Multi-Airport Systems Prof. Richard de Neufville
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1 Multi-Airport Systems Prof. Richard de Neufville Istanbul Technical University Air Transportation Management M.Sc. Program Airport Planning and Management / RdN Airport Planning and Management Module 23 January 2017
2 Two Topics 1. What is a Multi-Airport System (MAS)? Definition Examples Explanation Frequency competition effect and special roles/markets 2. Role of LCCs in Development Second Airports Good initial base Role may decrease as LCC take over from legacy carriers
3 What is a Multi-Airport System? The significant commercial airports [> 500,000 passengers, excluding military] in a metropolitan region without regard to ownership or political control Examples: Boston, Providence, Manchester [different states] Copenhagen (Denmark), Malmö (Sweden) Istanbul: Ataturk and Sabiha Gokçen airports Often ex military [London/Stansted; Frankfurt/Hahn] In all cities with > 17 million annual originating passengers
4 Discussion of Definition Our definition contrasts with focus on who owns the airports (focus of ACI Airports Council International, and others) However, our definition is reality for travelers and for airlines They generally do not care who owns airports [often do not know] Only care when passport or other issues complicate use of other airport
5 Example: Boston Source: Bonnefoy
6 Example: New York Source: Bonnefoy
7 Multi-Airport Systems in US Source: Bonnefoy
8 Example: Frankfurt (Germany) Source: Bonnefoy
9 Multi-Airport Systems Database Prof. Richard de Neufville and Dr. Philippe A. Bonnefoy November 2016 See also: P. Bonnefoy, R. de Neufville and R. Hansman, Evolution and Development of Multi-Airport Systems: A Worldwide Perspective ASCE Journal of Transportation Engineering, Special Issue, Vol. 136, No. 11, pp , 2010
10 Multi-Airport Systems Worldwide Legend Multi-Airport System North America Europe Latin America & Caribbean Middle East Asia/Pacific 60 multi-airport systems in 26 countries 10
11 Multi-Airport Systems in Asia-Pacific, 2015
12 Multi-Airport Systems in Europe, 2015 (1)
13 Multi-Airport Systems in Europe, 2015 (2)
14 Multi-Airport Systems in Europe, 2015 (3)
15 Multi-Airport Systems Latin America & Middle East, 2015
16 Multi-Airport Systems in North America, 2015 (1)
17 Multi-Airport Systems in North America, 2015 (2)
18 General Observations All metropolitan areas with greatest number of Originating Passengers (eliminating transfers) feature a MAS Originating traffic drives MAS formation Transfer traffic wants to use only 1 airport Atlanta, World leader in traffic (> 100 million) has ~ 70% transfers, ~ 15 million originations/year AND ONLY 1 airport Second airports mostly serve a fraction (often small) of total at airport with most passengers. This reflects concentration factor
19 Metropolitan areas with significant multi-airport systems (1) de Neufville data base for 2016
20 Metropolitan areas with significant multi-airport systems (2) de Neufville data base for 2016
21 Planning Issue Many mistakes in planning multiairport systems Washington/Dulles planned as major DC airport, but had only ~ 3 MAP for 20 years London/Stansted similar story only developed with Ryanair hub around 2002 Osaka/Kansai Osaka/Itami did not close Montreal/Mirabel huge airfield, now closed to passenger traffic Et cetera
22 Why mistakes happened Two main causes: 1. Failure to appreciate traffic concentration at primary airports result of frequency competition 2. Because planners/forecasters used wrong mental model [ catchment area ] that passengers go to nearest airport while distance is a factor, passengers go to where airlines offer services they want (intercontinental, low-cost, etc.)
23 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 => Use flights for major markets Concentrate Traffic at primary airports
24 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
25 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 ~ 17 million originations/year Note: higher as average aircraft carries more passengers, larger aircraft or higher load factor
26 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
27 Role of Low-cost carriers: setting up parallel network Low-cost carriers parallel majors Ticket distribution separate Internet direct to users, no travel agents No interlining of bags, tickets Not in Reservation systems
28 Theme for Low-Cost Carriers Low cost carriers have developed a parallel network of travel network choice (vs. airport choice ) boosts traffic in multi-airport systems Competition between low cost and legacy airlines leading to struggle between low cost and legacy hubs Miami/Internatl vs. Miami/Ft. Lauderdale London/Heathrow vs. London/Stansted, etc.
29 Situation in 2000 to now: LCC choose different airports Spirit and Allegiant (USA); Ryanair and Easyjet (UK) desire cheap airports Orlando vs Orlando/Sanford (Allegiant) Montreal and Montreal/Plattsburg (Spirit) London/Healthrow and London/Luton (Easyjet) Low congestion and delays Flexible work force They find this at aggressive airports, hungry for their business
30 Southwest: Traditional focus on lesser airports
31 Europe Network of Low-Cost Carrier Airports
32 But what is future? Low-cost airlines becoming major Southwest has largest market share of US domestic passengers in US -- about 20% - - and has for years despite mega mergers Delta + Northwest UAL + Continental American + US Air
33 LCC s are now moving in on hub airports Boston is an example jetblue now largest carrier at Boston/Logan Southwest has arrived, thus de-emphasizing Manchester, Providence Southwest now also at New York/LaGuardia; New York/Newark Washington/Dulles; Philadelphia Los Angeles/Internatl; San Francisco/Internatl
34 Meanwhile in cargo A similar development in air cargo Fedex and UPS are developing their own networks of cargo airports Fedex: Memphis, Indianapolis, San Francisco/ Oakland, Fort Worth/Alliance, London/Stansted (UK) UPS: Louisville, Los Angeles/Ontario, Chicago/Rockford, Toronto/Hamilton
35 Summary Multi-airport Systems: A well-established phenomenon Largely driven by originating passengers Second airports usually smaller than primary LCCs drove much growth of second airports up to about 2010, now they are moving in on larger airports However, their influence may be decreasing, as they supplant majors in continental markets
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