Direct socio-economic impact of Malpensa airport

Malpensa airport in 2018 recorded the presence of 548 production activities, delivering over 20,500 work units.

Direct socio-economic impact generated by Malpensa airport

In the last five years, the presence of companies inside the airport structures grew by 13.7% (1.7% in the last year), with the corresponding job creation increasing by 23.1% (7.6% in 2018), due to a 29.6% increase in transport units (8.4% in 2018).

These performances indicate the current capacity of the airport to create work units against the growth in traffic, which can be quantified as 681 work units per million transported units, reducing slightly on previous years. According to a study commissioned by ACI Europe¹², direct employment generated by airports is influenced by the size of the airport, the type of traffic, as well as the mix of the traffic handled. The growth in airport size has an inversely proportional impact on its job creation capacity, just like the significant presence of low-cost airlines in the airport generates a lower impact on direct employment compared to the traffic produced by traditional carriers. Nonetheless, Malpensa’s ability to generate employment continues to show constant growth. In the five-year period, the value of production realized within Malpensa airport, totalling almost Euro 5 billion in 2018 (an increase of +58.3% on 2014; +0.9% on 2017), grew significantly. This growth includes the increase in direct employment, the inflation-linked contribution, and the increase of overall productivity which characterized the whole Lombardy production system in the period covered by the four studies.

Direct employment impact of Malpensa on CUV municipalities (Voluntary Urban Committees)

The analysis of the regional employment distribution, directly due to Malpensa airport, shows that 79.3% of employees live in Lombardy, with over 6% residing in the neighbouring province of Novara and almost 12% residing outside the region.

Employment impact of Malpensa on the CUV municipalities

In the Province of Varese, in which Malpensa airport is located, approximately half of employees were based (50.6%), while in the CUV municipalities slightly more than 20% of employment generated by the airport was located (38% of the employment directly generated by Malpensa in the Province of Varese).

Indirect and spin-off socio-economic impacts of Malpensa

Testament to the indirect impact of Malpensa airport (related to the supply chain external to the production units operating within the airport) in 2018 are the over 12,600 job openings, related to Euro 1.8 billion of value of production generated.

The spin-off effect (resulting from the increase of aggregate demand generated by salary and payments to employees operating inside the airport structures) represents, on the other hand, approximately 9,600 job openings with a value of production worth Euro 2.4 billion.

After 2017’s significant increases in indirect and ancillary impacts over previous years¹³, the trend continued in 2018, albeit at a slower rate both in terms of production and employment. The continuing general positive economic climate and the sustained growth in passengers gravitating to the airport confirmed their role in facilitating production and employment.

In general terms, the indirect effects are positively connected to the overall size of the economic activities operating inside the airport, the expansion and development of the aviation sector in the country (airports which acquire significant part of their supplies from domestic sectors have a higher instance of job creation and indirect production value) and from the levels of productivity/efficiencies of the industries supplying the air transport sector (sectors with high levels of industrial automation and technologies have a lower level of indirect employment impacts).

Development of Malpensa’s indirect and spin-off effect

The scale of the spin-off effects is, on the other hand, correlated to the salary scales of the work units directly and indirectly generated. It is also correlated to the preference for consuming domestic products, a tendency for families to save rather than spend, (higher levels of spending on imported goods and services, or high-levels of savings, reduce the impact) and the levels of tax contributions (higher tax contributions reduce the multiplier).

The catalytic socio-economic impact of Malpensa airport

The concept of the catalytic impact is in line with the idea that the airport contributes to generating (and is a part of) a sort of eco-system of which the airport is initially the driving force and then the co-pivot. Catalytic dynamics may therefore be the forces, which, in the long term, bring together in the airport’s territory, people, production activities, competencies and technologies. By placing catalytic-type impacts in the broader context of territorial attractiveness it is clear that:

• the catalytic activation tends to become significant and transversal only beyond a certain airport size threshold and, correlates in a non-linear manner, to traffic flows;
• it is not easy to identify and separate the various breakdowns of the catalytic impact;
• there are feedback mechanisms, even if relatively weaker, by which the economic context, in its turn, triggers airport development.

