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             PLANNING, TRANSPORTATION AND THE ENVIRONMENT, WASTE AND
                                 ECONOMIC DEVELOPMENT REVIEW PANEL
                                                    DATE: 14 April 2003


    ECONOMIC AND ENVIRONMENTAL IMPACT STUDY FOR NORWICH AIRPORT
                  Report by Head of Economic Development



       This report highlights the key findings of the recent impact
        assessment of Norwich International Airport.



1      BACKGROUND

1.1    Aviation will play a very significant role in the national and regional economies
       of the 21st century. Regions which are linked to the rest of Europe and the
       world by airports feeding a global air transport network are more likely to have
       sustained and successful economic development and regeneration. In this
       respect, EEDA’s Regional Economic Strategy highlights “transport gateways”
       as a key sector and priority for driving economic growth. The emerging
       Regional Planning Guidance also places a great deal of emphasis on their
       importance.

1.2    The social and economic benefits which arise from the aviation industry are
       measured in terms of direct and indirect employment, global trade, inward
       investment and travel for leisure, education and cultural diversity. Many
       airports have shown that they are major economic assets offering important
       economic returns and benefits. Decisions made in respect of airports can
       have a significant impact on both local and regional economic performance.

1.3    An airport is a key industry in any modern economy and a major employer in
       its own right. Additionally, it generates jobs in the region through the supply
       chain. There are also wider benefits and the aviation industry has expanded
       the range of choices available to the consumer and, through the availability of
       affordable and frequent flights from the UK to most of the world, has brought
       foreign travel and holidays within reach of a much broader cross-section of the
       population.

1.4    There are however, associated environmental costs resulting from these
       activities, at both the local and global level, which need to be taken into
       account – such as, noise, greenhouse gas emissions and air quality.

1.5    In addition to direct employment (both on and off site), Norwich Airport
       sustains many indirect and induced jobs. A report by the City Council in 1991
       calculated that a total of 8,000 jobs were related to the operations of the
       airport – three quarters of which were in the offshore sector. This assessment


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        required updating because the shape of the Norfolk economy has changed
        significantly in 12 years.

1.6     As well as the employment aspects, the airport has potential economic
        benefits in terms of:

           The income generated for the local economy as a result of its activities.
           The benefits to the needs of local businesses in having the facility nearby.
           Its role in the attraction and retention of industry.
           Its contribution in attracting tourists and associated expenditure .
           Its contribution to promoting a positive image of the area.

2.      STUDY PURPOSE

2.1     In the light of the South East and East of England Regional Air Services Study
        (SERAS) and associated passenger growth projections for Norwich, the study
        was undertaken to:

           Allow an informed view to be taken of the balance between the economic
            benefit and environmental costs associated with airport development.
           Promote understanding of the economic role and impact of the airport
            amongst key decision-makers.

3.      STUDY OBJECTIVES

3.1     The objectives of the impact study are:

        a) To measure the employment impact, both direct and indirect, of the airport
           and to identify the characteristics of direct employment.
        b) To show the relationship between passenger growth and airport
           employment.
        c) To assess the environmental impact of airport growth projections
        d) To define the role of Norwich Airport in the region
        e) To highlight the wider economic benefit of the airport.

3.2     Section 5 of this report provides an outline of the key findings in relation to
        these objectives.

4.      PROCESS

4.1     Following an invitation to submit proposals in line with the study brief (agreed
        by all funding partners – County Council, City Council and EEDA), ARUP
        Economics and Planning was selected to undertake the work.

4.2     The chosen consultants have reported to a small Steering Group with
        representation from the funders and the airport. The Group received a draft of
        the study report at the end of October 2002, to meet with the timetable for
        responses to the Government’s major consultation on the Future Development
        of Air Transport in the UK, ie SERAS, which is the relevant regional document
        for the future development context for Norwich Airport over the next 30 years.


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        The County Council’s response to the consultation was presented and agreed
        at Cabinet on 18 November 2002.

4.3     The Final Report was delivered in mid-December 2002. A copy of the full
        report is available in the Members’ Room.

5.      KEY FINDINGS

5.1     The following represent the key findings of the study in relation to its main
        objectives:

a)      Norwich Airport presently accounts for 1,197 direct jobs – the majority being
        skilled or semi-skilled and filled by residents within a 20 mile catchment radius.
        The airport supports nearly 1,100 indirect FTE jobs and over 2,100 FTE
        induced jobs. Extrapolated forecasts to 2030 for low, medium and high
        passenger growth scenarios indicate that the corresponding potential
        employment growth (direct, indirect and induced) range from between 104%
        to 309% on 2002 levels.

