Transcript Current Status of the Air Transport Industry

Current Status of the
Airport / Airline Industry
Dr. Richard de Neufville
Professor of Systems Engineering and
Civil and Environmental Engineering
Massachusetts Institute of Technology
Airport Systems Planning & Design / RdN 
Current Status of the
Air Transport Industry
 Objective: To define
 current
situation
 major new factors
 Topics:
 Airline
and Airport Rankings
 Current Trends
• Shake-up / Disappearance of Network Airlines
• Coming and Going of Transfer Hubs
• Commercialization / Privatization of Airports
Airport Systems Planning & Design / RdN 
Principal drivers of air
transportation industry
 Long-term 6% annual decrease in air fares:

Driving comparable annual worldwide traffic growth
 Commercialization:

market economy management replaces government ownership
and control in a regulated environment
 Low-cost carriers

Southwest, AirTran, Jet Blue, Westjet, Ryanair, easyjet, etc
 Globalization:

transnational airline alliances and airport groups
 Technical innovation:

e-commerce, RJs, A380 NLA, satellite-based navigation
Airport Systems Planning & Design / RdN 
Major Recent Events
 Disappearance of Major Airlines

TWA, Swissair, Sabena
 Mergers of


Japan Airlines and Japan Air Systems (2002)
Air France and KLM (Sept 04)
 Major Bankruptcies

United, US Airways, Air Canada – others near!
 Surge by Low-Cost Passenger Carriers

Air Tran, Ryanair, easyjet
 Surge by Chinese Carriers

Cathay Pacific, China Airlines, EVA
 … also by Fedex
Airport Systems Planning & Design / RdN 
World Traffic, (Pax-Km x 109)
World and IATA
Year
Pax-km, Billions
IATA
Annual Growth %
IATA
World share, % IATA
World
2003
2704
3236
83.5
(0.4)
1
2002
2770
3196
86
(1)
(1)
2001
2652
2912
91
(4)
(4)
2000
2757
3018
91
4
(2)
1999
2657
3074
86
6
6
1998
2514
2888
87
7
4
1990
1600
2186
73
18
8
1987
1042
1763
59
9
8
1982
712
1263
56
4
4
1977
600
1036
58
Source: IATA World Air Transport Statistics
Note: Change in Series; now includes charter travel
Airport Systems Planning & Design / RdN 
IATA Members’ Traffic,
Revenues, Yield, and CPI
Traffic
Revenues
Yield
Inflation
250
Percent of 1991
200
150
100
50
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
19
91
0
Source: IATA World Air Transport Statistics
Airport Systems Planning & Design / RdN 
Interpretation of Trends
 Over past 13 years…
 Yields
(revenues/unit distance) have
dropped about 20%
 While inflation has risen about 50%
 So: costs on a constant basis cut in half
 Thus: traffic doubled
 Implying price elasticity about -1.3 > -1.0
 So total revenues grow as price drops
Airport Systems Planning & Design / RdN 
Airports by millions of pax., 2003
(IATA data; US- Bold, hubs- italics)
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Airline
Atlanta
Chicago / OHare
London / Heathrow
Tokyo / Haneda
Los Angeles / Internatl
Dallas / Ft. Worth
Frankfurt / Main
Paris / de Gaulle
Amsterdam / Schiphol
Denver / International
Phoenix
Las Vegas
Madrid
Houston / Bush
Minneapolis / St. Paul
Detroit / Metro
New York / Kennedy
London / Gatwick
Miami / International
New York / Newark
2003
78.8
69.4
63.2
63.2
55.0
53.2
48.1
47.9
39.8
37.5
37.4
36.3
35.4
34.1
33.2
32.7
31.7
29.9
29.6
29.6
Millions of Passengers
2002
2001
2000
76.6
75.9
80.2
66.5
66.8
72.1
63.0
60.7
64.6
61.1
58.7
56.4
56.2
61.0
68.5
52.8
55.2
60.7
48.1
48.6
49.4
48.1
48.0
48.2
40.6
39.5
39.6
35.7
36.1
38.7
35.6
35.5
35.9
35.0
35.2
36.9
33.7
34.0
32.8
34.4
34.8
35.2
32.6
35.2
36.7
32.4
32.3
35.5
28.9
29.4
32.8
29.5
31.2
32.1
30.1
31.7
33.6
29.0
30.5
34.2
1993
47.8
65.1
47.6
41.5
47.8
49.7
31.9
25.7
20.1
32.6
23.5
22.5
17.3
20.3
23.4
24.2
26.8
20.1
28.7
25.8
Annual %
1993-2003
6.5
0.7
3.3
5.2
1.5
0.7
5.1
8.6
9.8
1.5
5.9
6.1
10.5
6.8
4.2
3.5
1.8
4.9
0.3
1.5
Airport Systems Planning & Design / RdN 
Airports by millions of pax., 2003
(IATA data; US- Bold, hubs- italics)
 In
2003, airport traffic mostly stagnated
 Big
drops in
• Asian market (Hong Kong, Beijing, Singapore,
Tokyo – also Hawaii and San Francisco)
• St Louis, Pittsburgh and Zurich as hubs close
 Several
airports have fallen lower in rankings
(e.g. due to failures of TWA, Swiss, Sabena)
Airport Systems Planning & Design / RdN 
Changes in Transfer Hubs
 Big changes in recent years
 New Hubs
Big: Paris/de Gaulle, Amsterdam, Munich
 Small: London/Stansted

