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Economic Impact

NORFOLK INTERNATIONAL AIRPORT

2019 Economic Impact Study

The Norfolk Airport Authority (NAA) engaged InterVISTAS Consulting Inc. (InterVISTAS) to conduct an economic impact study to account for the operations of Norfolk International Airport (ORF) during the calendar year 2019. This study serves as an update to a prior economic impact analysis of operations in 2016 (the 2016 Study) and provides a snapshot of the airport’s economic contribution to the Commonwealth of Virginia in 2019. Since that earlier report was issued, passenger traffic at the airport rose by 776,000 (+24 percent). The airport has nonstop service to 11 more markets than it had in 2016, and two carriers – Allegiant and Frontier Airlines – launched new operations at ORF.

Airports play a critical role within the economy by facilitating the movement of people, goods, and services throughout the nation and world. The industry facilitates employment and economic development in the broader economy through a number of key mechanisms including tourism, investment, trade of goods and services, and productivity. ORF has experienced considerable growth in commercial passenger traffic and operations over the past few years, making it a major economic generator for the surrounding Virginia Beach-Norfolk-Newport News Metropolitan Statistical Area (MSA) and Virginia as a whole.

Economic impact is a measure of the spending and employment associated with a sector of the economy, a specific project, or a change in government policy or regulation. This analysis focuses on the economic contributions from ongoing activities at Norfolk International Airport, as well as tourism facilitated by the airport. The three major components of economic impact are classified as direct, indirect, and induced impacts.* Together, they provide a snapshot of how the business of the airport supports the local and statewide economy.

ORF’s impact in the MSA is reflected first and foremost in the 3,180 direct jobs associated with ongoing airport operations and the $227 million in direct wages paid for these jobs. Direct employment located at the airport has grown 14 percent since 2016, driven by substantial growth in commercial air service and passenger traffic. Including indirect and induced impacts, ORF’s ongoing operations generated a total of 5,910 jobs and $383 million in total wages within the Commonwealth of Virginia in 2019.

In addition to regular ongoing operations, capital improvement programs at airports support further significant economic impacts. Over the past several years, ORF has spent an average of $16 million annually on capital improvements, supporting an additional 200 direct jobs paying $12 million in direct wages. Including indirect and induced impacts, ORF’s capital improvement programs supported a total of 290 jobs and $17 million in total wages throughout the Commonwealth of Virginia in 2019.

Beyond the economic effects associated with the airport’s operations and capital improvements, ORF facilitates additional impacts from tourism by visitors to the region who arrive and depart via the airport rather than by other means (e.g., automobile). The hospitality industry in particular benefits from visitors who spend money on lodging, meals, entertainment, car rentals, and retail. Direct employment associated with these industries thanks to spending by air visitors via ORF accounts for an additional 8,460 direct jobs and $228 million in direct wages paid. Including indirect and induced impacts, spending by these visitors supported a total of 11,120 jobs and $376 million in total wages throughout the Commonwealth of Virginia in 2019.

In total, the consolidated economic impact of ORF in 2019 exceeded 17,300 jobs that paid about $775 million in earnings, with GDP in excess of $1.3 billion and total economic output of $2.2 billion.  This represents an increase over the 2016 results of 2,400 jobs (16 percent), $140 million in wages (21 percent), $270 million in GDP (26 percent), and $280 million in economic output (15 percent).

* Direct impacts account for the economic activity of the airport itself. Indirect impacts are those that result because of the direct impacts and involve employment in upstream industries (suppliers) that depend upon activities at ORF. Induced employment is generated from the spending of wages and earnings by individuals employed directly or indirectly by the airport.

Read the 2019 Norfolk International Airport Economic Impact Study