Small agency. Small budget. Big fiscal impact. That’s the short description of the Oklahoma Aeronautics Commission. The story of its history and economic impact on communities both urban and rural is much longer.
Created in 1963, the Aeronautics Commission replaced the Oklahoma Aviation Commission which came about in 1946. The new commission reportedly reflected a change in the state’s focus to encompass aviation, aerospace, and airports.
Back in the 1940s, Oklahoma established itself as a premiere aviation destination. Tinker Air Force Base was built early in this decade. In 1946, two relocations followed the end of WWII when American Airlines moved its largest maintenance base from New York’s LaGuardia Airfield to Tulsa and the Civil Aeronautics Administration’s (now FAA) Standardization Center moved from Houston to Oklahoma City.
Today, OAC invests in Oklahoma communities and commerce through the Oklahoma Airport System and its 108 airports across the state. Of these airports, four are designated as commercial airports and 104 are regional general aviation airports.
The impact on Oklahoma’s economy was measured in a report released in 2017. This snapshot of the aeronautics industry demonstrated it was the state’s second largest industry.
Of the 108 airports, 43 have jet-capable runways and 94% of Oklahomans live within 25 miles of one of these airports.
Airport jobs
The 2017 report pointed to airports employing more than 74,000 people generating $3.644 billion in total annual payroll. When payroll is added to the almost $7 billion in spending, the aeronautics industry reports total annual economic activity greater than $10.6 billion.
Keep in mind, these figures don’t include the military component, off-airport aviation/aerospace jobs, and jobs gaining efficiency from aviation.
Military jobs
Not surprisingly, the economic impact of the Oklahoma Army Air Guard, and Vance, Tinker and Altus Air Force Bases is significant. While Tinker remains the state’s largest employer at 56,901 workers generating $3.9 billion five years ago, the combined impact of all four military installations provides about 70,000 jobs, annual payroll of almost $4.7 billion, and total annual economic activity of nearly $19.3 billion.
Off-Airport aviation/aerospace jobs
Oklahoma has more than 1,100 aviation and aerospace companies and 870 are not located within the fence of an airport or military base.
These aviation/aerospace developers, maintainers, and suppliers fall into two categories – Direct or Indirect/Induced – and are engaged in some facet of the aviation or aerospace industry.
Together, the direct or indirect/induced companies employ about 59,000 workers and generate annual payroll of $3.4 billion while spending about $10.5 billion. The total economic activity for this part of the industry totals $13.9 billion.
Public investment in airports
Other than a $2 million appropriation for FY ’22, it’s been decades since OAC has received appropriated funds for its annual budget. The agency is largely funded through a 3.25% state excise tax on the sale of new and used airplanes. Additional revenues come from federal grants, aircraft registration fees, aviation fuel tax, license plates, and other miscellaneous receipts.
The OAC reports FY ’21 receipts of $6.361 million. Of these revenues, the agency reports, on average, 81% is spent on airport infrastructure projects across the state.
Over the last two decades, OAC reports investing $274 million in federal funds and $76.5 million in state funds.
The airport sponsor, usually the municipality where the airport is located, is required to contribute a local match for an infrastructure project. The local match is 5% for state funds and 10% for federal funds. The OAC may pay half the sponsor’s federal match.
In FY ’21, 57 airport construction projects were underway at 48 general aviation and commercial airports. Municipalities used FY ’20 CARES Act funding to cover all or part of the local match on 51 of the projects. Runways, taxiways, aprons, and lighting figured heavily among the various projects.
Education
A thriving aeronautics industry requires a workforce with the training and skills to keep the planes operational and an airport responding to the needs of its patrons.
To that end, Oklahoma is number one in the nation teaching the Aircraft Owners Pilots Association curriculum You Can Fly. The four-year program is offered at no cost to school districts committed to providing high quality aviation STEM pathways for students.
Five years ago, Ada Public Schools was the first district in the state to offer the new curriculum. Today, 15 Oklahoma school districts offer the course.
OAC Aerospace and Aviation Education Coordinator Paula Kedy was instrumental in getting the curriculum introduced in Ada while serving as the district’s Director of Academics & Instruction.
Kedy said about school districts looking at creating aerospace STEM pathways for students, “It is critical that schools begin offering course work that leads students to strong post-secondary programs and to careers in Oklahoma’s second largest industry.”
Kedy points to Tinker AFB, the American Airlines Maintenance facility, Boeing, and other large companies requiring a continuous source of skilled aerospace engineers and airframe and overhaul mechanics.
Encouraging young people to pursue careers in the aviation and aerospace industry, the OAC awards Aviation Education Program grants and contracts to various entities across the state. In FY21, 38 grants totaling $335,400 were awarded to public and private sector schools and organizations including 12 elementary or secondary schools, five career-technology centers or foundation, and five universities.
The grants ranged from $1,100 to $46,000. Economic Development OAC reports that many of our state’s largest employers heavily considered local airport availability during the site selection process. The agency points to Michelin in Ardmore, Seaboard Farms in Guymon, and Conoco-Phillips in Bartlesville citing immediate and ready access to their sites in those communities as significant reason they chose to locate or stay in those communities.
The 2017 study asked employers to rate from 1 to 10 the relative importance of various factors to the location of business in Oklahoma. Not surprisingly, labor and a trained workforce were rated 7.7 out of 10 by businesses completing the survey.
Highway access (7.6) and reasonable tax rates or tax incentives (7.4) were second and third. Tied for fourth at 7.2 out of 10 were a scheduled commercial service airport and a general aviation airport.
The study determined that many state employers have customers or suppliers from outside the state who fly in to do business with them. Similarly, employers who need to travel to other company locations also use the local airport. The market area for Oklahoma businesses is expanded with air transportation.
Air travelers: general/commercial
The OAC determined that about 440,000 visitors fly into Oklahoma each year on general aviation aircraft. Whether it’s business, personal, or leisure – these travelers often need ground transportation, lodging, meals, and other things that generate sales tax to the state and local community.
The Aeronautics Commission estimates the total economic impact is $253.2 million annually.
As for commercial travelers, records show 2.9 million boarding passengers in 2016. Of these, 1.2 million are estimated to be visitors to the Sooner state. That translates into almost 22,000 direct/indirect jobs and total economic activity of $2.2 billion.
The OAC is planning another economic impact study for 2023. It is anticipated that Oklahoma’s aeronautics industry will maintain its number two status behind oil and gas production and ahead of agriculture on the state’s list of largest industries.