Measuring connectivity in the air freight industry

In this paper, we present an air transport connectivity model for air freight. For the purposes of this paper, connectivity is defined as all possible direct and indirect connections to or from an airport operated by wide-body aircraft, weighted for the quality of the connection in terms of transhipment and in-flight times. Using this model, we analyse the networks of seven European airports. Europe’s largest hub airports carry most air freight thanks to their extensive intercontinental passenger networks, while smaller airports with a strong focus on air freight carry large amounts of cargo on dedicated freighter aircraft. For air freight operations, the catchment area of an airport is much larger than it is for passenger services, as shipments are being trucked to their departure airport throughout all of mainland Europe. Since there are many airports sharing the same catchment area, potential competition for air freight is fierce. We found that well located regions between the four large European airports have access to large air freight networks, whilst regional air freight connectivity in northern and southern parts of Europe is substantially lower.     

Lessons learnt from the market for air freight ground handling at Amsterdam Airport Schiphol

On 16 April 2013, the European Parliament adopted a new, amended airport ground handling Regulation, which will replace the old Directive 96/67 EC on ground handling services. The new Regulation will further open up European airports for competition on the ground handling market. Even long before the introduction of Directive 96/67/EC, Amsterdam Airport has had a liberalised handling regime. Against the background of the further liberalisation of the European ground handling market, this paper investigates the characteristics of the open ground handling market for air cargo at Amsterdam Airport and the lessons that can be learnt from the Amsterdam experience. We find that an open handling market brings greater freedom of choice for airlines and lower handling fees. However, we do not see any (serious) market failure for the airport that would justify intervention by the market regulator, by limiting the number of handlers for example.     

An airline's management strategies in a competitive air transport market

Over the last decade, the demand for domestic and international flights in Korea has increased substantially. To meet the strong flight demands, several low cost carriers have begun to offer flight services. In addition, full service carriers have been motivated to establish their own subsidiary low cost carriers to maintain their market share against rival low cost carriers. This paper studies the management strategies of three kinds of airlines - full service carrier, its subsidiary low cost carrier and rival low cost carrier - based on game theory in the competitive air transport market. Each airline is assumed to act as a player and chooses strategies regarding airfare, flight frequency, and the number of operating aircrafts for specific routes while maximizing its own profits. Demand leakages between the airlines are considered in the flight demand function according to the selected strategies of all airlines. Through various game situations reflecting realistic features, this study provides managerial insights that can be applied in the competitive air transport market.     

Challenges to domestic air freight in Australia: Evaluating air traffic markets with gravity modelling

With two of the busiest air traffic corridors globally, Sydney-Melbourne (SYD-MEL) and Sydney-Brisbane (SYD-BNE), very liberal open skies agreements, and the world's most isolated large city in Perth, air freight in Australia should be destined for substantial growth, but has in contrast to other regions such as the US not yet materialised. This paper identifies challenges surrounding domestic air freight markets in Australia and compares the provision of road vs air freight services utilising gravity modelling methods. Our findings suggest the impedance of domestic air freight services in Australia is greater for regional areas between the primary cities (such as Canberra, between Sydney and Melbourne) than remoter areas (such as Cairns in Northern Australia). Our models show further that in addition to distance, air freight capacity on any of our analysed routes is despite being demand-pulled in terms of GDP dependency significantly attuned to factors at both the origin (in particular domestic trade capability, i.e. manufacturing and logistics) and destination.     