 “Close” of old hubs
Pittsburgh (US shrinking to Philadelphia)
 St Louis
(TWA merged out of existence)
 Zurich
(collapse of Swissair)

Airport Systems Planning & Design / RdN 
Airports by millions of pax., 2003
(IATA data; US- Bold, hubs- italics)
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Bangkok
San Francisco / Internatl
Orlando / International
Seattle / Tacoma
Hong Kong / C L K
Rome / Fuimicino
Toronto / Pearson
Philadelphia
Beijing / Pudong
Sydney
Munich
Tokyo / Narita
Singapore
Charlotte
Boston / Logan
Barcelona
New York / LaGuardia
Paris / Orly
Mexico City
Cincinnati
29.1
28.8
27.3
26.7
26.4
25.8
24.7
24.7
24.4
24.2
24.0
23.5
23.1
23.1
22.8
22.5
22.5
22.4
21.7
21.2
30.5
30.7
26.7
26.7
33.5
25.0
25.9
24.4
27.2
23.4
23.0
25.8
27.4
23.6
22.6
21.2
21.3
23.1
20.3
20.9
30.6
34.6
28.2
27.0
32.6
25.6
28.0
23.9
24.2
24.3
23.6
25.4
28.1
23.2
24.2
20.7
21.9
23.0
20.6
17.3
29.6
41.2
30.8
28.4
32.7
25.9
28.8
24.9
21.7
23.5
23.1
27.4
28.6
23.1
27.4
19.8
25.2
25.4
20.7
22.5
17.1
32.0
21.5
18.8
24.4
18.8
20.5
16.5
*
16.6
12.5
20.0
18.8
17.3
24.0
*
19.8
25.3
*
12.3
7.0
-1.0
2.7
4.2
0.8
3.7
2.0
5.0
4.6
9.2
1.8
2.3
3.4
-0.5
1.4
-1.1
7.2
Airport Systems Planning & Design / RdN 
Airports by millions of pax., 2003
(IATA data; US- Bold, hubs- italics)
41
42
43
44
45
46
47
48
49
50
St. Louis / Lambert
Seoul/Gimpo
Washington/Baltimore
Manchester (UK)
Honolulu
Palma de Mallorca
Osaka / Itami
Fukuoka
London/Stansted
Jakarta
20.4
19.8
19.7
19.5
19.4
19.1
18.8
18.8
18.7
18.6
25.6
21.0
19.0
18.6
21.1
17.8
*
*
*
*
26.7
22.0
*
19.5
21.1
19.2
19.3
*
*
*
30.5
36.7
*
Zurich
Washington / Dulles
Brussels
Pittsburgh
Washington / Reagan
17.0
17.0
15.2
14.2
14.2
17.7
21.0
17.9
19.6
19.9
22.7
20.0
21.6
19.8
18.0
22.7
20.5
*
*
*
19.9
22.6
*
12.8
22.0
12.4
*
*
*
*
0.3
-1.2
13.1
*
*
18.5
16.1
3.0
5.2
-1.2
5.4
-2.3
-1.2
Airport Systems Planning & Design / RdN 
Current Major Airport Projects
 Bangkok,
Guangzhou
Major New Airports
 Nagoya/Chubu
Airport in the Sea
 Osaka/Kansai
New Island for 2nd runway
 Toronto
Buildings, Runways, etc
 London/HRW
Terminal 5 ($8 billion)
 Washington/Dulles
Mid-field Pax Bldg, etc
 Madrid ; Miami/Intnatl
Runway, Buildings
 NY / JFK; SFO; Singapore;
Rail transit
 Boston/Logan ;
Pax Buildings, Roads
Airport Systems Planning & Design / RdN 
Airline Rankings
(Pax-Km, billions)
Airline
American
United
Delta
Northwest
British
Air France
Lufthansa
Continental
Southwest
JAL
Qantas
Singapore
