Airline hub

Airline hubs or hub airports are used by one or more airlines to concentrate passenger traffic and flight operations at a given airport. They serve as transfer (or stop-over) points to get passengers to their final destination. It is part of the hub-and-spoke system. An airline operates flights from several non-hub (spoke) cities to the hub airport, and passengers traveling between spoke cities need to connect through the hub. This paradigm creates economies of scale that allow an airline to serve (via an intermediate connection) city-pairs that could otherwise not be economically served on a non-stop basis. This system contrasts with the point-to-point model, in which there are no hubs and nonstop flights are instead offered between spoke cities. Hub airports also serve origin and destination (O&D) traffic.

Airline hubs covers two concepts: administrative and technical, it is the airport where a company concentrates the majority of its management activities and where it ensures the maintenance of its planes; commercial, it is the airport of principal destination of its flights and thus a platform of correspondence.

For major Airline hubs, whether administrative, technical or commercial, can be multiple. These are often the airports where the companies that merged to form the current company were created. For example, Air France – KLM still maintains two main centers in Paris and Amsterdam, and Delta, which recently merged with Northwest, still retains the Minneapolis hub at the origin of the latter.

For less important companies the single Airline hubs is often the capital or the most important city of the country of origin. This airport is the connecting platform between domestic flights and international flights.

Finally, low cost companies have an administrative and technical hub. This airport also receives a big part of the flights but these companies not ensuring the connections, it is not a platform of correspondences…

Features
Some airlines may use a single hub, while others have multiple hubs. The connection centers are used both for the air transport of passengers as well as for the transport of loads.

Many airlines also use focus cities (the English “focus city”), which function primarily as hubs, but with fewer flights. They also use the term secondary connection center, a non-technical term for large cities. Examples include British Airways at Manchester Airport and US Airways at Pittsburgh International Airport.

Some of the most important connection centers of the largest airlines in the world are known as “fortress” connection hub; such airports are usually dominated by a single airline, which may be responsible for more than 70% of the air traffic of the “fortress” connection center. Examples include Northwest Airlines and its connection center at the Minneapolis-Saint Paul International Airport, Delta Air Lines and its connection center at the Hartsfield-Jackson International Airport and American Airlines with its hub at the Dallas International Airport -Fort Worth. Some argue that the existence of such hubs can eliminate competition, as was the case with the Battle of ProAir against Northwest; The fact that ProAir operated only for a short period at Detroit Airport is often cited as an example. Northwest Airlines was able to impose itself on the low cost airline by matching its prices and offering more frequent flights.

In Europe, examples of such airports are Airport Schiphol for KLM, the Heathrow Airport to British Airways, the Charles de Gaulle Airport for Air France ‘s Frankfurt for Lufthansa or Madrid-Barajas for Iberia.

In Central America, an example is the Tocumen International Airport in Panama, the center of operations of the Panamanian airline Copa Airlines, a member of Star Alliance, which connects the airport with more than 73 destinations in 30 countries. It is also located the International Airport of El Salvador that serves as a hub for Avianca.

In South America, the Jorge Chávez International Airport in Lima, Peru, an operations center for the LATAM and Avianca airlines, as well as the El Dorado International Airport in Bogotá, Colombia, an operations center for the Avianca airline and the Tocumen International Airport in Ciudad are examples. of Panama that serves as a hub for the airline COPA.

Principles of operation (business plan)
Traffic between two airports is not always sufficient for a company to provide a direct link under conditions of satisfactory profitability.

In the late 1980s, US national airlines developed a commercial concept, the connecting platform that offers passengers the ability to connect many destinations to one another by connecting them.

Advantages of a Turnstile
There is no need to do non-stop flights between all possible locations. This would not be profitable, since the aircraft would rarely or never be so busy that procurement, use and maintenance would be worthwhile. Single-route flight capacity may be increased by “delivering” to the hub of various decentralized passenger and cargo airports for one main line.

If this advantage is used systematically, ie on a larger scale, by an airline or within an alliance, this is called a hub-and-spoke process.

Benefits for the passenger

Multiplying the destinations served by the same company from its departure airport.
Initial recording on all segments of his flight.
Quick correspondence (often less than an hour). However, the passage through a connecting platform adds at least two hours (correspondence + detour + landing and take-off extra) on the travel time compared to a direct flight if it exists.
Correspondence guaranteed, to a certain extent.
Single registration, transfer and traceability of luggage.
The two (or more) segments of the flight are provided by devices of the same type of comfort.

