Alaska Employment with and without MarkAir: Range of Potential Effects

Abstract

This report calculates the potential range of employment impacts on the Alaska economy from the removal of Markair and Markair Express from all its markets in Alaska and the Lower 48 states. This report presents 5 cases based on different assumptions about the two main determinants of response in each market area--proportion of flights replaced by other carriers and relative employment needed to replace these flights. The most important assumption underlying this analysis is that these air transport markets are large enough to accommodate all current competitors. If this is a valid assumption then the basis for the calculations of job loss is reasonable. However if there are too many competitors chasing too few customers in some markets, some competitors would eventually leave and employment would fall. Then current employment levels would be above sustainable levels. Since the alternatives described in the 5 cases used in this report represent sustainable market situations, the estimates of employment loss in the 5 cases would be inflated if the comparison case were not sustainable.