USAirways
Air Canada
KLM
ANA
Thai
Cathay Pacific
2003
193
167
144
110
100
99
97
91
77
76
69
64
61
59
57
52
45
43
2002
196
176
153
116
99
99
94
91
71
83
73
74
64
69
59
54
*
49
1995
165
180
137
101
94
50
62
57
70
52
48
61
*
44
43
*
*
1992
157
149
130
94
72
37
49
69
22
55
31
37
56
*
31
38
*
*
Annual % 95-03*
2.1
(0.9)
0.6
1.1
0.8
12.3
7.1
7.5
22.7
1.1
4.1
4.2
0.0
NA
3.7
2.6
NA
NA
Sources: IATA World Air Transport Statistics, Southwest press release
Southwest growth since 1992
Note: Southwest continues to grow spectacularly. Also Air France has been
growing by acquisitions, first of Air Inter and in 2004 of KLM.
In 2003, Air Canada, Singapore and Cathay Pacific each lost over 10%
Airport Systems Planning & Design / RdN 
Airline Rankings
(Passengers, millions)
Airline
American
Delta
United
Southwest
Northwest
Lufthansa
Air France
ANA
US Airways
Continental
British
JAL
Iberia
Qantas
Ryanair
Alitalia
eastjet
Korean
Air Canada
SAS
America West
Japan Air Sys
Westjet
2003/4
89
84
67
66
53
44
44
43
41
38
35
34
25
24
23
22
22
21
20
20
20
19
7
2002/3
94
90
69
64
54
44
43
44
47
40
34
34
24
24
21
22
21
22
23
23
19
21
6
1995
80
87
79
*
49
33
*
38
58
35
32
29
*
*
1992
86
83
67
28
44
27
14
35
55
38
25
24
*
*
21
20
22
*
19
17
*
*
20
*
14
15
*
*
Sources: IATA World Air Transport Statistics, airline press releases
Annual % 95-03*
1.4
(0.4)
(1.9)
12.3
1.0
4.2
19.5
1.6
(3.7)
1.1
1.2
2.2
NA
NA
NA
0.6
NA
(0.6)
NA
0.7
2.2
NA
NA
* Rates for 92-03
Note: The low-cost carriers continue to grow -- the legacy carriers stagnate
US Airways and SAS lost over 10% in 2003
Airport Systems Planning & Design / RdN 
Airline Rankings
(Freight Tonne-Km, Billions)
Airline
Fedex
Lufthansa
Korean
UPS
Singapore
Cathay Pacific
Air France
China Airlines
EVA
Japan
Cargolux
British
KLM
Northwest
Emirates
Asiana
American
United
Nippon
2003
13.2
7.3
6.9
6.7
6.7
5.2
4.9
4.7
4.7
4.4
4.3
4.2
4.1
3.0
2.6
2.6
2.6
2.4
2.3
2002
13.0
7.2
6.0
6.6
6.8
4.8
4.9
4.5
4.1
4.4
4.2
4.1
4.0
3.0
*
2.6
2.6
2.8
2.2
1995
7.0
5.8
4.3
*
3.7
2.8
4.4
*
*
3.8
*
3.3
3.6
2.8
*
*
2.4
2.5
1.5
1992
5.8
4.3
2.7
*
2.9
1.7
3.3
*
*
3.2
*
2.5
2.4
2.7
*
*
1.6
1.9
1.1
% Change 00-02
11.1
3.2
7.6
NA
10.1
10.7
1.4
NA
NA
2.0
NA
3.4
1.7
0.9
NA
NA
1.0
(0.5)
6.7
Source: IATA World Air Transport Statistics
Note: About 20% increases in 2003 for Korean, Cathay Pacific, EVA, Emirates
Airport Systems Planning & Design / RdN 
Airline Rankings
(Freight Tonne, millions)
Airline
Fedex
Lufthansa
