This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
10/15/2010
Construction Wrapping up at New St. George Airport
Construction Wrapping up at New St. George Airport means that St. George will be in a better position to create business opportunities for its residents. City leaders say the primary benefit for locals isn't flights but the promise of higher paying jobs in the community because St. George can now compete for business oportunities throughout the country. The total cost will be about 260 million and is the biggest construction project in the city's history. The existing airport will still be used but is too small for commercial jets. It's location on the bluff makes it prime real estate. This should expand the local economy and should increase the number of jobs, not only from new airport employees, but also from new businesses entering the market. In the past, it may not have been cost effective for these companies to have done business there but that barrier is now gone.
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I am also excited about the new airport; however, I am also confused as to why St. George didn’t build an airport that would accommodate all current commercial aircraft such as the Airbus A380. According to the St. George website dedicated to the new airport it “Will accommodate regional jet aircraft, 737s and Airbus 319s”. I believe St. George is missing the opportunity to meet the demand for international businesses and travelers by not providing the opportunity to supply such needs in the design and construction of its current airport. This is very sad considering the monumental opportunity and resources that are being made available to St. George in building this airport. I have to wonder if there were some backroom politics that kept this airport from supplying the kind of international menu that it could have. As an appendage; we all know that a big airport isn’t the only thing that is keeping St. George from attracting big businesses.
Oh yikes guys ...
Do you have any evidence to support these assertions? This all sounds like a marketing campaign, not serious economics.
Yes, St. George needed to get rid of the old airport.
But, where is the evidence that airports have helped cities on average?
Do you even know where you can go and obtain such evidence?
I don't mean to be insulting; if that data showed a lot of positive outcomes it would be easy to find. It's not. There's a reason for that.
And ... why exactly are there so few airports built by private entities? Could it be that they aren't moneymakers?
There is an argument that it is hard for a firm to monetize the positive externalities created by an airport, and therefore they need to be created by governments.
If this was the case, wouldn't there be a government somewhere willing to subsidize a private airport to help internalize those benefits? Again ... not many. Why is that?
Is it because managers and owners are dumb and are leaving profit opportunities on the table? I don't think so.
I completely disagree with the assumption that St. George needed a new airport. SkyWest has only been operating 6 flights per day, and they cancelled their route to to LA. There is no demand for a larger airport, if there was, we would have more than one carrier here already. The other issue is the increased price in lease agreements for FBO's, Maintenance and Repair Companies and private hangers. With no promise of increased flights, there is no incentive for these lease paying customers to stay here. The may as well go to Cedar City or Mesquite.
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