做大做强客货运输核心业务增强铁路运输企业市场竞争力

做大做强铁路客货运输核心业务,是新形势下转变铁路发展方式的客观需要,也是促进铁路运输企业可持续发展的必然要求。结合郑州铁路局实际。探讨如何通过提升运输效益、提升运输效率和提升服务质量,做大做强客货运输核心业务,增强铁路运输企业市场竞争力。     

An agent based model concept for assessing modal share in inter-regional freight transport markets

This paper introduces an Agent based modelling approach to model inter-urban freight transport between two or more trading regions. The use of the model is to ascertain the modal share of competing transport modes (road and intermodal) while taking complex transport service supply–demand dynamics into account. It is structured by modules describing company generation, supplier choice, modal competition and International road freight transport market dynamics. The behaviour of individual actors is simulated using normative agent behaviour and market knowledge. Using the micro-simulation approach, shippers and carriers (primarily road hauliers and a maritime based intermodal operator) interact through simulated contracts resulting in the generation of tours. The service performance of the tours is fed back into the model for decision making during contract deliberations. Preliminary application of model to Mediterranean case study show that market share gains of around 25–30% are obtained with policy interventions of financial subsidies to intermodal services and more frequent shipping services in the intermodal transport respectively.     

Air freight hubs in the FedEx system: Analysis of fuel use

This paper provides a data based analysis of FedEx air freighter activities from selected hub locations. The basic idea is that air freighters have a set of range and payload parameters and their corresponding fuel burn depends on weight and distance. Data from 2011 to 12 (FlightAware) are used for 180,000 + flights on origin, destination and aircraft type. The particular aircraft vary widely in payload, but additional parameters may be derived from industry web sites and BTS. The research uses flight activity at hubs such as Memphis and Indianapolis (among others) and computes the aggregate distance flown on specific aircraft. The linkage between the hub and aggregate fuel use (assuming that the out bound flights are allocated to the hub) will give some quantifiable measures of the costs allocated to the hub. The paper examines particular aspects of the air freight system that are especially vulnerable to a spike in the costs of aviation fuel. These observations suggest that traffic to regional air express and air freight hubs is likely to respond in complex ways to fuel costs.     

On the multi-dimensionality and sampling of air transport networks

Complex network theory is a framework increasingly used in the study of air transport networks, thanks to its ability to describe the structures created by networks of flights, and their influence in dynamical processes such as delay propagation. While many works consider only a fraction of the network, created by major airports or airlines, for example, it is not clear if and how such sampling process bias the observed structures and processes. In this contribution, we tackle this problem by studying how some observed topological metrics depend on the way the network is reconstructed, i.e. on the rules used to sample nodes and connections. Both structural and simple dynamical properties are considered, for eight major air networks and different source datasets. Results indicate that using a subset of airports strongly distorts our perception of the network, even when just small ones are discarded; at the same time, considering a subset of airlines yields a better and more stable representation. This allows us to provide some general guidelines on the way airports and connections should be sampled.     

Robustness of the air transport network

This paper presents a methodology for the detection of critical airports (those whose isolation would cause the largest losses in network connectivity) in the global air transport network (ATN), based on simulating an attack on selected ATN airports using different adaptive selection criteria. The performances of several node selection criteria are compared, together with a new criterion based on Bonacich power centrality. The results show that most critical airports can be detected with an adaptive strategy based on betweenness centrality. The detection of such airports may help the development of contingency plans to develop an appropriate response to any airport closure.     

The pricing responses of non-bag fee airlines to the use of bag fees in the US air travel market

Using a panel data for Southwest and JetBlue in the 1st quarter of 2009, 2011, and 2013, we develop an empirical study and find evidence suggesting that the amount of bag fee charged by bag fee airlines, including those direct rivals at the route level and indirect rivals competing from adjacent airports, has a positive and significant effect on the airfare of non-bag fee airlines and such a positive association is smaller on vacation-oriented routes, but greater on routes with higher per capita income at endpoint cities. Moreover, the results are found that on the routes where Southwest is the only non-bag fee airline, the amount of bag fee charged by other airlines has a positive and significant effect on the traffic volume of Southwest. This traffic increasing effect, however, may be offset by the higher airfare of Southwest in response to other airlines’ imposition of bag fees.     