Korean
UPS
Singapore
Cathay Pacific
Air France
China Airlines
EVA
Japan
Cargolux
British
KLM
Northwest
Emirates
Asiana
American
United
Nippon
2003
13.2
7.3
6.9
6.7
6.7
5.2
4.9
4.7
4.7
4.4
4.3
4.2
4.1
3.0
2.6
2.6
2.6
2.4
2.3
2002
13.0
7.2
6.0
6.6
6.8
4.8
4.9
4.5
4.1
4.4
4.2
4.1
4.0
3.0
*
2.6
2.6
2.8
2.2
1995
7.0
5.8
4.3
*
3.7
2.8
4.4
*
*
3.8
*
3.3
3.6
2.8
*
*
2.4
2.5
1.5
1992
5.8
4.3
2.7
*
2.9
1.7
3.3
*
*
3.2
*
2.5
2.4
2.7
*
*
1.6
1.9
1.1
% Change 00-02
11.1
3.2
7.6
NA
10.1
10.7
1.4
NA
NA
2.0
NA
3.4
1.7
0.9
NA
NA
1.0
(0.5)
6.7
Source: IATA World Air Transport Statistics
Note: About 20% increases in 2003 for Korean, Cathay Pacific, EVA, Emirates
Airport Systems Planning & Design / RdN 
Main Freight Airports
(ACI data; US- Bold, hubs- italics)
Airport
Memphis
Hong Kong / CLK
Anchorage
Tokyo/Narita
Seoul / Incheon
Los Angeles
Paris/de Gaulle
Frankfurt
Miami/Internatl.
Singapore
New York/Kennedy
Louisville
Chicago/O'Hare
Taipei
Amsterdam
London/Heathrow
Shanghai/Pudong
Indianapolis
Dubai
Bangkok
New York/Newark
Atlanta
Tons, Millions
2000
2002
2003
2.45
2.63
3.39
2.27
2.10
2.68
1.88
1.69
2.10
1.93
1.68
2.15
1.87
1.20
1.84
2.05
2.12
1.83
1.38
1.48
1.72
1.71
1.61
1.65
1.64
1.64
1.64
1.71
1.53
1.63
1.83
1.50
1.63
1.49
1.47
1.62
1.46
1.28
1.51
1.21
1.19
1.50
1.27
1.23
1.35
1.40
1.26
1.30
*
*
1.19
1.17
1.15
0.98
*
*
0.96
0.87
0.82
0.95
1.09
0.80
0.84
0.87
0.74
0.80
Growth, %
3-yr rate
12.8
6.0
3.9
3.8
(0.5)
(3.6)
8.2
(1.2)
0.0
(1.6)
(3.6)
2.9
1.1
8.0
2.1
(2.4)
Hub
Fedex
UPS
(5.4)
3.1
(7.6)
(2.7)
Airport Systems Planning & Design / RdN 
Main Freight Airports
(ACI data; US- Bold, hubs- italics)
Osaka/Kansai
Tokyo/ Haneda
Dallas/Fort Worth
Beijing
San Francisco
Dayton
1.00
na
0.90
*
0.77
0.83
0.87
0.72
0.79
*
0.56
0.55
0.79
0.72
0.67
0.66
0.61
(7.0)
(8.5)
(6.9)
CNF/Menlo
Source: ACI web 2004 and World Report Mar/Apr 2001, 2002; Airport reports
US Airports in Bold, Cargo hubs in Italics
Major increases at: Memphis, Paris/de Gaulle, Taipei,
Shanghai/Pudong, Dubai, Beijing
Major decreases at: Los Angeles, Indianapolis, Osaka/Kansai,
New York/Newark, Dallas/Fort Worth, San Francisco/Inter.
Airport Systems Planning & Design / RdN 
Airline Rankings
(Employees, thousands)
Airline
American
United
Delta
Air France
British
Continental
Northwest
Lufthansa
Southwest
US Airways
Qantas
Iberia
Thai
KLM
Malaysia
Indian
Norm
Employees
(thousands)
%Change
'92-'03
2003
1992
78
91
(14)
63
84
(25)
60
79
(24)
60
43
