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Multi-Airport Systems in Era of Low-Cost Carriers. Dr. Richard de Neufville Professor of Systems Engineering and of Civil and Environmental Engineering Massachusetts Institute of Technology. Theme. No-frills airlines are developing a “parallel network” of travel - PowerPoint PPT Presentation
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Airport Systems Planning RdN
Multi-Airport Systems in Era of Low-Cost Carriers
Dr. Richard de Neufville
Professor of Systems Engineering and of
Civil and Environmental Engineering
Massachusetts Institute of Technology
Airport Systems Planning RdN
Theme
No-frills airlines are developing a “parallel network” of travel
“network choice” (rather than “airport choice”) may determine traffic in multi-airport systems
As low-cost carriers grow (and majors shrink) traffic may shift to second airports (e.g: from Boston to Providence)
Airport Systems Planning RdN
What is a Multi-Airport System?
the significant airports serving transport in a metropolitan region, without regard to ownership or political control Ex: Boston, Providence, Manchester
Discussion This is reality for travellers Contrasts with ACI focus on ownership
Airport Systems Planning RdN
Planning Issue
Many ‘mistakes’ in planning multi-airport systems Washington/Dulles, London/Stansted,
Osaka/Kansai, Montreal/Mirabel, etc.
Failure to appreciate traffic concentration at primary airports
… Because planners/forecasters using wrong mental model
Airport Systems Planning RdN
What drives traffic allocation in Multi-Airport System?
Airline competition has been primaryS-shaped market share/frequency share
Drives airlines to Match flights => Allocate flights to major markets Concentrate Traffic at primary airports
Frequency Share
MarketShare
Airport Systems Planning RdN
Right model: “Concentration” not “Catchment Areas”
Concentration is standard urban phenomenon e.g.: financial, jewelry, etc. districts
Driven by what suppliers offerCustomers choose which location
(airport) depending on where they find what they need -- not just most convenient facility
Airport Systems Planning RdN
“Concentration” persists --until high level of local traffic
When local originating traffic high…More flights add little at major airportsAirlines place flights at second airportsThere appears to be a ‘threshold”…
Currently ~ 12 million originations/year
Note: higher as aircraft larger
Airport Systems Planning RdN
Metropolitan areas with significant multi-airport systems
Metropolitan Multi-AirportRegion For Region Originating System
London 120 47 YesTokyo 84 36 YesLos Angeles 79 34 YesNew York 87 33 YesParis 72 28 YesChicago 94 26 YesMiami 53 20 YesSan Francisco 54 20 YesHong Kong 47 19 YesWashington 51 18 YesSeoul 37 17 Yes
Traffic in Millions
Airport Systems Planning RdN
Metropolitan areas with significant multi-airport systems
Metropolitan Multi-AirportRegion For Region Originating System
Osaka 35 15 YesBoston 32 15 YesAtlanta 79 14Las Vegas 37 14Dallas 59 13 YesShanghai 30 13 YesFrankfurt 51 13 YesSao Paulo 25 12 YesHouston 42 12 YesMilan 27 12 YesTaipei 26 12 Yes
Traffic in Millions
Airport Systems Planning RdN
Major exceptions to rule: technical or political
Until recently, major exceptions to concentration rule were:
Technical -- runways too short Belfast, Belo Horizonte, Buenos Aires,
Rio de Janeiro, Taipei
Political -- or military... Berlin, Dusseldorf/Bonn, Glasgow, Moscow
Airport Systems Planning RdN
New Reality: No-frill airlinessetting up “parallel network”Low-cost carriers “parallel” majorsMajor fare distinctionsTicket distribution separate
Internet direct to users, ‘no’ travel agents
Parallel service between cities Providence/Baltimore not Boston/Washington
‘No’ interlining of bags, tickets‘Not’ in Reservation systems
Airport Systems Planning RdN
New Reality: No-frills choose different airports
Southwest, Westjet (Canada), Ryanair and Easyjet (UK) require: Cheap properties, no Taj Mahals (compare
San Francisco/International and Oakland; London/Gatwick and Luton)
Low congestion and delays Flexible work force
They find this at aggressive, ‘hungry’ airports -- not in major facilities
Airport Systems Planning RdN
New Reality: US Network of Low-Cost Carrier Airports
Metropolitan Secondary Low-CostRegion Airport Carrier
Boston Manchester SouthwestBoston Providence SouthwestDallas/Ft Worth Love SouthwestHouston Hobby SouthwestLos Angeles Long Beach Jet BlueMiami Ft Lauderdale SouthwestNew York Islip SouthwestSan Francisco Oakland SouthwestToronto Hamilton WestjetVancover Abbotsford Westjet