Consequences for the airline

The offer of rapid correspondence requires him to adapt his schedules and to land and take off flights in waves. The turntable may be saturated during these time slots.
The increase in the number of connecting passengers requires it to adapt its facilities to ensure the transit of passengers and baggage between two planes.
The guarantee of correspondence can force it to delay some flights to wait for the passengers of another flight. This causes a cascade of delays that can affect a large part of the operations.
An efficient computer system must be used to trace each passenger and baggage to optimize the management of transits and flights from or to the hub of correspondence.

The concept is particularly suited to the traffic and geography of the United States. Airports such as Chicago (central for connections between New England and California) or Atlanta (central for Florida- northern cities) are among the first in terms of passenger numbers as those in transit on flights respectively from United Airlines or Delta Air Lines.

Most airlines use an airport as the main base of their operations. This is where the technical aircraft maintenance facilities are and often their commercial headquarters. These main bases are also, of course, places of correspondence but if many companies have adopted the term hub there are relatively few that ensure the speed and the guarantee of connections. Most low-cost companies, for example, only provide point-to-point links. The transfer between two flights is the responsibility of the passenger and in case of delay the second segment is lost. These companies do not have, by definition, a platform for correspondence.

An extension of the concept is being used by some airlines to dispatch passengers from their long-haul flights to regional airports. Most often local flights are provided by companies with which they have a commercial agreement but the aircraft used are not of the same type.

Passengers obviously prefer direct flights. The development of aircraft of relatively low capacity but meeting the new environmental standards and adapted to the current economic conditions modifies the rules of competition between the concept of the hub and the point-to-point links. The two principles are not exclusive of each other. In order to develop a correspondence platform well, it must also attract a large local clientele: the American experiences of creating a hub on isolated airports have been failures.

The minimum connecting time (MCT: Minimum Connecting Time) is a very important parameter: it allows to properly reference the flights in the computer reservations system.

Hub-and-spoke method
In the hub-and-spoke method (hub-and-spoke methodIn air traffic, passengers and goods are first flown from their point of departure to the hub in order to fly from there with passengers and goods from numerous other directions (but with the same destination) to their actual destination. The application of the hub-and-spoke method leads to a high load (peak load) of the central traffic nodes and the aircraft. Hubs also help to make large machines economically viable on long-haul flights (the larger the aircraft and the longer the route, the lower the proportion of operating costs for transporting a passenger). At the same time, smaller regional airports will also be connected to the global aviation network. As a result, high capacity reserves in terms of infrastructure and ground handling services are needed at the central hub. “Passenger masses” are distributed throughout the day in several waves from smaller short or medium-haul aircraft to medium or long-haul aircraft and vice versa.

Within various alliances, the hubs are used to facilitate the transfer of air passengers between the different airlines. This increases the number of destinations offered for an airline, without having to operate the routes already operated by partner companies with their own personnel and aircraft. This increased flexibility can also benefit small groups of customers whose transport would otherwise be unprofitable on certain less-traveled routes. Lufthansa is meanwhile no longer flying to the entire Australian continent itself, but is sharing the long-haul routes to and from Australia with its alliance partners, although the hub can be “halfway” (eg in Singapore or Bangkok)., Large airlines serve one to three (but sometimes more) such hubs. This is how theLufthansa airports Frankfurt, Munich and in the future indirectly through its majority holding in the Swiss to Zurich airport as a major hub. Examples of freight hubs in Germany are the Cologne / Bonn airport as a Europe hub of UPS Airlines and since 2008 the Leipzig / Halle airport as the European hub of DHL

Types of Hub-and-Spoke Systems
In reality, there are different types of hub-and-spoke systems.

Hourglass Hub: Due to the geographical location of some airports, these serve as a transit airport especially on long O & D markets, which must be served for technical reasons. One classic example of this is Singapore Airport, which serves many passengers as a transfer airport between Europe and Australia / New Zealand. The length of the inbound and outbound connections is almost the same.

Inland hub: The key feature of this hub-type is that short-haul and long-haul flights are interlinked, as passenger traffic is not sufficient for a direct flight.

Multi-Hub: By that you mean the connection of two hubs of an alliance. For example, the two airports Frankfurt / Main and Chicago / O’Hare would be a multi-hub structure of the Star Alliance.

Mega-Hub: These are particularly significant hubs of an alliance on a continent. In Europe these are: London-Heathrow, Paris-Charles de Gaulle and Frankfurt / Main.