40
50
47
6
40
36
11
39
46
(15)
39
48
(19)
33
11
200
27
47
(43)
27
15
80
26
26
0
26
19
37
25
26
(4)
23
20
15
20
*
*
Pax / Emp
(thousands)
2003
1.1
1.1
1.4
0.7
0.7
1.0
1.4
1.1
2.0
1.5
0.9
1.0
0.7
0.8
0.7
0.4
~1.1
1992
0.9
0.8
1.1
0.3
0.5
1.1
1.0
0.6
2.5
1.2
0.3
0.6
0.5
0.3
0.7
*
~0.7
Pax-km / Emp
(millions)
2003
2.5
2.7
2.4
1.7
2.0
2.3
2.8
2.5
2.4
2.3
2.6
1.6
1.7
2.3
1.6
0.8
~2.3
1992
1.7
1.8
1.6
0.9
1.5
1.9
2.0
1.0
2.0
1.2
2.1
0.9
1.1
1.2
0.8
*
~1.4
Sources: IATA World Air Transport Statistics, 99 data for Southwest from www.southwest.com
Note: Major airlines have shed employees and improved labor productivity rapidly
over decade. Air France is toward bottom end, Southwest is at top.
Airport Systems Planning & Design / RdN 
Aircraft Inventory
(Jet Fleet)
Airline
American
Delta
United
Southwest
Northwest
Continental
Fedex
Lufthansa
British
US Airways
UPS
Air France
Air Canada
China Southern
JAL
Iberia
ANA
Qantas
Saudi
KLM
SAS
Alitalia
Aeroflot
easyjet
Ryanair
2003
783
550
532
388
364
342
339
303
282
279
257
230
208
191
189
149
149
144
143
142
131
94
90
*
67
2002
822
573
567
378
438
352
328
324
319
280
250
252
244
122
131
147
*
141
127
*
*
132
102
72
67
1995
635
539
556
224
380
314
249
234
222
394
166
156
*
*
126
*
*
*
*
*
128
144
*
*
*
% Change 95-03
2.9
0.3
(0.5)
9.2
(0.5)
1.1
4.5
3.7
3.4
(3.6)
6.9
5.9
NA
NA
6.3
NA
NA
NA
NA
NA
0.3
(4.3)
NA
NA
NA
Sources: IATA World Air Transport Statistics, airline web sites
Note: Biggest innovative airlines continue to grow and advance in
rankings. Legacy airlines stagnate or shrink, absent consolidation.
Airport Systems Planning & Design / RdN 
Economic Deregulation
 Deregulation
 Full:
USA, Canada, Australia, South Africa
 Mostly: European Union
 Result: Competition, Cost Cuts
 Existing Airlines
have difficulty with staff
 New
Airlines start with new, younger staff
with lower pay, more flexibility, less sense
of entitlement...
Airport Systems Planning & Design / RdN 
Innovations originating in
the U.S.
Type of Innovation
Decade
Legislative
1970s
Operational
Airport Design
Economic Deregulation:
Shuttle Services
People Movers: eventual
US Airlines can fly where
Integrated Air Cargo
wide use at transfer hubs
they want at any price
Services: Fedex, UPS
1980s
Transfer Hubs: Atlanta,
Midfield Concourses:
Dallas/Fort Worth, etc.
Atlanta, Pittsburgh, Denver,
Yield Management
Chicago, Detroit, etc.
Systems: Sabre, etc.
Airline Franchising:
Branding of Commuters