Analysis of the components of Malpensa’s catalytic impact

International trade

Manufacturing companies present in the territory benefit from the airport connections to export markets.

Tourism

Air access increases the number of inbound tourists to a country. This tourist spend supports a wide range of businesses: hotels, restaurants, shops, entertainment and leisure services, car hire, etc.

The attraction and the retention of production investments in the territory

The presence of an international airport is a key factor for companies deciding to relocate their offices, production plants or warehouses. 

The role of Malpensa in international trade

The volume of air cargo volume to and from Italy is negligible (about 2%) of the external national trade flows and is trumped by maritime transport as the key mode. This might imply that the catalytic effect on trade is insignificant. The framework changes if you take into account the value of the shipped goods. The total value of air cargo transported represents 8.5% of Italian foreign trade and of this, over 65% originates in the north of Italy, with increasing values over time. These amounts are even more significant if we focus on exports: 10.5% of Italian exports in value are shipped by air (8.7% in 2010), with 67.6% of this transiting through northern Italian airports (against 69.1% in 2010). The role of Malpensa from this point of view is primordial, not only in terms of its impact on the overall value of Italian exports (which in 2018 increased by 1%), but in terms of its impact on national direct exports outside the EU (where air cargo suffers less from competition with maritime transport and notably road haulage), which between 2010 and 2018 increased from 13.4% to 15.1%.

Development of the import-export flows of air cargo in Italy (in millions of Euro)

Import-export flows (Euro 48.5 billion) through Malpensa correspond to approximately 2.8% of Italian GDP.

Impact of Malpensa cargo traffic on Italian export values (millions of Euro)

With regard to goods transiting through Malpensa's Cargo City, the main reference markets in terms of import values are East Asia, North America and the European Union. The Middle East is included when we consider export values.

Import-export movements in value terms via Malpensa by region (Euro thousands)

During the acute phase of the recession (2010) to today (2018), the total value of exports transiting through Malpensa has increased much more quickly (60.3%) than imports (+18.3%), an increase of approximately Euro 12.3 billion in absolute value.

The main markets in terms of cargo managed by Malpensa are the European Union (imports +29.5%, exports +112.6%), North America (imports -10.4%, exports +65.0%), the Middle East (exports +19.7%) and East Asia (exports +85.7%). An analysis of main industry sector goods flows (altogether totalling 93.7% of the imports and 91.1% of the imports in terms of value handled by Malpensa) shows a peak in exports for machinery, fashion/clothes, chemical/plastics and furniture/furnishings. Imports are strong in the machinery, chemical/plastic and fashion/clothes sectors.

Change in import-export flows through Malpensa per industry sector (Euro THOUSANDS)

Compared to 2010, industrial sector export values transiting through Malpensa have almost tripled (+57.3%) compared to imports (+19.2%), resulting in a net improvement of the trade balance. 

Export quotas of some industry sectors transiting through Malpensa to key global markets, (in millions of Euro)

Strong increases are reported in imports in the furniture/furnishings (+72.9%) and transport vehicles (+42.9%, down compared to 2017) sectors, the doubling of exports in the fashion/clothes sector (+102.8%) and the decisive increase, also in terms of annual growth, in the machinery sector (+45%).

Malpensa's role in terms of cargo becomes even more important if we focus on the growth of export value quotas over the period 2010-2018 for some industry sectors.

The value of Italian exports in the fashion/clothes and furniture/furnishing sectors transiting through Malpensa almost doubled in the period, growing from 12.0% for both sectors in 2010 to 23.1% and 20.1% respectively in 2018. A high growth rate was also registered for the machinery and the chemical/plastics sector, with Italian exports using Cargo City in Malpensa for 12.1% and 7.9% respectively of its export value, compared to 8.2% and 5.3% in 2010.