Airport Systems Planning RdN
New Reality: Europe Network of Low-Cost Carrier Airports
Metropolitan Secondary Low-CostRegion Airport Carrier
Brussels Charleroi RyanairCopenhagen Malmo RyanairDusseldorf Koln/Bonn EasyjetFrankfurt Hahn RyanairGlasgow Prestwick RyanairHamburg Lubeck RyanairLondon Luton EasyjetLondon Stansted RyanairManchester Liverpool EasyjetMilan Linate EasyjetMilan Orio al Serio RyanairOslo Torp RyanairParis Beauvais RyanairRome Ciampino Easyjet + RyanStockholm Skvasta Ryanair
Airport Systems Planning RdN
Multi-Airport Systemsin Brazil
Internat'l Distant Airport Domestic Close-in AirportMetropolitan
Area Name Traffic
Millions
Name Traffic
Millions
Sao Paulo Garulhos 13.0 Congonhas 11.7
Rio de Janeiro Galeao 6.0 Santos Dumont 4.9
Belo Horizonte Confins 0.8 Pampulha 2.5
Source: INFRAERO, 2002; Rabbani, 2002
Airport Systems Planning RdN
Importance of Parallel Networkof close-in Brazilian airports
Airport Pair Passengers,
1000s
Rank
Congonhas Santos Dumont 1461 1
Congonhas Brasilia 596 2
Congonhas Pampulha 565 3
Congonhas Curitiba 551 4
Congonhas Porto Allegre 365 5
Garulhos Salvador 364 6
Santos Dumont Brasilia 325 7
Santos Dumont Pampulha 312 8
Source: INFRAERO, 2002, Rabbani, 2002
Airport Systems Planning RdN
Implications for modelling future of second airports
A new driver for second airports... Low-cost carriers often‘not’ competing at big
airports Frequency competition does not drive growth
pattern of secondary airports
Competition between networks may be primary…
… followed by catchment area model of airport choice
Airport Systems Planning RdN
Implications for future of second airports
No-frills airlines are becoming ‘major’ Southwest 4th largest airline in world (pax) Market Cap ~ 12billion $ > any other pax airline Ryanair Market Cap greater than British Airways
Majors are shrinking (UAL, USAir, etc.)Implies that Primary airports will lose
significant traffic to second airportsThis is already happening!!!
Airport Systems Planning RdN
Southwest entry in Boston market grew second airports
Figure 1: New England traffic growth shifted from Boston/Loganto Regional Airports along with growth
of Southwest at Providence and Manchester (NH)
P age 3
R eg io n a l A irp o rts
23 %
(+ 0 .7M )
L o g an
77 %
(+ 2 .3 M )R eg io n a l A irp o rts
76 %
(+ 7 .2M )
L o g an24 %
(+ 2 .3M )
1990–1996 1996–2000
+2 .9 M illio nA ir P assen g ers
+2 .9 M illio nA ir P assen g ers
+9 .5 M illio nA ir P assen g ers
+9 .5 M illio nA ir P assen g ers
D is trib u tio n o f N ew E n g lan d P assen g er G row th
R eg iona l a irpo rts inc lude P rov idence , M ancheste r, W orces te r, B an gor, B u rling ton , H a rtfo rd , N ew H aven , and P o rtland .
S ource : A irpo rt R eco rds and U S D O T , F o rm 41 schedu les .
Since 1996, the Regional Airports Have Captured More than 75% of the Region’s Air Passenger Growth
Figure 4
Source: Louis Berger, New England Regional Aviation System Plan materials
Airport Systems Planning RdN
Market Share of Boston/Logan is in decline
F i g u r e 2 : T h e B o s t o n / L o g a n t r a f f i c s h a r e d r o p p e d b y a q u a r t e r o v e r t h e p a s t 2 0y e a r s ; h a l f o f t h i s o c c u r r e d w i t h t h e S o u t h w e s t g r o w t h i n t h e l a t e 1 9 9 0 s a tP r o v i d e n c e a n d M a n c h e s t e r ( N H )
P a g e 4
5 0 %
6 0 %
7 0 %
8 0 %
'8 0 ' 8 1 '8 2 '8 3 ' 8 4 '8 5 ' 8 6 '8 7 '8 8 ' 8 9 '9 0 '9 1 ' 9 2 '9 3 '9 4 ' 9 5 '9 6 ' 9 7 '9 8 '9 9 ' 0 0
L o g a n ' s S h a r e o f N e w E n g l a n d A i r P a s s e n g e r s
N o t e : I n c l u d e s e n p l a n e d p a s s e n g e r s a t L o g a n , H a r t f o r d / B r a d l e y , T . F . G r e e n / P r o v i d e n c e , M a n c h e s t e r , P o r t l a n d , B u r l i n g t o n , B a n g o r , T w e e d N e w H a v e n , a n d W o r c e s t e r .
S o u r c e : U S D O T , F o r m 4 1 a n d P a r t 2 9 8 / C . A i r p o r t r e c o r d s f o r L o g a n a n d v a r i o u s r e g io n a l a i r p o r t s .
7 8 %
5 9 %
T h e R egio n is Less R elian t o n Lo gan A irp o rtFigu re 5
Source: Louis Berger New England Regional Aviation System Plan
The 2003 Share is about 63%
Airport Systems Planning RdN
Summary
A new, parallel air transport network is emerging to compete with majors
This low-cost carrier network may become a major feature of industry
It implies growth and importance of low-cost second airports throughout North America, Europe -- and perhaps elsewhere
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