1990s
Open Skies Policy: US
Airline Alliances: Star,
GPS: Satellite Positioning of
Government promotes free
Oneworld
aircraft for air traffic control
access between countries
Electronic Tickets
Airport Systems Planning & Design / RdN 
Privatized status of airlines,
previously publicly owned
Airline
Aerolineas Argentinas
Air Canada
Air France
Air New Zealand
Alitalia
British Airways
Iberia
Japan Air Lines
Lufthansa (Germany)
Qantas
SAS (Scandinavia)
Comments
Stock sign
Price, Sept 04
Near bankruptcy
Govt. owns 44%
Govt. owns 74%
Near bankruptcy
AC.TO
AKH
ANZFF.PK
ALRMF.PK
BAB
IBRLF.PK
0.07
16
0.26
0.25
41
3
JALSY.PK
DLAKY.PK
QUBSF.PK
BASDF.DK
14
11.5
2.5
5.6
Govt owns 5%
and Gold Share
Took over JAS
Owns Australian
Govts own 50%
Airport Systems Planning & Design / RdN 
Airline Market “Caps”
(=price/share x shares)
Airline
Symbol
2004
UPS
FDX
LUV
RYAAY
BAB
DLAKY.PK
AKH
JBLU
AMR
EJETF.PK
AAI
NWAC
CAL
ALK
KLMR.PK
DAL
WJA.TO
AWA
HA
JALSY.PK
UAIR
ac.to
US $/Share
Market Capitalization
2001 Feb-03 Sep-03 Dec-03 Aug-04 US $, billions, Aug 04
UPS
55
59
63
75
72
80.8
Fedex
42
52
66
70
82
24.5
Southwest
18
13
18
16
15
11.7
Ryan Air *
25
39
45
51
30
4.5
British
48
19
29
42
41
4.4
Lufthansa
*
9
14
16
11.5
4.4
Air France
*
*
*
*
16
3.4
Jet Blue *
12
31
27
26
2.7
American
32
3
13
13
9
1.5
easyjet
3
4
4
5
3
1.2
AirTran
17
12
12
1.1
Northwest
21
6
10
13
10
0.8
Continental
44
6
18
16
10
0.6
Alaska
33
19
29
28
22
0.6
KLM
15
7
11
16
12
0.6
Delta
38
9
14
12
4
0.5
Westjet *
18
11
16
19
13
0.4
America West
10
2
10
12
7
0.2
Hawaiian
3
2
1
3
7.8
0.2
JAL
6
11
13
13
14
NA
USAirways
13
0.2
Ch 11
6
2
0.1
Air Canada
6
3
1
1
0.07
0
United
33
1
Ch 11
NA
0
0
Airborne Freight
14
15
merged
TWA
0
merged
Sources: Yahoo Finance and Google
*Adjusted for Stock Split
Airport Systems Planning & Design / RdN 
Airport Market “Caps”
(=price/share x shares)
Airport
Share Price, Local Money
2001
2002
2003
2004
BAA
6.13
6.2
5.1
5.5
Fraport
*
25.6
19.6
23
Copenhagen
770
589
460
885
AIAL (New Z.)
3.46
4.54
5.27
6.75
Beijing
2.03
1.82
1.65
2.33
Vienna
39.1
34.6
31.5
43.8
TBI
0.81
0.62
0.52
0.64
ASUR (Mexico)
18.1
13.4
13.9
18.4
Malaysia
1.54
2.15
1.46
1.41
Zurich
201
124
34
101
Florence
*
*
15.8
9.8
Source: Jane's Airport World, Summer issues
% Change US$, Billions
2001 -2004 Market Cap
(10)
10.70
NA
2.51
15
1.31
95
1.27
15
1.15
12
1.11
(21)
0.65
2
0.55
(8)
0.41
(50)
0.39
NA
0.11
Many airports are economically more powerful than airlines!
