Use of Air Transportation by Business and Industry in Minnesota

Abstract

Current and forecasted use of air transportation by businesses in Minnesota using the Standard Industrial Classification is described. The research is based upon a study on air service and commercial and industrial activity in Minnesota required by the Minnesota legislature in 1996. Purchases from the air transportation sector that includes scheduled and nonscheduled passenger and freight services are based upon the 1993 IMPLAN input-output model for Minnesota and Bureau of Economic Analysis (BEA) and Bureau of Labor Statistics (BLS) forecasts for Minnesota. In addition to intraindustry transfers within the air transportation sector, purchases of air transportation are dominated by business associations, management and consulting services, and the U.S. Postal Service sectors. These four sectors also represent the sectors with the largest share of purchases of air transportation. BLS historical and forecast data suggest that the major group of industries that purchased air transportation in 1977 will remain intact through 2005. Under BEA forecasts for Minnesota, air transportation purchases by all industry sectors will increase more rapidly than other transportation modes. BEA also forecasts the air transportation component of gross state product growing faster than forecasted passenger originations at Minneapolis–St. Paul (MSP). The implications of the BEA forecasts will be considered in the next update of activity forecasts for MSP. This research is considered only the first step in understanding the role of air transportation to commerce and industry in Minnesota and other states.