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45th Congress of the European Regional Science Association: "Land Use and Water Management in a Sustainable Network Society", 23-27 August 2005, Amsterdam, The Netherlands
In recent years there has been tremendous interest in the growth of low-cost airlines in Europe operating from regional and secondary airports. These have been entirely in the short-haul sector, however. Intercontinental services remain dominated by a few large airports such as London Heathrow, Frankfurt, Paris CDG and Amsterdam. This paper examines the recent development of long-haul services and shows that some of the medium sized European airports have seen their network reduced in the last decade, while it also appears more difficult to replicate Ryanair's use of obscure minor airports in the long-haul arena. Possible means of providing long-haul links to European regional airports are examined. Continental Airlines is launching new routes from New York to places such as Belfast and Bristol with the Boeing 757 offering around 150 seats. These obviously depend upon the hub feed at the US end to gather a much wider range of North American destinations together. Emirates has ambitious plans to serve more European airports from its rapidly growing hub at Dubai. Already it offers the only eastbound long-haul flight out of Scotland (Glasgow-Dubai). Routes between smaller airports catering for the visiting friends and relatives market have developed where there has been historical migration. These are typically at low frequencies. Canada has services from Europe such as Cardiff-Toronto and Lyon-Montreal. Hamburg has a link to Accra in Ghana, Las Palmas (Canary Islands) to Havana, Cuba and Birmingham to Ashgabat in Turkmenistan. In some cases it is possible to support a service through a second stop in Europe (e.g. Lisbon-Porto-Caracas). Low frequency services are also to be found catering for the holiday market such as to Florida or the Caribbean (e.g. Dusseldorf-Orlando). In the absence of any direct long-haul service, connections via a European hub are necessary to access intercontinental points from regional airports in Europe. International alliances between airlines are shown to have been a mixed blessing in this respect. They have generally widened connection opportunities via the major hubs and led to more competitive through fares becoming available. However, some secondary and regional hubs have been run-down in favour of major hubs in the same alliance (which may be in a different European country), reducing accessibility from smaller and more peripheral regional airports. Examples include London Gatwick which has the main London service from many smaller UK airports such as Jersey, Inverness and Plymouth but has been run down as a long-haul hub by British Airways and Copenhagen, which now has very limited long-haul service by SAS; instead a double-change is required from many small Scandinavian airports to reach Star Alliance services out of Frankfurt. The growth of low-cost short-haul airlines such as Ryanair and easyjet may have reduced fares for local passengers but has reduced global connectivity where they have driven a traditional hub airline off the route. A good example is Belfast in Northern Ireland which used to have a link to Amsterdam by KLM. They have been displaced by easyjet, which is fine for passengers only travelling to Amsterdam but beyond there is no longer co-ordinated scheduling and through fares to KLM's global network. If a passenger does attempt to connect via Amsterdam it will usually cost them more than previously and if anything goes wrong, the connection is 'at their own risk'. The scope for a long-haul low-cost airline is examined. It is demonstrated that it is difficult to obtain a sufficient cost advantage in long-haul for a 'no-frills' all-economy class product. This is because the major airlines are able to obtain very high yields from their first and business class traffic (one full fare first class passenger with a lie flat bed may be paying the equivalent of 40 deeply discounted economy excursion fares). This enables airlines to offer the seats at the back of the aircraft based on a very low marginal cost. It is difficult to increase aircraft and crew utilisation as this is already high on intercontinental sectors. Cargo is less easy to ignore as it provides significant extra revenue on long-haul flights although introduces complexity. It is also difficult to eliminate all 'frills' on flights of 8 or 12 hours duration: even if charged for it is necessary to maintain food service (galley space) and in-flight entertainment, while keeping standard provision of toilets, baggage handling etc. The cost saving from using secondary airports is marginal for long distance traffic where it forms a much smaller proportion of total costs. Many of these smaller airports have runway length or apron/terminal space insufficient to handle widebody aircraft. Hub feed is much more crucial for long-haul services: there are few dense routes (mainly Virgin Atlantic's long-haul network from London plus Paris-New York). Intercontinental services from Frankfurt or Amsterdam typically depend on connections for 70-80% of their traffic. Bilateral air services agreements between governments also restrict the opportunities for long-haul services from regional airports. When the UK-India bilateral was renegotiated to allow extra flights, the three British carriers applying all wanted to use this scarce capacity from London Heathrow rather than any regional airport. Other bilaterals may specifically name the capital city only in the route schedule. It is concluded that the best scope for long-haul services from the regions is to major hub airports in other parts of the world, such as those developed by Emirates and Continental. Opportunities for point-to-point leisure services fall into two main categories: ethnic links and holiday destinations (some of which may already exist as charters). A long-haul low-cost 'no-frills' air service is likely to be a risky venture but carriers such as easyJet may be tempted to try this from their bases in secondary airports such as London Stansted or Berlin Schonefeld if profits falter on their European network, using their short-haul services to provide feed. Otherwise, the regional airports are in the hands of the major airlines or alliance groups and their European feeder operations. Important links are currently under threat from lack of capacity for small aircraft at the major hubs, run-down of secondary hubs and competition from low-cost airlines for short-haul traffic.
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