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Old 17th May 2011, 11:58
  #1080 (permalink)  
racedo
 
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buy in non-local produce and move activity to outside towns and cities... In the game that is European business I think Ryanair is doing what it should to survive and play the game. That is the world we live in... I'm sure the representatives of these local councils wouldn't give out money unless it meant tangible returns.
There have I believe been a number of studies done which looked at investment in areas to provide jobs from EU investment money, I think it was something along the lines that a €1 million investment would provide 25-30 jobs in the year of the investment and disappear as soon as funding stops.

In an airports case a €1 million investment in route support would likely bring in 100,000 passengers a year and then it started to get interesting.

Their is a Tourism Income Multiplier which takes estimates of spend by a incoming tourist and gross this up based on what the tourist is likely to do.

Best example seen was Ryanair going into an area with few previous flights.....the airport jobs were easy to know about as that was direct. Taking account that tourists needed somewhere to stay where no International hotel chains, it meant locally owned accommodation was used adding to local jobs, similar in restaurants etc but the restaurants used local produce which meant the tourist spend was disappated within the local economy rather than being sent as profits to elsewhere.

Based on 100,000 into an area on a low average spend per person of €200 per stay this add €20 million into local economy, once you start applying the multiplier a number of times than this €20 million sales moves up quite substantially plus taking account of VAT etc then Governments generally end up with well in excess of the €1 million investment in developing new routes.

This doesn't take into account that these 100,000 people may have created the equivalent of 200 Full time equivalent jobs throughout the year but in an area of high unemployment IF you take account that you will make savings on Unemployment benefit when people are working plus gaining in VAT on fuel / accomodation etc it would be unlikely to produce less than the €1 million invested.
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