The role of Malpensa in Lombardy’s tourism industry

The existence of a positive and significant correlation between airport connectivity and tourist attractiveness is well-established in research literature. Beyond the obvious fact that a greater number of airport connections generates more international mobility and therefore more tourism, it is worthwhile highlighting that:

• The effect works both ways (inbound and outbound tourism) regardless of the type of airport (Oxford Economics 2013).
• The presence of an airport significantly contributes to increasing the prestige and image of a tourist destination ((Vujicic e Wickelgren, 2013).
• The airport becomes a key asset in implementing public policies to support tourism (Jacobs Consultancy per NTTC, 2012).

Socio-economic impact generated by tourist flows through Malpensa

On the basis of the data produced by the LIUC – SEA airport-tourism Observatory - it is estimated that:

• In 2018 Malpensa airport delivered almost 7 million tourists to the Lombardy region, of which 1.4 million from outside the European Union.
• Data on inbound tourism shows a 57% impact on total inbound passenger flows, with a 43% impact on intercontinental flows, in constant growth since 2010.
• After Europe, the areas contributing most passengers are the Middle East (approximately 7.3% of total inbound), Asia (4.2%) and North America (approximately 4%).
• Malpensa, in 2017, delivered over 59% of the total tourists visiting Lombardy from non-EU markets.

To establish how these dynamics translate into socio-economic impact variables that benefit the Lombardy region, a study was carried out on a panel of passengers disembarking in Malpensa, to establish their spending habits in the region, in terms of transport, hotels, restaurants, retail outlets, free time, entertainment and leisure: almost 4,000 outbound international tourists from Malpensa Terminal 1 or Terminal 2 with at least one overnight stay in Lombardy were interviewed between 2017 and 2018.

For each cost item and each airport Terminal the average daily spend per capita declared was multiplied by the average stay and then by the number of international visitors transiting through Malpensa in 2018. Thus, the overall spend per Terminal was established. These values, compared to the average productivity per employee per relevant sector, generated data on the catalytic impact on employment. Economically, inbound tourism represents about Euro 7.3 billion. Work units created from inbound tourism linked to Malpensa exceed 109,000 units.

The role of Malpensa in the attractiveness of local businesses

To identify the role played by Malpensa airport in the decisions taken by the players in the industrial sector regarding their location (and/or continued presence), production investments (plants, offices, warehouses), a survey was carried out on 123 (+16% on 2017) representatives of both Italian and overseas companies based in the airport’s immediate hinterland. The companies surveyed are mainly located in the area east of Malpensa (Asse del Sempione) and in the municipalities of Varese, Gallarate, Busto Arsizio, Legnano and Saronno, with an accumulative turnover of over Euro 9.8 billion (2016 data), representing approximately 30,000 work units.

Role of Malpensa in the choice of location/continued presence of companies in the hinterland

As shown from the results of the survey, approximately 39% of the companies surveyed attributed a high degree of importance to the presence of an intercontinental airport in the vicinity for the development of their business. Furthermore, 74.0% of the companies interviewed identified the presence of Malpensa as a primary or secondary factor conditioning their choice of location/continuation of their production units. These companies have an accumulative turnover of Euro 7.8 billion (79.6% of the sample), providing 22,347 work units (slightly less than 75.0% of the work units in the sampled companies).

Overall socio-economic impact of Malpensa

Putting together the results obtained from the estimates of the different types of impacts considered, it emerges that the overall socio-economic impact of Malpensa in 2018 - with variable degrees of intensity within a regional catchment area, which, based on the processes considered, stretches from the immediate hinterland, to Lombardy, to the entire north of Italy - corresponds Euro 41.5 billion of production value generated, and the creation of over 350,000 work units.

Cumulative socio-economic impact of Malpensa airport

¹² Intervistas, Economic Impact of European Airports, 2015
¹³ For an explanation of the phenomenon, see 2017’s NFD