Nigel Dennis

Airline hub operations in Europe

Abstract Air transport deregulation within the European Union is expected to make hubbing an increasingly important strategy for European airlines. The optimal geographical location for a single European hub is found to be Paris or Brussels. However, KLM at Amsterdam and Lufthansa at Frankfurt are shown to be the two major airlines providing the most effective hubbing operations. Despite their large networks, British Airways at London Heathrow and Air France at Paris Charles de Gaulle (CDG) have lower connectivity. Amsterdam and Paris are the airports with the greatest scope for increasing capacity, although there is also potential for certain regional hubs to develop.

Scheduling strategies for airline hub operations

This paper aims to develop the theoretical principles behind the scheduling of waves of flights for connection purposes. A number of issues are addressed regarding the most effective way to meet the needs of the market while minimizing the negative impact on costs that can arise from peaking of activity and poor utilization of aircraft and crews. These will then be demonstrated with reference to specific examples of hub operations from the USA and Europe.

Scheduling issues and network strategies for international airline alliances

An efficient network structure with co-ordinated schedules is necessary to realise the potential of an international airline alliance. This paper considers the scheduling issues that particularly affect alliances including multiple hub operations, other interfaces between routes, airport slot and terminal allocations and the through working of aircraft. Key principles are identified and illustrated with examples from current airline operations. Comparisons are made of the effectiveness of the major alliance groupings in the European arena and strategies to optimise the coverage and connectivity of the combined networks are advanced.

Developments of hubbing at European airports

Passenger growth at many of Europes airports is being driven by expansion of connecting traffic. The major airlines are increasing the effectiveness of their hubbing activities through improved flight scheduling, commercial partnerships and alliances, the utilisation of regional jet aircraft and high speed rail feeders. This article examines these key developments and considers the implications for different airports.

Stimulation or Saturation? : Perspectives on European Low-Cost Airline Market and Prospects for Growth

The European low-cost carriers have enjoyed dramatic growth in recent years and have substantially altered the network of short-haul air services provided. Demand for low-cost services has proved more volatile than in the United States, however, and there are incipient signs that the carriers’ ability to stimulate traffic is diminishing. Many new entrants have jumped on the bandwagon, and the traditional airlines have started to fight back. An analysis of different routes from London shows that the low-cost carriers have been much more successful in some markets than others. The major airlines remain dominant in sectors involving their principal hub airports whereas thin routes within northern Europe have shown little growth from low-cost carrier entry, some remaining the preserve of regional carriers. The low-cost airlines have performed best on dense routes not involving major airports and leisure routes between northern and southern Europe. Competitive strategies that are examined include the ability of low-cost airlines to attract traffic to secondary and regional airports that were previously underutilized. It is shown that on some routes from major cities, secondary airports are now handling a majority of the local passengers. However, the ability of airports to grow beyond the traffic potential of their own local catchment area diminishes as more locations gain low-cost service. Although some untapped opportunities may remain in countries such as France and for services with smaller aircraft, new routes are tending to dilute existing demand. The focus is therefore likely to turn to more head-to-head competition in the denser markets.

Long-term route traffic forecasts and flight schedule pattern for a medium-sized European airport

This paper develops a methodology for assessing the future route network and flight schedule at a medium-sized European airport. The starting point is the existing origin and destination demand from the base airport across the world. This is expanded using growth rates by country or region for the period up to year 2015. The future origin and destination demand is then converted into route traffic, subject to a threshold for direct service. Where demand falls below this level, traffic is reallocated via various appropriate hubs. A model of frequency and aircraft size is applied to estimate the future air service on each route and a schedule created, allocating these flights to specific times of day. The scenario where the base airport operates as a hub is then investigated. This involves identifying a suitable hub model, considering geographical and competitive issues. The origin and destination demand is increased, resulting in an enlarged network of routes. Flights are then scheduled within the constraints of an optimal wave pattern. The outputs are of considerable interest in long-term airport planning and also offer an insight into future airline network strategies and opportunities.

