Commercial aviation is dominated by a series of hub airports where passengers connect seamlessly between airlines, frequently in the shortest possible times with their luggage perhaps following a few days later!
For many airlines and their hub airports the scale of their network is dependent on those valuable connecting flows that make all the difference between a route being operated or connectivity being lost. And many hub airports are increasingly at risk of losing those important connecting passengers as the laws of unintended consequences are being applied by regulators throughout Europe.
The most successful hub airports in the world have several factors all working in their favour, some of which they can influence and others where geography has just been a natural advantage. However, the most important factor of all has been the partnership between the regulators, airports, based airlines, tourism boards and other key stakeholders; when they are all aligned anything can happen, and when that alignment fractures problems develop quickly as we are seeing throughout Europe.
It seems that every major hub airport in Europe faces challenges from regulators around both current airline capacity and future growth, with Amsterdam and Paris taking the headlines for, what appear to be, a series of unilateral decisions that could damage the future prosperity of their local airlines and airport communities. But what are the actual numbers behind the stories and how important is connecting traffic to the major airports in Europe, we’ve crunched the numbers and those connecting travellers are very important for some!
The OAG Megahubs 2023 report placed London Heathrow as the best-connected international hub in the world, ahead of New York JFK and Amsterdam, so that gives you a clue of the importance of connecting traffic to European Hubs.
Five European hubs rank in the global top ten Megahubs driven by the combination of international destinations served and frequency of services, so any new international routes or frequencies added can result in an improvement in ranking, or indeed loss of position if changes to operating conditions are imposed by regulators.
With five European hubs in the top ten, competition for those connecting passengers is fierce and inevitably price is the greatest competitive tool for each of the airlines operating these hubs, frequent flyer programmes, inflight entertainment and the connecting product are all important but ultimately for many travellers price is the only concern in these economically challenging times.
Local Versus Connecting Traffic
Nearly every scheduled flight contains a mix of local and connecting traffic, with those connecting traffic flows on many occasions supporting the frequency of service between two cities.
Taking one example, the Atlanta to Orlando route somehow manages to support 28 daily services (with Delta Air Lines operating 15 of those) many of which would not be operated without connecting traffic. In Europe similar examples exist, which highlights the risk of dropping any short-haul flight that has traditionally had a high proportion of connecting traffic. The chart below shows the mix of local versus connecting traffic at some of Europe’s major hub airports in the last 12 months, highlighting the dependency on connecting flows.
Of the six hub airports analyzed two-thirds rely on connecting traffic for more than half of their base airlines traffic. Frankfurt is most exposed to the vulnerabilities of connecting flows, followed by Istanbul where in recent years the rapid capacity growth from Turkish Airlines - who fly to more countries than any other airline - has increased the need to build connecting traffic.
At the other end of the spectrum, London Heathrow has the lowest proportion of connecting traffic for British Airways which supports the fact that London has a larger catchment area for local demand than the other airports. Understanding the mix of traffic at an airport is not enough on its own, only by digging deeper can we understand what routes are perhaps over dependent on connecting flows, and indeed those where local demand alone is enough to support the current levels of service.
It's Good to be Connected
Every airline likes a proportion of connecting traffic, it helps:
- Fill what would otherwise be empty capacity,
- Reduce the risk of being reliant on just a few country markets,
- Provide some high-yields for those obscure connections; particularly to places such as West Africa, Latin America and Central Asia.
However, it’s easy for an airline to carry too much connecting traffic, especially low-yield connecting traffic. In the table below we have identified the ten routes for each base airline at their respective hubs with the highest proportions of connecting traffic, and some of those percentages are high!
Amongst each airport and airline's highest ranking routes with connecting traffic are a mix of feeder services to other alliance partner networks and some real niche markets where the airline has little or no competition. Amsterdam to Atlanta, for example, has 93% of passengers connecting either with KLM or their partner Delta Air Lines in Atlanta while looking at Istanbul and Turkish Airlines many of their major connecting points are very niche routes such as Kilimanjaro, Zanzibar or Mashad.
At the other end of the spectrum, there are some routes where local demand is so strong that connecting traffic has a low priority and - since it can displace local demand - those connecting flights are priced at a premium, with revenue management and network benefit frequently coming into play for the airline.
Many of the routes with a high local market content are either based around historic links or domestic routes, as is particularly the case in Istanbul and Spain. Whilst London City, from a pure market profile, with its unique catchment area characteristics explains its presence in the top local market routes for KLM and Lufthansa.
Beware The Ripple of Connectivity
Airline networks are complex, the scheduling of connecting flows crucial and the roles of partner airlines can be vital in feeding traffic to the network, as we can see in some of this analysis. Any imposed reductions in frequency and subsequent connectivity will affect not only the routes cut, but can destabilise a whole network which in turn could impact airline profitability, local employment and eventually the wider economy. And if that is the case then as the law of unintended consequences kicks in, the regulators that created those events may finally realise the true value of aviation to their communities and economies.
Let’s just hope it’s not too late by then...