The role of airports in building the economy

Chris Farrell Jan 27, 2012

Jeremy Hobson: The latest ranking of the best airports in the world does not offer much good news for the United States. Only one terminal makes the top ten on the list from — that would Jet Blue’s Terminal 5 at New York’s JFK airport. Meanwhile, the U.S. is home to four of the ten worst airports on the list, including Delta’s Terminal 3 at JFK. Does it matter?

Well, for answers, let’s bring in Marketplace economics correspondent Chris Farrell. Good morning.

Chris Farrell: Good morning, Jeremy.

Hobson: Well Chris, why does a good airport matter to our economy really?

Farrell: Well, besides that a bad airport is a miserable experience whenever you travel? Look, over the years, you’ve talked a lot about this evolving global economy. And if you think about it, airports, airlines, commercial aviation — I mean, this is a linchpin infrastructure in this global economy. It’s important locally, it’s important nationally, it’s important around the world. And the U.S. accounts for about a third for the world’s total air traffic. So, if the United States wants to continue to be the major player in the global economy, you need a really efficient, robust aviation system.

Hobson: But we’ve got incredibly high unemployment right now, we’ve got very high deficits. Should we really be spending money on airports or high-speed trains or other infrastructure like that at a time like this?

Farrell: You know, Jeremy, it’s really striking whether you’re doing research into the airports and the airlines or looking at the railways or the roads. There’s a constant theme that our transportation network is starved of investment capital, that we’ve neglected it for too long. And the thing about public investment and transportation is that it makes the private sector more efficient. So it’s easier for people to do business travel, it’s easier for goods to travel their way on an airplane — a lot of goods have to go on airplanes. Think of FedEx and UPS. So this is the kind of investment that makes the private sector more efficient, which would lead to more jobs, which leads to more wealth.

Hobson: But does this kind of investment have to happen right now, at a time when we’ve got such big problems?

Farrell: I was watching Ben Bernanke and his press conference the other day and there was a question about low interest rates that savers are getting, and he said, well that’s, you know, the economy that we’re in. Let’s flip it around — those low interest rates, that means that the cost of capital, the cost of building your infrastructure is really cheap. The time to do it is now, because the capital’s low and there’s a lot of labor that would like a job.

Hobson: Marketplace economics correspondent Chris Farrell. Chris, thanks a lot.

Farrell: Thank you.

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