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ECONOMY
Assessing the EconomicImportance of Airports and theAir Transport Cluster in Belgium
In the past few years, the logistics business has come to play a significant role in creatingadded value in the Benelux. Air transport and airports in particular are driving forces in thiscontext, not only in terms of business generated within the air transport cluster, but alsoin terms of airports’ attractiveness. A close look at the top 20 cargo airports in Europein 2006, shows us that three of the six Belgian airports are included in that list. BrusselsAirport and Liège Airport occupy places 6 and 8 respectively, while Ostend-Bruges Airportranks 20th. Moreover, in 2006, Brussels Airport was the 21st largest passenger airportin geographical Europe with 16.7 million passengers, and 19th within the EU. Both passen-ger and cargo rankings are spearheaded by the international airports of London Heath-row, Paris Charles de Gaulle, Frankfurt and Amsterdam Schiphol, which form the so-called“FLAP quadrangle”, at the centre of which lies Belgium. With six airports situated in a smallcountry like Belgium, the question arises as to what economic effect those airports haveon the Belgian economy. An estimate of the economic effect of the Belgian airports andair transport cluster was calculated in the National Bank of Belgium (NBB) Working paperNo. 158, entitled “Economic Importance of Air Transport and Airport Activities in Belgium”,which was published in March 2009, and which forms the basis of this article.
Air Transport in Belgium
From the six airports under review,all operate in the passenger transportsegment, which is heavily dominatedby two airports: Brussels, the nationalairport, and Charleroi, an airport fo-cusing on the low-cost sector. Theairports at Ostend and Liège concen-trate more on cargo, while the focusin Antwerp and Kortrijk lies on busi-ness travel.Passenger traf
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c, in particular, isfocused in Brussels Airport, whichrepresents over 85 percent of the ap-proximately 20 million passengersrecorded in the six airports underreview in 2006 (see table 1). Nextcomes Charleroi with over 11 percent,
By Franziska Kupfer (University of Antwerp, Department of Transport and Regional Economics) and Frédéric Lagneaux
Source: Own Composition Based on Airport Operators
Figure 1:
Distribution of Passenger and Cargo Traf
fi
c at Belgian Airports in 2006
2followed by Liège, Antwerp, Ostend, and
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nally Kortrijk, a verysmall airport in the west of Belgium. Of these six airports, it isCharleroi that has seen the biggest expansion in passenger traf
fi
cover the period 1997-2007, as the activities of RyanAir, the mainairline operating at Charleroi, did not really take off until theearly years of this century. Liège Airport also saw a very markedrise in passenger traf
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c, while Ostend witnessed some expan-sion too, but Antwerp and Kortrijk experienced a steady decline.For the
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rst time in six years, passenger traf
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c passed the 20 mil-lion mark again in 2007 (table 1), a level not reached since 2001,as a result of the strong expansion at Brussels and Charleroi, theformer recording a better passenger load factor, while the lattercombined this advantage with a steady increase in the number of
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ights. There was also some expansion, admittedly more modestin absolute terms, but nonetheless noteworthy, at the other fourairports. In reality, the effects of the 9-11 attacks were not feltuntil 2002, a year in which substantial restructuring had been un-dertaken in the United States and in the rest of the world, therebyhaving a very marked impact on traf
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c levels. Also, the bank-ruptcy of the Belgian airline SABENA had a negative impacton air traf
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c in Belgium. Overall passenger traf
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c in Belgium in2002 decreased about 23 percent in comparison to 2001. Sincethen, the total number of annual movements at the six Belgianairports has not exceeded 500,000 units. The average annual in-crease in traf
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c came to 2.3 percent. In Belgium, it grew by 4.6percent
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on average at world level.
