin math, I will be shocked if Southwest doesn’t record 300,000 passengers in and out of Wichita in its first 12 months there.

  2. As usual, half facts and innuendo that form “analysis”. That fact that the author doesn’t even know that Southwest bought AirTran should speak VOLUMES to anyone who read the author’s material and its credibility, or lack thereof.

  3. Assume that Bob didn’t know the relationship between Southwest and AirTran. How does that change anything? I think that your focusing on something like this reveals that you don’t have any substantive criticism of the article. Step up if you do.

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