Airline franchising in Europe: benefits and disbenefits to airlines and consumers

Franchising has become an increasingly important commercial strategy for Europes airlines as they seek to strengthen their position in the deregulated marketplace. This paper examines the practice of airline franchising in Europe since its inauguration by British Airways in 1993 and its subsequent adoption by most of the other major carriers. The advantages and disadvantages for both franchisor and franchisee airlines are investigated, drawing upon evidence from the operation of scheduled air services in Europe. Consideration is then given to the benefits claimed for consumers and the effect of franchising on competition. A generally positive picture arises, particularly in international markets. There are however incipient signs that where franchising leads to one major carrier becoming too dominant in its domestic market, the scope for competition and new entry is becoming suppressed.

Analysis of recent trends in bus and coach safety in Britain

Abstract We examine in detail trends from 1966 to 1990 and the fitting of statistical models to assess whether significant changes have taken place in casualty rates since local bus deregulation in 1986. The major source of data is the ‘Stats 19’ collated from police reports by the Department of Transport. The evidence indicates that no significant change in casualty rates for bus and coach occupants (defined as those killed or seriously injured) has occurred since local bus deregulation, although the previous trend of reduction in fatality rates has not been maintained. International comparisons have been made between Britain and a sample of other West European countries. Britain appears to have a higher occupant fatality rate. However, other countries′ data do not always include casualties to bus and coach occupants other than those in which vehicular collisions occur. Better comparative data is available for accidents involving buses and coaches with other road users, notably for Britain and Germany. These suggest that such accidents tend to reflect the national pattern of road casualty rates — for example, Germany has a higher level of collisions between buses and coaches, and other road vehicles, while Britain has a relatively high incidence of casualties involving pedestrians. Differences in accident rates between Britain and other European countries and the extent to which they reflect real differences, as distinct from those due to differences in recording of data, are evaluated, along with policy implications.

A tale of two cities: The impact of airline mergers and consolidation at London and New York

This paper considers the changes to airline networks, service patterns, and competition that have taken place as a result of recent airline mergers on both sides of the North Atlantic as well as through transatlantic alliances. Capacity, frequency and the competitive position are studied at London and New York with the use of schedule data within different markets in which measures of market concentration are evaluated. International Civil Aviation Organization data is employed to examine load factors on international routes, and UK Civil Aviation Authority data to consider the distribution of traffic between airports in London. It is shown that the effectiveness of the hubs has increased, with enhanced efficiency for surviving airlines, through fewer competitors, an enlarged network and greater control of capacity. Potential concerns are identified however, regarding passenger choice, pricing, and service options that suggest the industry is moving toward an oligopoly. Smaller cities are also seen to be the losers from consolidation with slot divestments favoring increased service in the dense markets, with many regional links being axed altogether. The paper supplements the literature on airline consolidation, with a particular focus on the two biggest markets in the world—London and New York—which demonstrate some similar but also some different issues. Both airline network impacts and choice, and service for local consumers are considered.

Comparative Analysis of Regional Airline Industry in Europe and North America and Some Insight into Current Developments

The regional airline industry in Europe and North America is compared, and through a combination of data analysis and case studies, some of the current changes taking place are investigated. North American regionals are shown to have longer stage lengths, lower unit costs, and higher load factors than their European counterparts. Turboprops remain popular in Europe, but 50-seat jets still dominate in the United States, despite being considered inefficient because of high unit costs and pressure on yields. The bankruptcy of most U.S. legacy carriers has led to renegotiation of contracts for regional flying, with prices being driven down. European regionals face different problems with rail competition, capacity constraints at hub airports, and incursion by low-cost airlines. The differences in the cost structures of BA Connect, British Airways’ former regional arm, and Flybe, operating a new hybrid format, are interpreted, and it is shown that Flybe has much lower labor costs. Alternative business models are then discussed. In the United States, the most popular is the sale of capacity to the majors, whereas in Europe many operate on a quasi-independent franchise basis. It is concluded that European regionals require more action to reduce costs, whereas U.S. regionals will increasingly have to take more of the risk from their major carrier partners. A renewed enthusiasm for turboprops on short sectors is becoming apparent, and the European markets in particular are likely to see a shift to larger aircraft at lower frequency. This puts at risk the schedule convenience and network connections valued by business passengers.