竞争性综合运输中公路货运定价的研究

利用双层优化方法,将公路货运企业的经营目标函数和客户的选择函数统一考虑,分析了在客户选择最优基础上的公路货运定价问题,通过构建模型,求解得到货运价格。该价格是满足消费者福利剩余最大化的价格,有利于社会资源的优化配置和公路货运企业、综合运输市场的发展。     

Investigations on the distribution of air transport traffic and CO2 emissions within the European Union

This study analyses the structure of air traffic and its distribution among the different countries in the European Union, as well as traffic with an origin or destination in non-EU countries. Data sources are Eurostat statistics and actual flight information from EUROCONTROL. Relevant variables such as the number of flights, passengers or cargo tonnes and production indicators (RPKs) are used together with fuel consumption and CO₂ emissions data. The segmentation of air traffic in terms of distance permits an assessment of air transport competition with surface transport modes.The results show a clear concentration of traffic in the five larger countries (France, Germany, Italy, Spain and UK), in terms of RPKs. In terms of distance the segment between 500 and 1000 km in the EU, has more flights, passengers, RTKs and CO₂ emissions than larger distances. On the environmental side, the distribution of CO₂ emissions within the EU Member States is presented, together with fuel efficiency parameters. In general, a direct relationship between RPKs and CO₂ emissions is observed for all countries and all distance bands. Consideration is given to the uptake of alternative fuels. Segmenting CO₂ emissions per distance band and aircraft type reveals which flights contribute the most the overall EU CO₂ emissions. Finally, projections for future CO₂ emissions are estimated, according to three different air traffic growth and biofuel introduction scenarios.     

武汉铁路局客运市场分析及营销对策建议

针对武汉铁路局从2006年至2011年客运量持续增长现象,结合武汉铁路客运市场特点,分析客运量持续增长的原因。根据2012年客运营销目标,探讨营销思路,提出在市场开发、推广渠道、激励机制、营销重点、营销机制、服务质量等方面应采取的具体营销对策。     

Mapping causalities of airline dynamics in long-haul air transport markets

The introduction of low-cost air transport services to short-haul routes has significantly shaped the structure of this market segment. Recent research investigates and discusses the transferability of the low-cost carrier business model to long-haul routes and identifies respective challenges such as lower cost advantages over the competing full-service network business model. Our paper complements the existing research with a review of airline dynamics in long-haul air transport markets and the subsequent development of a causal loop diagram of the transatlantic air transport market using systems thinking. The objective of this paper is to provide an overview of specific characteristics regarding airline operations in the transatlantic air transport market to investigate the market potential of long-haul low-cost carriers competing with full-service network carriers in this market. We implement these characteristics in a causal loop diagram which comprises the most important elements of and causalities within the long-haul air transport market that affect the development of these elements. These include the generation of transatlantic air transport demand, passenger choice, and airline ticket price and fleet development. The causal loop diagram serves as a framework for qualitative investigation of the market potential of long-haul low-cost services. The paper proves systems thinking to be a feasible approach to map causalities based on knowledge from scientific literature.     

Exploring the network structure and nodal centrality of China’s air transport network: A complex network approach

This paper uses a complex network approach to examine the network structure and nodal centrality of individual cities in the air transport network of China (ATNC). Measures for overall network structure include degree distribution, average path length and clustering coefficient. Centrality metrics for individual cities are degree, closeness and betweenness, representing a node’s location advantage as being directly connected to others, being accessible to others, and being the intermediary between others, respectively. Results indicate that the ATNC has a cumulative degree distribution captured by an exponential function, and displays some small-world (SW) network properties with an average path length of 2.23 and a clustering coefficient of 0.69. All three centrality indices are highly correlated with socio-economic indicators of cities such as air passenger volume, population, and gross regional domestic product (GRDP). This confirms that centrality captures a crucial aspect of location advantage in the ATNC and has important implications in shaping the spatial pattern of economic activities. Most small and low-degree airports are directly connected to the largest cities with the best centrality and bypass their regional centers, and therefore sub-networks in the ATNC are less developed except for Kunming in the southwest and Urumchi in the northwest because of their strategic locations for geographic and political reasons. The ANTC is relatively young, and not as efficient and well-developed as that of the US.     

