Relatively Low International Air Traffic at DIA: Part II

In my September July 13th and September 5th blog entries I discussed the fact that Denver International Airport (DIA) (the 5th busiest airport in the U.S.) “punches above Metro Denver’s population weight” (the 19th largest consolidated metropolitan statistical area (CMSA)) in the United States). However, in my September 5th entry I also pointed out that, domestically, DIA is the 4th busiest airport but for international passengers DIA “punches below Denver’s population weight” because it is only the 22nd busiest airport for international passenger originations. In this blog entry I explore the reasons underlying this dearth of international passengers at DIA.

To validate the data cited earlier on DIA international originations, I reviewed the U.S. Department of Commerce, Office of Tourism and Travel Industries (http://tinet.ita.doc.gov/ ) data on overseas visitors to select U.S. cities. This data is based on the Survey of International Air Travelers (In-Flight Survey) Program and the Visitor Arrivals Program (I-94 Form). According to this data, Denver is the 28th most popular City in the U.S. for international visitors.

I theorize that there are four primary interrelated factors which drive metro areas’ international air traffic density:
1) the location of metro areas within the United States relative to international destinations;
2) the absolute number of U.S. metro area residents with ethnic ties to overseas destinations;
3) the amount of international business linkages between overseas destinations and U.S. metro areas;
4) the amount of tourism between domestic metro areas and overseas destinations.

One of the reasons Denver ranks so high for domestic air traffic is because it is centrally located in the western United States between the large cities of the west coast and the mid-west making it an ideal domestic air hub. However, from an international air traffic perspective, hub cities in the United States tend to be located on the U.S. coasts, closes to the international destinations they serve as a hub for. For example, New York is a large hub for transatlantic European flights, Los Angeles for transpacific destinations and Miami for flights to Latin America, the Caribbean and South America.

Additionally, cities with large absolute numbers of ethnic residents with strong ties back to ancestral homelands have a ready made demand for direct international flights and are likely to have high international flight densities. The City of Denver which is a reasonable proxy for the Metro Denver area as a whole, has the 24th highest percent of foreign born population among U.S. cities. See Table 1 below.

Given that the Denver Metro Area is the 19th largest area in overall population, Denver does not have a large absolute number of foreign born residents driving demand for international flights compared to larger metro areas with higher percentages of foreign born populations.

Table 1: Large Cities Ranked by Percent of Foreign-Born Population in 2002



(Source: http://usgovinfo.about.com/cs/censusstatistic/a/foreignborn.htm)

Another key factor in driving international air traffic to U.S. metro areas is international business linkages between overseas destinations and U.S. metro areas. For example, New York City’s status as a global financial capital clearly drives demand for international air flights to and from New York. One possible proxy for measuring international business linkages is the size and number of multi-national corporations with headquarters located in an area. The State of Colorado is ranked 13th highest among the states in terms of Fortune 500 companies headquartered in the state (most of the Fortune 500 companies in Colorado are in the Denver Metro Area).

Table 2: States Ranked by Number of Fortune 500 Headquarters in 2007



(Source: http://money.cnn.com/magazines/fortune/fortune500/2007/states/CA.html )

Although I have not found good hard data on Denver’s ranking as an international tourist destination compared to other U.S. metro areas, some broad conclusions can be drawn. With its ski industry and year round alpine recreation amenities, Metro Denver and Colorado have a substantial tourism industry. However, Metro Denver is not as big a draw as coastal metro areas in states like California, New York, Florida, and Massachusetts.

Given, Denver’s land locked geographic position in the Western United States, its relatively low absolute number of foreign born residents compared to larger cities and other factors cited above, it is not too surprising that Denver has a relatively low density of international air traffic. There is probably not a “magic bullet” for Denver to rapidly increase the number of international destinations that are served by DIA. Instead, over time, as the Denver economy grows and develops additional international linkages I predict there will be a slow but steady incremental gain in international air traffic ultimately resulting in direct international flights between Denver and the Pacific Rim and additional cities around the world.

If I am missing any of the key reasons for DIA’s relatively low international flight density please send me a comment or email.