        In addition, some 6,000 jobs linked to the offshore sector are heavily reliant on
        the services of the airport for operational and management transport
        requirements. Offshore helicopter movements to and from the gas platforms
        totalled 5,540 in 2001. This represents over 10% of total aircraft movements
        (both commercial and non commercial). When business traffic to other main
        offshore-related destinations is included (ie Amsterdam and Aberdeen), this
        accounts for an estimated 20% of aircraft traffic. There is further potential to
        capture more of the North Sea gas-related aviation market.

        Based on average gross annual salary of just under £20,000, the current level
        of income generated by airport employment is almost £90M – ie £23.9 million
        (direct), £21.9 million (indirect) and £42.7 million (induced). Under the lower
        growth scenario, the total could rise to £181 million by 2030, while under the
        high growth scenario, the equivalent figure would be £362 million.

b)      Commercial aircraft movements at Norwich Airport have shown a major
        increase in recent years. The most important element (in terms of the
        economic benefits) is the Commercial Air Passenger Services sector, which
        increased by over 100% during the period 1997-2001. This compares with an
        average increase of 24% across the UK over the same period. Non-
        commercial movements at the airport have fallen over this period – in line with
        the UK pattern – however, local aeronautical club movements still represent a
        strong sector in terms of the number of movements (29% of airport total).

        Over the period 1997-2001, the number of commercial passengers increased
        by 116,000. This represents growth of 30% - against the national average of
        24% - and 0.22% of all airport passengers in the UK (up from 0.19% in 1997).
        Unsurprisingly, given the volume of charter flights, the majority of passengers
        fly between April and September. Forecasts of passenger traffic at Norwich
        Airport show that international passenger traffic will increase at a higher rate
        than domestic travel and higher than the rate forecast for the UK as a whole.
        Major growth is likely to take place in holiday charter traffic to European

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        destinations, while larger aircraft, higher frequencies and new routes will also
        see scheduled service passenger numbers grow.

c)      Surface access is perceived as one of the potential constraints to growth of
        Norwich Airport. The current Airport Surface Access Strategy envisages a
        significant shift in trips by both employees and passengers away from the
        private car to other modes. In the absence of this, the growth of the airport
        could be restricted unless major road schemes such as a Northern Distributor
        Road are built. Without necessary improvements to the supporting transport
        infrastructure – in particular, road access – opportunities for growth at the
        airport could be threatened.

        Detailed noise modelling will be required for any of the expansion scenarios.
        However, based on current information, any noise effects are likely to be of
        minor significance.

        Air quality effects associated with air traffic movements are likely to be limited
        to the area immediately surrounding the taxiways and runways and are
        unlikely to affect the air quality climate of the area as a whole.

        An increase in aircraft numbers at the Airport is likely to increase greenhouse
        gas emissions but this effect may be reduced by improvements in aircraft
        technologies.

d)      The majority of overseas tourists to Norfolk do so as part of a wider trip and
        arrive via a London airport. The airport therefore accounts for a relatively
        small proportion of the in-coming visitors to the county – however, increased
        marketing to specific target groups could result in significant benefits to the
        economy of Norfolk both in terms of jobs and income generation.

        Large scale growth at Stansted may mean an increased potential for Norwich
        Airport to take advantage of changes in the market and pick up a greater
        share of the low cost and charter flights. However, if Stansted is allowed to
        grow to its maximum, the potential for growth in Norwich may be limited.

        Cargo handling represents a very small sector of the airport’s throughput and
        the low level of air freight movements and export activity via the airport is
        unlikely to increase.

e)      Infrastructure nodes can act as drivers for clustering of economic activity.
        Development of an aviation–related cluster on surplus, non-operational land
        has major potential. However, the ability to encourage investors to locate on a
        new business park at Norwich Airport depends on a combination of factors –
        including the impact of growth levels of the airport, regional policy to
        encourage investment and clustering and access improvements.




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6.      CONCLUSION

6.1     Norwich Airport is a highly significant element of the sub-regional economy. A
        growing airport can provide a wide range of new job opportunities, both on and
        off-site. The facility has the potential to act as a major catalyst for growth in
        the county and beyond. This study provides detailed analysis which will
        provide the basis for further work to explore opportunities such as cluster
        development of airport related activities, inbound tourism and future
        development of the airport itself.

7.      RESOURCE IMPLICATIONS

7.1     Finance: Nil

7.2     Staff: Nil

7.3     Property: Nil

7.4     IT: Nil

8       ACTION REQUIRED

8.1     Members are asked to note the findings of the study, which will help to inform
        future key decisions on airport expansion proposals and associated
        infrastructure improvements.




Officer Contact:                  Michael Hand              Telephone (01603) 222735

Background Document:              Norwich International Airport
                                  Economic and Environmental Impact Study 2002




                               If you would like this report in large print, audio, Braille,
                               alternative format or in a different language please
                               contact Economic Development Unit
                                               Tel: 01603 222710
                                               Fax: 01603 223345
                                               Email: thefutures@norfolk.gov.uk



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