Secondary hub: If the primary hub of an airline is growth-constrained for capacity reasons, a second hub is often set up. For example, Munich is considered the secondary hub of Lufthansa.
Shared hub: Some airports are sometimes used by two airlines as a hub. Chicago-O’Hare is the hub of United and American Airlines.

Reasons to use multiple hubs

Historical and Political
Following the merger of Air France and KLM, the resulting company Air France-KLM continues to use both Amsterdam Schiphol Airport and Paris Charles de Gaulle Airport as hubs. Also the Zurich airport after the takeover of Swiss by Lufthansa reused Corporation as “Swiss hub”.

Geographically
To cover approximately the entire area of the US, it is more advantageous to serve at least one hub each on the east and west coasts, since the alternative of a single central hub in the Midwest (Chicago, Denver, Dallas or Minneapolis) would otherwise detour too big and therefore uninteresting for many passengers (eg for the Seattle – Los Angeles route).

The Boeing concept of medium-sized, comfortable long-haul jets (“Dreamliner” 787) seeks to meet this customer need for direct flight connections, while Airbus’s A380 relies on a progressive focus on mega-hubs for optimal utilization on a large number of feeder flights (Engl. “Feeder”) are instructed. However, Airbus also offers the A350 an aircraft for direct flights on long-haul routes in competition with the 787th

Economic Geography
Positioning as an important hub has major overarching locational advantages due to better flight connections:

Through a hub, a city gains centrality in the world economic system through its better accessibility. This in turn has an effect on the choice of location when settling new companies, corporate headquarters and service providers. And because of the large offer of cheap flights may also on the tourism (eg Las Vegas). The strategic positioning of the city of Dubai in the international economic system also relies on these mutually reinforcing concentration effects.

Berlin’s lack of attractiveness for the establishment of important supraregional corporate headquarters, however, is not least (in addition to other, especially historical factors) also associated with its lack of access to international air traffic.

In the coming years, developments in the economic growth regions of Asia are likely to be particularly exciting, where (in China and Vietnam at least) a mixture of government-controlled and economically-indexed factors will be the new mega-hubs of the future in Hong Kong, Canton, Shanghai, Beijing Taipei, Ho Chi Minh City and Hanoi, as well as, presumably, in Mumbai, New Delhi, Bengaluru, Jakarta and other major economic and administrative centers. Old locations such as Singapore, Bangkok, Kuala Lumpur or Tokyo will in future have to defend themselves against the powerful competition of new international air traffic hubs with large domestic markets and thus high attractiveness as well as intercontinental destinations with great potential for transfer.

Due to utilization
In addition to its most important location in Frankfurt, Lufthansa has operated another hub in Munich since 1996, because Frankfurt Airport is running at almost full capacity and the planned expansion is delayed. In the meantime, however, Munich has developed into an independent aviation hub, which is interesting due to its expansion stage even without the problems in Frankfurt.

Focus city
In the airline industry, a focus city is a destination from which an airline operates several point-to-point routes. Thus, a focus city primarily caters to the local market rather than to connecting passengers.

However, with the term’s expanded usage, a focus city may also function as a small-scale hub.

Allegiant Air, JetBlue and Southwest Airlines are examples of US-based airlines that consider some of their destinations to be focus cities.

Analysis
The hub-and-spoke system allows an airline to serve fewer routes, so fewer aircraft are needed. The system also increases passenger loads; a flight from a hub to a spoke carries not just passengers originating at the hub, but also passengers originating at multiple spoke cities. However, the system is costly. Additional employees and facilities are needed to cater to connecting passengers. To serve spoke cities of varying populations and demand, an airline requires several aircraft types, and specific training and equipment are necessary for each type. In addition, airlines may experience capacity constraints as they expand at their hub airports.

For the passenger, the hub-and-spoke system offers one-stop air service to a wide array of destinations. However, it requires having to regularly make connections en route to their final destination, which increases travel time. Additionally, airlines can come to monopolise their hubs (fortress hubs), allowing them to freely increase fares as passengers have no alternative.

Banking
Airlines may operate banks of flights at their hubs, in which several flights arrive and depart within short periods of time. The banks may be known as “peaks” of activity at the hubs and the non-banks as “valleys”. Banking allows for short connection times for passengers. However, an airline must assemble a large number of resources to cater to the influx of flights during a bank, and having several aircraft on the ground at the same time can lead to congestion and delays. In addition, banking could result in inefficient aircraft utilisation, with aircraft waiting at spoke cities for the next bank.