In the freight sector, it is again Brussels Airport that takes the lion’sshare, accounting for almost 60 percent, which is 784,000 tons, of Belgium’s air freight traf
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c, but it is relatively closely followed byLiège Airport, which represents about a third, i.e. 490,000 tons, of the same total (
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gure 1). Ostend is in third place with 8 percent.The strongest growth occurred at Liège Airport, which has record-ed an impressive 30 percent annual average increase from 1997 upuntil 2007. In 2008, however, cargo traf
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c in Liège grew only 5.9percent, as volumes have fallen dramatically since October 2008,a trend that has also been observed worldwide. The airport, whichis currently two places behind Brussels in the European rankingof freight airports, in eighth position, aims to be among the top5 in the medium term, on the basis of the steady growth of aircargo. Over the period, the average annual increase in the tonnagedispatched via the six airports under review was 7.6 percent. Withthis percentage, the growth of Belgian cargo traf
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c is well abovethe annual growth of world air cargo traf
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c (4.9 percent.
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). Thisdifference is mainly derived fro ptionalthe exc growth of aircargo at Liège Airport during that pero.
Methodology
The methodology and the de
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nition of clusters in particular arevery important for this article, so a short overview with the mostimportant points is given here.
or more eae normaon,we refer to the original study pulished by the National Bank of Belgium. (Kupfer and Lagneaux
, 2009)This article is concerned with the entire range of acties gener-ated by airports including those that are not neceily part of
ssarthe air transport industry. Two categories of econ activitiesmiare therefore used in the analysis, for which both t and in-iredirect effects are calculated. The “air transport clus ncludes
ter”the air transport activities, i.e. all the economic bran re
hes thaspeci
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c to and generate air transport, and thus inclus airportoperations. These branches, which de
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ne and are essentiato theair transport business, are also paramount for airport activities.Activities that are included are, for example, those of airlines,travel agencies and tour operators
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, airport operators, airporthandling, airport construction, and aircraft maintenance.The economic branches that use the airport infrastr /
uctureor that are situated on the airport’s grounds, complting the
menabovementioned air-transport activities, are grou nder theedheading “other airport-related activities”. They for e second
m tcluster analyzed in this study. This cluster includes, xample,forpassenger land transport, freight transport by road, res-hote,taurants, catering, and courier and postal services.
Figure 2:
Categories of ActivitiesSource: Kupfer, Lagneaux (2009)
The selection of
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rms used for the study is based on the list of con-cessionaires from each of the airports. All the data collected arefor the year 2006. The main sources for the microeconomic dataare the Central Balance Sheet Of
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ce (thean data, employment,value added, etc.) and from the Nati , -naltional accounts (classi
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cation of acts, regional breakdowns,vitisectoral aggregates, supply-use ta input-output tables, eles, tc.)and were published in 2008 for the ncial year 2006.
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na
Direct Value Added and Emplent inside the Bel ymian Airports
This section deals with the activiti ecores red in
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rms in 200at the six Belgian airports (see pa ) andrt a of
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ure 2), andoffers a general view of the relativ portance of those airimortsand of the sectors based there. It refore covers all airthert-related activities for the
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nancial y 200.
ear
Table 1:
Concession Revenue Determinants
PassengerTraffic2007(x 1000pax)Annualaveragepassen-ger trafficgrowth1997-2007(in percent)Cargo Traf-fic 2007(x 1000 tons)Annualaveragecargo traf-fic growth1997-2007(in percent)
Antwerp175-3.85-4.0Brussels17,839+1.1784+4.2Charleroi2,458+27.80n.Kortrijk67-4.51n.Liège333+7.8490+30.0Ostend180+3.6109+0.3TOTAL21,052+2.31,389+7.6
Source: Own Calculations Based on Airport Operators
3The analysis produces no surprises with regards to value added(VA), since Brussels Airport is very much the dominant airportin Belgium, with 83 percent of value added (
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gure 3), similar toits share of passenger traf
fi
c (85.5 percent, see
