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Thursday, March 16, 2006 | When members of the San Diego County Regional Airport Authority cite the need to replace Lindbergh Field, they frequently point to one figure: $94 billion dollars. That, they say, is how much money the region stands to lose if it doesn’t meet the airport’s future air-traffic demands.
Ninety-four billion dollars. That’s enough to pay the 2006 salaries of the New York Yankees and Boston Red Sox, solve San Diego’s pension crisis and buy a 230-acre island in Fiji – and still have $90 billion left over.
But if you ask Richard Carson, chairman of the economics department at University of California, San Diego, the estimate is a bit too high.
About $94 billion too high.
Carson contends that the 2001 economic analysis, used to demonstrate the need for a new regional airport, is flawed. Some parts are “just simply wrong,” he said, discounting the need to replace Lindbergh Field. Though he has briefed authority members and will speak to a board committee Monday, Carson said the authority has so far been “less than receptive” to his arguments.
“Which at some level has surprised me,” Carson said. “Usually … you get some people who know what’s going on, argue it out, go over assumptions and key things driving it. This has not been that sort of process. Their number is to be defended at all costs.”
As the airport authority draws closer to choosing a new airport site to put up for voter approval in November, Carson’s report is increasingly being cited by Lindbergh supporters as justification for keeping the current airport open.
By Carson’s interpretation, the analysis – crafted when the Port of San Diego ran the airport – incorrectly assumed that future constraints on air cargo at Lindbergh would force too many businesses out of San Diego.
Carson explains his interpretation of the authority analysis with this example: A San Diego company manufactures circuit boards. They ship them by air. Once Lindbergh’s cargo capacity maxes out, the analysis assumes the company wouldn’t try to find another airport to ship its cargo – it would simply leave San Diego.
“It’s an odd sort of assumption,” Carson said. “That’s not the sort of thing that would cause you to leave San Diego.”
Instead, he said, companies would stay put and simply find other airports to ship from: Ontario, LAX, even Dallas. San Diego companies are already doing that, he said.
“But they do have a lot of people convinced that this is the reality,” Carson said. “And that’s because they didn’t look at shipper behavior. They just presumed that these people would disappear if you couldn’t ship from Lindbergh.”
Seth Young, an associate professor in the college of business at Embry-Riddle Aeronautical University in Florida who has reviewed Carson’s findings for the authority, says the UCSD professor’s argument is “counter-intuitive.” He’ll also make a presentation to the authority Monday morning.
Companies and cities grow in places with good transportation access, Young said, contending that Carson is conflicting himself. If companies send cargo to other airports it leeches economic activity from San Diego, Young said.
“If you’re a free-market economy, you want to take advantage of the opportunity to grow,” Young said. “And all forecasts point to a huge potential for economic growth in San Diego County. It’s the county’s choice whether to take advantage of it.”
Carson has other issues with the airport authority’s analysis, questioning the need for a 12,000-foot runway, which is a half-mile longer than Lindbergh’s runway. Longer runways would make direct flights possible to Tokyo, London, Sydney and Cairo, according to the authority. Carson calls that “a pipe dream.” San Diego’s population would have to double to make direct flights to Tokyo profitable, Carson said.
But Young argued otherwise. Most forecasts show a “huge potential” for demand to flights from San Diego to the Pacific Rim, he said, particularly the Philippines.
Carson acknowledges the increasing number of passengers at Lindbergh, but says airlines could be forced to accommodate them with larger, regional aircraft if the authority auctioned off slots, as has been done at LaGuardia Airport in New York. That might increase prices – but not as much as building a new airport would.
“There clearly are some effects of managing the airport,” Carson said. “But cost-wise, almost everybody comes out better by not building a new airport.”
But auctioning slots and ignoring increasing demand will only hurt the area, Young said.
“He advocates reducing the amount of available capacity, forcing the airlines to bid for that capacity – adding the costs to the passenger,” he said. “At the end of the day, the citizens of San Diego have less frequent service and higher fares to fewer cities.”
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