Instead, some airlines have debanked their hubs, introducing a “rolling hub” in which flight arrivals and departures are spread throughout the day. This phenomenon is also known as “depeaking”. While costs may decrease, connection times are longer at a rolling hub. American Airlines was the first to depeak its hubs, trying to improve profitability following the September 11 attacks. It rebanked its hubs in 2015; however, feeling the gain in connecting passengers would outweigh the rise in costs.

Types of hubs

Cargo hub
The hub-and-spoke system is also used by some cargo airlines. FedEx Express established its main hub in Memphis in 1973, prior to the deregulation of the air cargo industry in the United States. The system has created an efficient delivery system for the airline. Other airlines that use this system include UPS Airlines, TNT Airways, Cargolux and DHL Aviation, which operate their primary hubs at Louisville, Liège, Luxembourg and Leipzig respectively.

Focus city
Although the term focus city used to mainly refer to an airport from which an airline operates several point-to-point routes, its usage has expanded to refer to a small-scale hub as well. For example, JetBlue’s New York–JFK focus city, which is the airline’s busiest operation, functions like a hub.

Fortress hub
A fortress hub exists when an airline controls a significant majority of the market at one of its hubs. Competition is particularly difficult at fortress hubs. Examples include Delta hubs at Atlanta, Detroit and Minneapolis–Saint Paul; American Airlines hubs at Charlotte, Dallas–Fort Worth and Philadelphia; and United hubs at Denver, Houston–Intercontinental, and Newark.

Flag carriers have historically enjoyed similar dominance at the main international airport of their countries and some still do. Examples include Lufthansa at Frankfurt Airport, Air Canada at Toronto Pearson Airport, KLM at Amsterdam Airport Schiphol, Garuda Indonesia at Soekarno-Hatta International Airport, British Airways at London Heathrow, Air China at Beijing Capital Airport, and Air France at Paris Orly and Charles de Gaulle Airports.

Primary and secondary hubs
A primary hub is the main hub for an airline. However, as an airline expands operations at its primary hub to the point that it experiences capacity limitations, it may elect to open secondary hubs. Examples of such hubs are Turkish Airlines’ Istanbul–Sabiha Gökçen hub, British Airways’ hub at London-Gatwick, Air India’s hub at Mumbai and Lufthansa’s hub at Munich. By operating multiple hubs, airlines can expand their geographic reach. They can also better serve spoke–spoke markets, providing more itineraries with connections at different hubs.

Reliever hub
A given hub’s capacity may become exhausted or capacity shortages may occur during peak periods of the day, at which point airlines may be compelled to shift traffic to a reliever hub. A reliever hub has the potential to serve several functions for an airline: it can bypass the congested hub, it can absorb excess demand for flights that could otherwise not be scheduled at the congested hub, and it can schedule new O&D city pairs for connecting traffic.

Scissor hub
A scissor hub occurs when an airline operates multiple flights to an airport that arrive at the same time, swap passengers, and then continue to their final destination. Jet Airways has a scissors hub in Amsterdam, where passengers fly in from Delhi, Bangalore and Mumbai to connect onto the flight to Toronto and vice versa. Air India operates a similar scissor hub at London’s Heathrow Airport, where passengers from Delhi, Ahmedabad, and Mumbai can continue onto a flight to Newark. An international scissor hub could be used for third and fourth freedom flights or it could be used for fifth freedom flights, for which a precursor is a bilateral treaty between two country pairs.

WestJet Airlines uses St. John’s as a scissor hub during its summer schedule for flights inbound from Ottawa and Toronto and outbound to Dublin and London Gatwick. At Los Angeles International Airport, Qantas’ passengers from Melbourne, Brisbane or Sydney may transfer onto a flight to New York-JFK and vice versa.

Moonlight hub
In past history, carriers have maintained niche, time-of-day operations at hubs. The most notable is America West’s use of McCarran International Airport in Las Vegas as a primary night-flight hub to increase aircraft utilization rates far beyond those of competing carriers.

