Transcript Multi-Airport Systems in Era of Low-Cost Carriers Dr. Richard de Neufville

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 multiairport 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 primary
 S-shaped market share/frequency share
Market
Share
Frequency Share
 Drives airlines to
 Match
flights => Allocate flights to major markets
 Concentrate Traffic at primary airports
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 offer
 Customers 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 airports
 Airlines place flights at second airports
 There 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
Traffic in Millions
Multi-Airport
Region
For Region Originating
System
London
120
47
Yes
Tokyo
84
36
Yes
Los Angeles
79
34
Yes
New York
87
33
Yes
Paris
72
28
Yes
Chicago
94
26
Yes
Miami
53
20
Yes
San Francisco
54
20
Yes
Hong Kong
47
19
Yes
Washington
51
18
Yes
Seoul
37
17
Yes
Airport Systems Planning RdN
Metropolitan areas with
significant multi-airport systems
Metropolitan
Region
Osaka
Boston
Atlanta
Las Vegas
Dallas
Shanghai
Frankfurt
Sao Paulo
Houston
Milan
Taipei
Traffic in Millions
Multi-Airport
For Region Originating
System
35
15
Yes
32
15
Yes
79
14
37
14
59
13
Yes
30
13
Yes
51
13
Yes
25
12
Yes
42
12
Yes
27
12
Yes
26
12
Yes
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 airlines
setting up “parallel network”
 Low-cost carriers “parallel” majors
 Major fare distinctions
 Ticket 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
Region
Airport
Boston
Manchester
Boston
Providence
Dallas/Ft Worth
Love
Houston
Hobby
Los Angeles
Long Beach
Miami
Ft Lauderdale
New York
Islip
San Francisco
Oakland
Toronto
Hamilton
Vancover
Abbotsford
Low-Cost
Carrier
Southwest
Southwest
Southwest
Southwest
Jet Blue
Southwest
Southwest
Southwest
Westjet
Westjet
Airport Systems Planning RdN
New Reality: Europe Network
of Low-Cost Carrier Airports
Metropolitan
Region
Brussels
Copenhagen
Dusseldorf
Frankfurt
Glasgow
Hamburg
London
London
Manchester
Milan
Milan
Oslo
Paris
Rome
Stockholm
Low-Cost
Secondary
Carrier
Airport
Ryanair
Charleroi
Ryanair
Malmo
Easyjet
Koln/Bonn
Ryanair
Hahn
Ryanair
Prestwick
Ryanair
Lubeck
Easyjet
Luton
Ryanair
Stansted
Easyjet
Liverpool
Easyjet
Linate
Ryanair
Orio al Serio
Ryanair
Torp
Ryanair
Beauvais
Easyjet + Ryan
Ciampino
Ryanair
Skvasta
Airport Systems Planning RdN
Multi-Airport Systems
in Brazil
Metropolitan Internat'l Distant Airport
Area
Name
Traffic
Domestic Close-in Airport
Name
Traffic
Millions
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 Network
of close-in Brazilian airports
Airport Pair
Passengers,
Rank
1000s
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 airports
 This is already happening!!!
Airport Systems Planning RdN
Southwest entry in Boston
Figure 4
market grew
second airports
ince 1996, the Regional Airports Have Captured M ore than
Figure 1: New England traffic growth shifted from Boston/Logan
5% of the
Region’s
Air Passenger Growth
to Regional Airports along with growth
of Southwest at Providence and Manchester (NH)
Distribution of New England Passenger Growth
1990–1996
1996–2000
Logan
Logan
24%
(+2.3M)
77%
(+2.3M)
Regional
Airports
76%
(+7.2M)
Regional Airports
Source: Louis
Berger, New
England Regional
Aviation System
Plan materials
23%
+2.9
+2.9 Million
Million
Air
Air Passengers
Passengers
(+0.7M)
+9.5
+9.5 Million
Million
Air
Air Passengers
Passengers
Regional airports include Providence, Manchester, W orcester, Bangor, Burlington, Hartford, New Haven, and Portland.
Source: Airport Records and US DOT, Form 41 schedules.
Page 3
Airport Systems Planning RdN
Market Share of Boston/Logan
Figure
5
is
in
decline
The Region is Less Reliant on Logan Airport
Figure 2: The Boston/Logan traffic share dropped by a quarter over the past 20
years; half of this occurred with the Southwest growth in the late 1990s at
Share
of New England Air Passengers
Providence andLogan's
Manchester
(NH)
80%
78%
70%
59%
60%
The 2003
Share is
about 63%
50%
'80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00
Note: Includes enplaned passengers at Logan, Hartford/Bradley, T .F. Green/Providence, Manchester, Portland,
Burlington, Bangor, Tweed New Haven, and Worcester.
Source: US DOT, Form 41 and Part 298/C. Airport records for Loga n and various regional airports.
Source: Louis Berger New England
Regional Aviation System Plan
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
Airport Systems Planning RdN