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gure 1). Next, along way behind, comes Liège (8.3 percent), Charleroi (3.9 per-cent), Antwerp (2.4 percent), Ostend (1.8 percent) and Kortrijk (0.6 percent). At over 1.4 billion euro (table 2), the value addedof Brussels Airport represents a considerable contribution to thenational income. Two-thirds of that VA comes from the activitiesof the air transport cluster, which more or less corresponds to theaverage for all six airports (65.5 percent, 1,132.9 million euro intotal). The other Flemish airports are slightly more dependenton air transport activity (69 percent), while at the two Walloonairports there is more of a balance between the two clusters (airtransport cluster = 56.6 percent of the total).Brussels Airport also clearly is the dominant airport in Belgiumin terms of employment, accounting for 82 percent of the total(
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gure 3). A distant second comes Liège (8.6 percent), followedby Charleroi (4.3 percent), Antwerp (2.4 percent), Ostend (2.1percent) and Kortrijk (0.7 percent). At almost 18,000 fulltime-equivalents (FTEs), the workforce of Brussels Airport representsa substantial contribution to employment in the region and in thecountry (table 2). The percentages for the
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rst cluster are signi
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-cantly lower than in the case of VA. The ratio between VA andemployment is therefore higher in the air transport cluster than inother airport-related activities. At Brussels Airport, 54.1 percentof the total labor force is employed in the air transport cluster,corresponding roughly to the average for all six airports (53.7percent). The other Flemish airports are also largely dependenton air transport activities for jobs (53.1 percent), while the oppo-site applies at the two Walloon airports, since they are dominatedby airport-related activities (52.5 percent of thetotal), particularly owing to the importance of courier and post services at Liège. On average,about 53.7 percent of the labor force, whichamounts to 11.534 FTEs, is employed in the airtransport cluster at the Belgian airports.
Indirect Value Added and Employment in-side Belgian Airports
Indirect value added, i.e. the wealth generatedby suppliers (upstream) of
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rms based in the sixairports, totaled well over 2 billion euro (table4). Comparison with direct VA (1.7 billion euro)allows to estimate the multiplier
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, which comesto 2.23 overall. This means that, for every euroof VA generated directly by the
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rms under re-view, 2.23 euro will be generated via the inter-sectoral links between them and their suppliers(including direct VA). These coef
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cients varyfrom one airport to another, Kortrijk having thehighest multiplier (2.91) and Brussels the low-est (2.15)
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. These differences are connected withthe relative position of the various sectors of ac-tivity in the airports. In general, the air transportsector, the trade branches, construction, rentingof aircraft,
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ying schools and other services ex-hibit a closer link between indirect and directeffects than the other branches, in terms of VA.Among the sectors that make up transport logis-tics, air transport is, in fact, a key sector, havingconsiderable impact on its suppliers
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.
Indirect employment came to over 25,000FTEs and in comparison with direct employ-ment (21,500 FTEs), it indicates an overallmultiplier of 2.18. This means that one directFTE working in the
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rms under review will ul-timately generate 2.18 FTEs in the entire econ-omy (including direct FTEs) as a result of theintersectoral links with suppliers. These coef-
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cients vary from one airport to another, Liègeairport having the highest multiplier (2.68)and Ostend the lowest (2.06). As already men-tioned, these differences are connected withthe relative position of the various sectors of activity in the airports, with air transport - de
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-nitely the key sector - generating a large vol-ume of indirect jobs (see next page).
Table 2:
Air Transport and other Airport-related Activities at Belgian Airports in 2006
AirportClusterValue added(in millioneuro)Share ofclusters (inpercent)Employ-ment(in FTEs)Share ofclusters(in percent)
AntwerpAir Transport26.463.329456.7Other Airport-related act.15.336.722543.3Antwerp Total41.7519BrusselsAir Transport955.966.69,52854.1Other Airport-related act.479.733.48,08945.9Brussels Total1,435.617618CharleroiAir Transport48.271.759965.0Other Airport-related act.19.028.332235.0Charleroi Total67.2922KortrijkAir Transport7.475.510269.8Other Airport-related act.2.424.54430.2Kortrijk Total9.8146LiègeAir Transport71.749.771338.7Other Airport-related act.72.750.31,13061.3Liège Total144.4 1,843OstendAir Transport23.575.129867.5Other Airport-related act.7.824.914332.5Ostend Total31.3441TotalAir Transport1,132.965.511,53453.7Other Airport-related act.596.934.59,95446.3Grand Total1,729.921,488
Source: Kupfer, Lagneaux(2009)
Figure 3:
Direct Value Added and Employment of Belgian Airports in 2006 Source: Kupfer, Lagneaux (2009)
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