History

Middle East
In 1974, the governments of Bahrain, Oman, Qatar and the United Arab Emirates took control of Gulf Air from the British Overseas Airways Corporation (BOAC). Gulf Air became the flag carrier of the four Middle Eastern nations. It linked Oman, Qatar and the UAE to its Bahrain hub, from which it offered flights to destinations throughout Europe and Asia. In the UAE, Gulf Air focused on Abu Dhabi rather than Dubai, contrary to the aspirations of UAE Prime Minister Mohammed bin Rashid Al Maktoum to transform the latter into a world-class metropolis. Sheikh Mohammed proceeded to establish a new airline based in Dubai, Emirates, which launched operations in 1985.

Observing the success of Emirates, Qatar and Oman decided to create their own airlines as well. Qatar Airways and Oman Air were both founded in 1993, with hubs at Doha and Muscat respectively. As the new airlines grew, their home nations relied less on Gulf Air to provide air service. Qatar withdrew its share in Gulf Air in 2002. In 2003, the UAE formed another national airline, Etihad Airways, which is based in Abu Dhabi. The country exited Gulf Air in 2006, and Oman followed in 2007.

Emirates, Qatar Airways and Etihad Airways have since established large hubs at their respective home airports. The hubs, which benefit from their proximity to large population centres, have become popular stopover points on trips between Europe and Asia, for example. Their rapid growth has impacted the development of traditional hubs, such as London, Paris, and New York City.

United States
Before the US airline industry was deregulated in 1978, most airlines operated under the point-to-point system. The Civil Aeronautics Board dictated which routes an airline could fly. At the same time, however, some airlines began to experiment with the hub-and-spoke system. Delta Air Lines was the first to implement such a system, providing service to remote spoke cities from its Atlanta hub. After deregulation, many airlines quickly established hub-and-spoke route networks of their own.

Freight case
The hub concept also exists for freight and is actually older.

In France, the Postale by night transported the mail from the province to Paris and, after distribution, from Paris to the province for 55 years, the service having ended in 2000. The mail was sorted on board airplanes and postal bags. transferred from one side to another at the Paris port of call. Each night the planes were scheduled to land and leave Paris at the same time.

In the United States, the Federal Express (now FedEx) company created a hub in Memphis in 1973, where all parcels are forwarded before being sorted and then re-shipped to their destination.

Criticism
For the peak traffic times, a much larger and therefore more expensive infrastructure (landing and taxiway system, transport capacities, terminal buildings, baggage handling, security controls) must be made available.

Increasing demand for space and more air traffic in many cases reach capacity limits (for example in Frankfurt am Main, London Heathrow, Tokyo Haneda). With the expansion additional burdens on the residents are connected (possibly years of expensive processes).

More transfer passengers do not necessarily mean real revenue growth for airlines. Although the medium- and long-haul aircraft are theoretically better utilized, feeder flights for the airline initially mean higher operating costs compared to direct flights. Whether feeder flights are profitable ultimately depends on the overall profit and loss account of all airline services provided by an airline.

At large airports, aircraft travel takes longer, especially in short-haul and medium-haul flights, than with direct services. This is partly due to the longer taxiways from and to the landing and runways and on the other to flight plan related longer residence times of the machines, so that the connections are guaranteed on all transfer connections. This reduces the revenue-relevant actual flight times per aircraft.

The business statistics are distorted, as each “upgrader” is counted as “two passengers” (once arriving, once departing). If one were to contrast this traffic summary with the passengers traveling by train, bus or car, the result would be a more realistic picture of the actual passenger volume of an airport or an airline.

The flight plan of an airline often gets confused over a longer period of time, when at a hub more frequent delays occur, for example due to weather conditions. There is also an increased delay or misdirection of baggage due to frequent reloading.

From an ecological point of view, there are differing views as to whether the often low utilization of feeder flights, compared to the resulting higher utilization of long-haul aircraft in the environmental balance, means higher emissions of air pollutants than if more direct flights were carried out. A distinction must be made between a company-specific environmental balance sheet and the environmental balance sheet. The public debate on whether, in view of the increase in mobility, rates of increase in air traffic can still be regarded as environmentally friendly in comparison to other means of transport should be disregarded.

Turnstiles and feeder airports create new disparities in urban competition, as they provide a major locational advantage, which in turn can be a significant location disadvantage for cities that do not have their own (feeder) airport.

Short flights are increasingly unprofitable for airlines. In the 1980s Lufthansa tried to replace short-haul flights with train journeys with the Lufthansa Airport Express. Also the offer Rail & Fly of the German course in co-operation with the airlines goes in a similar direction. In contrast, direct flights rarely lead to uneconomical short routes.

Source from Wikipedia