Des Moines is the capital of Iowa and has a strong, diversified economy. The region is also a major center of the U.S. insurance industry and is known for its global financial services and publishing business base. It is included as a case study because of that consideration.
Regional Economic Strengths
The region’s economy is anchored by several large employment sectors. As the capital of Iowa, the region has a significant public sector presence, which includes the large number of workers associated with education, especially because of the presence of Iowa State University in Ames. In addition to the concentration of insurance and financial services in the region, other key industries include advanced manufacturing, agricultural-bioscience, data centers, logistics, and technology. The region’s population and employment have grown moderately since 2008, but far faster than the Iowa statewide averages. The region’s per capita income is also higher than the Iowa average.
| 2008 | 2019 | Change # | Change % | |
|---|---|---|---|---|
| Population (000s) | 761 | 878 | 117 | 15% |
| Total Employment (000s) | 533 | 604 | 71 | 13% |
| Income per Capita ($) | $40,919 | $53,249 | $12,330 | 30% |
| Number of Establishments | 20 | 27 | 7 | 36% |
Overview of the Airport and Its Services
Des Moines International Airport (DSM) is the largest airport in Iowa. DSM estimates that its catchment area encompasses a population base of 3.4 million annual passengers. DSM’s air service goals focus on underserved markets. The focus for larger carriers is upgauging and increasing frequencies on existing routes.
From 2008 to 2019, origin and destination (O&D) traffic rose by 75 percent. The number of available seats rose by 452,862 (34 percent), equivalent to an extra 1,200 seats per day. In 2019, the airport set a new annual passenger record: 2.9 million people traveled through the airport.
Connectivity
The growth in capacity, specifically to major national hubs, has enabled continued improvement in air connectivity. Between 2008 and 2019, the Des Moines region’s connectivity grew by 36 percent (or an annual average rate of 2.8 percent). The trend in connectivity at DSM is highly correlated with growth in total seat capacity. DSM increased its air service to national hubs like Charlotte and Philadelphia, facilitating onward connections to a larger number of markets and regions.
Analysis of Changes in Employment and Air Service
DSM’s O&D traffic is highly correlated with employment. The graph summarizes the relationship between changes in total O&D traffic and employment in the finance, insurance, and real estate (FIRE) sectors. As employment increases, total O&D increases. The chart, however, does not prove causation; that is, it is not evident whether rising total employment levels lead to more air traffic or vice versa.
Communicating the Airport’s Economic Impact
DSM has used economic impact studies to build support for the airport itself. It allows them to share the value and impact an airport brings. DSM works with stakeholders to help build their story and leverage relationships. DSM noted that economic impact studies—especially those concerning the potential impact associated with a new route (e.g., service to a new hub)—can produce useful and insightful information.
The airport and regional stakeholders raised concerns when talking about how to persuade stakeholders of the airport’s value to the regional economy. One concern was the amount of time an economic impact study takes, and whether there might be a more efficient way to capture information and better understand it. Economic impact studies also need to better show the links between air service and the business community. Uncovering and clarifying that story would be useful.
Stakeholder Perspectives on Contributions of Air Service
One key stakeholder that represents the interests of the region’s business community and economic development is the Greater Des Moines Partnership (the Partnership). Its efforts to recruit companies and people to work and live in Des Moines rely in part on the range of nonstop flights available. There is substantial business travel within the finance and technology sector, and accessibility is of the utmost importance. With over 80 entities in the insurance field alone, connectivity is very important for business operations.
While DSM does not now offer nonstop international service, it has connectivity options through major hubs such as Chicago O’Hare International Airport (ORD), Hartsfield-Jackson Atlanta International Airport (ATL), Dallas Fort Worth International Airport (DFW), Denver International Airport (DEN), Charlotte Douglas International Airport (CLT), and Philadelphia International Airport (PHL). The Partnership recognizes that growth in air service metrics (passengers, nonstop flights) gives them strong evidence of regional growth and personal travel. The Partnership would like to see further additions to the number of markets served. Regional economic goals are developed by engaging frequently with industry partners and other stakeholders. The Partnership works with chambers of commerce, counties, and cities to advance initiatives and develop goals that serve the community. It measures its progress with the region’s economic structure, health, and vitality by capital investment, job creation, and new business growth. Showcasing DSM’s connectivity is a useful marketing tool to entice companies to locate in the region.