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New research shows no world cities split their hub airport

November 6, 2013 Airport No Comments Email Email

New research indicates that claims London can split its hub airport over multiple sites are without foundation. There is no evidence that any cities across the world have successfully done this, or that low-cost carriers, new aircraft or relocating alliances will change that.

Whilst Heathrow and others such as the London Mayor argue the only way to solve the UK’s lack of direct connections to long-haul emerging markets is via a larger hub airport, others such as Gatwick claim this is unnecessary, and that splitting demand across multiple airports would also work.displaymedia

The research, written by independent aviation consultants JLS Consulting, looked at cities around the world to see if there was any evidence that the split solution could work. It concludes emphatically that there are no successful versions of this model.

The JLS report shows that whilst short-haul, point to point services have seen rapid growth in the UK since the late 1990s, the same has not happened with long-haul services despite there being space at non-hub airports. Despite this already compelling evidence against the split-hub model, Heathrow commissioned today’s report to see if there was any evidence it could work in the future.

It concludes that there are numerous cities around the world with multiple airports but that, like London, they use those airports for different functions – and have, at most, one hub. New York has three network carriers but still only supports one hub airport, Newark. JFK operates as a point to point airport supported by New York’s huge urban population (circa 19 million). Tokyo attempted to split its hub airport into two and its connectivity and economy has suffered as a result. Paris has one hub (Charles de Gaulle) with Orly operating as a point to point airport. Moscow has no hub and consequently poor international connectivity.

The report argues that the complexity and financial difficulties of integrating carrier schedules to make use of transfer traffic explains why there are so few hub airports in the world, ‘let alone two competing hubs in the same city’.

Colin Matthews, Heathrow’s Chief Executive, said:

“This research shows that no world cities have successfully split demand across multiple hub airports. However convenient it would be to believe that London could be the first, we cannot bet the UK’s economic prosperity on wishful thinking. The UK can only benefit from improved long haul connections by building a bigger hub airport.”

The JLS study shows that low cost carriers (LCC) will not enable a second hub airport. Network airlines typically lose money when operating their short-haul feeder routes, so LCCs are unlikely to be willing to change their business models. Even when a network operator owns a LCC (eg IAG owns Vueling) it operates it as a stand-alone business, not a feeder network.

The report adds that moving an alliance to another airport would not be enough to create a second hub without a network carrier based there to make it work. After the EU/US ‘Open Skies’ agreement, Air France tried a Heathrow-Los Angeles service. But even this aviation giant could not make the route work as it was isolated from its own short-haul feed at its Paris hub base. And new aircraft like 787s will not suddenly invalidate the hub model, with IAG’s CEO, Willie Walsh, pointing out the vast majority of airlines ordering these aircraft are traditional hub operators. Norwegian’s new low cost, long-haul services from Gatwick use 787s but currently have ‘first-mover advantage’, which will soon disappear as network airlines take delivery of 787s.

Finally the report points out that the new emergent powers in aviation are all basing their strategies around hub airports. Dubai’s new airport will become the single home for Emirates, Doha’s new airport will replace the old one just as Hong Kong did with its new Chep Lap Kok airport, and Istanbul is planning the same approach with its new super-hub.

The IMF forecasts that over the next ten years, the eight largest emerging markets will account for more than half of global GDP growth. We know that countries trade twenty times as much with countries they have a frequent, direct flight to so links to those emerging economies will be vital to the UK’s prosperity.

The only way to support those links is through a hub airport. Hub airports use transfer passengers to support long haul routes that would not be viable with local demand alone. The size of the UK, and the fact that it only has one home carrier, BA, to supply these transfer passengers from its short haul network means we can only have one hub airport.

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