Airport Systems Planning & Design / RdN 
Airline Alliances
Star Alliance -- United, Lufthansa, Air Canada, Varig,
ANA, Singapore, Thai, Air New Zealand,
SAS, Asiana, Bmi, LOT
Austrian, Tyrolean, Spanair
oneworld
-- American, British, Aer Lingus, Finnair,
Iberia, Qantas, Cathay Pacific, Lan Chile
Wings
SkyTeam
-- KLM, Northwest, Continental
-- Air France + KLM, Delta, Alitalia, Korean,
Aeromexico, Czech
Aeroflot? China Southern? Wings???
Airport Systems Planning & Design / RdN 
Alliances’ Market Shares
Measure
Pax
Millions
Pax-Km
Billions
Employees
Thousands
% of IATA
Traffic
Year
2002
2003
2002
2003
2002
2003
2002
2003
Star
123
118
441
417
278
255
24
25
Alliance
Oneworld Sky Team
86
57
84
56
309
198
306
193
244
176
219
169
18
13
18
13
KLM/NW
29
28
110
104
72
64
7
7
Relative strength of Alliances has been stable. However, Air France
KLM merger may lead to consolidation of Sky Team with KLM/NW
Airport Systems Planning & Design / RdN 
New Types of Airlines
 Cargo Integrators
 UPS,
Fedex, DHL
 Role of “Post Offices” ??
 Low-Cost Carriers
 Point-to-point:
Southwest, Ryanair
 “Network”: Easyjet, AirTran
 Quasi-Network: Southwest??
 The innovators are the most
profitable and valuable airlines
Airport Systems Planning & Design / RdN 
Challenge to Traditional
Network Carriers
 Is their business model working?
 Will
people pay enough for convenience of
• easy connection at hubs
• big expensive passenger buildings
• travel agents
 If not, what will they do?
 Squeeze
out costs (wages, standards) and
survive on a more modest scale?
 Manage by having “cheap” partners
• Delta -- Song; United -- Ted…
 Or
disappear? Swissair, USAir? United?
Airport Systems Planning & Design / RdN 
Consequences for Airports
 Cheaper travel will increase traffic
 Where will it go?
 To
traditional hubs of legacy majors?
 To/from leisure locations and homes?
• Malaga, Faro, Bali, etc
 To
secondary airports?
• London/Stansted, Frankfurt/Hahn,
Rome/Ciampino, etc.
 Airport customers likely to demand
new locations, cheaper facilities
Airport Systems Planning & Design / RdN 
Meanwhile...
 The nature of the Airport Business
is changing dramatically
 More
Commercially oriented
 Less Government control
 More competition from “new” entrants
• Providence, Cincinnati, Lübeck, Liverpool...
 Not at all clear that current
generation of airport professionals
fully recognizes what this means
Airport Systems Planning & Design / RdN 