The growing influence of low-cost carriers in Northeast Asia and its implications for a regional single aviation market

This paper provides an overview of the development of the low-cost carrier (LCC) sector in China, Japan, and South Korea. It is the first paper that documents LCC contributions to the passenger traffic and cheaper fares in Northeast Asia (NEA)'s intra-markets. We argue that a single aviation market can facilitate the growth of the LCC sector, which in turn will make a significant contribution to the NEA connectivity, mobility, and integration. In addition, with a single aviation market, NEA countries can adopt a proactive, unified approach in negotiating air transport agreements with the major aviation partners to maximize the interests of this region as a whole, which will further provide valuable growth opportunities for the LCCs.     

Monopoly and optimal nonlinear pricing: the case of route monopolies and heteregeneous demand in the air transport market

This paper explores the robustness of the one-dimensional screening model with respect to increasing the number of instruments and the number of characteristics. We study a case of nonlinear pricing (2 instruments (2 routes on which the airline provides customers with services), 2 characteristics (demand of services on these routes) and two values per characteristic (a low or a high demand of services on these routes)) and we show that none of the conclusions of the one-dimensional analysis remain valid. In particular, upward incentive compatibility constraint may be binding at the optimum. As a consequence, they may be distortion at the top of the distribution. In addition to this, we show that the optimal solution often requires bundling, while it is sometimes optimal for the monopolist to produce only one good or to exclude some buyers from the market. This means that the monopolist cannot fully apply his monopoly power and is better off selling two goods independently. We define all possible solutions in the case of a quadratic cost function for a uniform distribution of agent types and demonstrate that the range of services proposed by an airline is often larger than the corresponding range in demand.     

Forecasting temporal world recovery in air transport markets in the presence of large economic shocks: The case of COVID-19

This paper estimates the relationship between the strength of economic shocks and temporal recovery in the world air transport industry. Our results show that world recovery of passenger demand to pre-COVID-19 levels is estimated to take 2.4 years (recovery by late-2022), with the most optimistic estimate being 2 years (recovery by mid-2022), and the most pessimistic estimate 6 years (recovery in 2026). Large regional differences are detected, Asia Pacific has the shortest estimated average recovery time 2.2 years, followed by North America 2.5 years and Europe 2.7 years. For air freight the results show a shorter average world recovery time of 2.2 years compared to passenger demand. At the regional level, Europe and Asia Pacific are comparable with average recovery times of 2.2 years while North America is predicted to recover faster in 1.5 years. The results show that the strength of economic shocks of various origins impacts the linear growth of passenger and freight traffic and the temporal recovery of the industry in a predictable transitory way. Hence, the impact of the COVID-19 recession will represent a temporary, although long-lasting, correction to previous growth levels.     

New SP-values of time and reliability for freight transport in the Netherlands

This paper discusses the methods used in a study on the values of time and reliability in freight transport in the Netherlands. SP surveys were carried out among more than 800 shippers and carriers. A novel feature is that both for the value of time and reliability two additive components are distinguished: a transport cost and a cargo component. Specific instructions were given to make sure that the carriers provide the former and shippers that contract out the latter component. The resulting values that will be used in CBA in The Netherlands are presented and compared against the international literature.     

Mode choice behavior analysis of air transport on the introduction of remotely piloted passenger aircraft

Remotely piloted aircraft (RPA) are expected to be applied to passenger aircraft; however there is a lack of research which analyzes choice behavior for RPA compared to conventionally piloted aircraft (CPA), in terms of socio-demographic characteristics. The purpose of this paper is to present a model for air travelers’ mode choice behaviors under the assumption that RPAs are introduced to the market. Results show that the fare of RPA should be lowered by a certain amount (i.e., discount factor of RPA) to compete with CPA, and the discount factor should be higher for older, female, and frequent travelers. The results also show that there are still concerns about RPA, and pilot on board is preferred. Through this study, it will be possible to predict the acceptance of newly introduced technology in consideration of socio-demographic characteristics of potential customers.