Business aviation in Germany: An empirical and model-based analysis

The primary role of large airports is to serve the general public with scheduled and charter air transport services, with a secondary role of providing direct air transport access to regional industry and to firms who operate their own fleets of aircraft. Because of the complexity of slot allocation procedures and increasing runway capacity problems at airports, there is a growing problem in realising this secondary function. Neighbouring regional airports could play a complementary role and cope with some of this growth in traffic. Here we quantify the distribution of growing business aviation demand between airports to explore potential ways of accommodating it at both major and nearby secondary facilities.     

Low-cost carrier entry at small European airports: Low-cost carrier effects on network connectivity and self-transfer potential

Airport connectivity can improve the competitiveness of regions by attracting tourism and inward investment. Regions traditionally accessed international destinations via connecting flights to national gateway airports usually operated by full service network carriers (FSNC). However, the entry of low-cost carriers (LCC) in these markets has led to changes in incumbent FSNC service provision. We analyse how intra-European connectivity has changed at small airports between 2002 and 2012 and how LCC entry has affected the quality of day-return schedules in these markets. Results show that offline LCC connectivity is greater than that scheduled by FSNCs. Furthermore, LCC entry had a negative effect on the quality of the connectivity offered by FSNCs. Interestingly, we also found that day-return itineraries become more difficult for passengers in markets where the LCC is the sole operator. Regional policy-makers may need to more carefully consider the connectivity implications in the design of LCC start-up incentive schemes.     

A time–space network model for unit load device stock planning in international airline services

Unit load devices (pallets, containers, etc.) are used to move luggage and air cargo on wide-bodied aircraft. This paper examines a case study of the number of devices needed by an airline for international scheduled services. Unit load device movements between airports require planes to load and deliver. The stock of the unit load devices is thus influenced by the airline’s scheduled services. Based on a recurring weekly schedule, this study develops a time–space network to formulate mathematical programming models for minimizing device quantities. This model is applied to assess the preparation level of unit load devices for the various service networks for a Taiwanese airline.     

Market opportunity analysis and evaluation of the expansion of air transport services across the Taiwan Strait

Air transport services across the Taiwan Strait are rapidly developing. Taiwanese airlines are therefore facing a critical decision as to whether to expand their scheduled services beyond saturated markets. The Taiwanese government is also concerned regarding airline operators' willingness to enter new markets for next-round negotiations concerning traffic rights. This study proposes an Analytic Hierarchy Process (AHP) framework for Taiwanese airlines based on a market opportunity analysis (MOA) to evaluate the determinants of potential service expansion. A novel rank pair-wise comparison (RPC) is used to measure the relative weights among determinants. It is found that service provision for Taiwanese merchants is the most vital factor. Flight quotas and allowed time slots also affect airlines' willingness to expand operations. Other determinants depend on the individual airlines' development background and operating size. This study also evaluates twelve airports in mainland China using grey relational analysis (GRA) to rank the entrant priorities for additional scheduled services.     

Low-cost airlines,secondary airports,and state aid: An economic assessment of the Ryanair–Charleroi Airport agreement

This paper builds a vertical differentiation model to analyse the effects of subsidies, or lower aeronautical charges, for secondary airports on competition between low cost and full scheduled carriers. The Ryanair–Charleroi Airport agreement in Europe is used as an example and as a basis for the model. The main findings are that subsidization or lower airport charges benefit consumers and negatively affect incumbent airlines. However, they may be more affected by competition than by the subsidy. An empirical analysis provides a few insights on the influence of dominating airports in Ryanair fares. We conclude that this airline sets lower fares when flights depart from or arrive at dominated airports.     

Management of airport congestion through slot allocation

The lack of airport slots (the time allocated for an aircraft to land or take off), particularly at airports which experience congestion, have reached unmanageable proportions in recent years. The International Civil Aviation Organization (ICAO) records that, by the end of 1997, there were 132 slot controlled international airports. The World of Civil Aviation, 1997–2000. ICAO Circular 273-AT/113, p. 12 (118 year round and 14 during peak seasons). Between 1989 and 1998 the reported number of commercial aircraft in service increased by about 60% from 11,253 to 18,139 aircraft. In 1998, 1463 jet aircraft were ordered, compared with 1309 in 1997, and 929 were delivered compared with 674 aircraft in 1997. In 1998, the total scheduled traffic carried by airlines of the 185 Contracting States of ICAO amounted to a total of about 1462 million passengers and about 26 million tonnes of freight. These figures¹ are reflective of the rapidly increasing frequency of aircraft movements at airports, calling for drastic management of airport capacity. To cope with the demand, airlines are forming strategic alliances with themselves by utilizing such commercial tools as franchising, leasing and interchange of aircraft. The management of airport capacity through slot allocation is a critical consideration for the world aviation community. This article analyses the problem and discusses various issues related thereto.     

Airport competition - Regional airports losing ground to main airports

Regional airports in Norway are losing market shares to nearby main airports on flights to the national capital, Oslo, and on international travel via Oslo. Travellers are willing to spend several hours extra driving to a larger airport in order to take advantage of lower fares and more convenient airline services. Traffic leakage from regional airports is high when the service from the regional airport is indirect and fare differences are large. Public service obligation tenders (PSO) set maximum fares on the regional legs, but do not cover through travel from regional airports which involve commercial legs. Traffic leakage is particularly evident in the leisure segment. Leakage levels tend to increase as competition is intensified at main airports, but the evidence is rather mixed. Logistic curves of airport market shares have proven to be useful when comparing spatial variations in leakage levels.     

Spatial distribution characteristic of Chinese airports: A spatial cost function approach

This paper uses spatial econometric models to analyze the spatial distribution of Chinese airports from 2002 to 2012, taking into consideration the factors that explain the distribution of airports around the country. A cost function allowing for latitude and longitude is estimated based on spatial location, which leads us to advise the implementation of policies that take into account the spatial distribution of the airports. Results show that the development of airports in China needs to consider the spatial relationship among the many different regions of China. To improve the cost efficiency, airports should be located in more economically developed areas. Meanwhile, it also helps to reduce the cost when listing on the stock market.     

Sustainable airport development with performance evaluation forecasts: A case study of 12 Asian airports

This study evaluates airport performance from 2014 to 2021 with actual and forecasted data to help plan airport sustainability and establish sustainable airport development strategies. Eight Chinese airports (PEK, PVG, CAN, SZX, SHA, XMN, HAK, and HKG) and four representative Asian airports (HND, ICN, SIN, and DEL) are studied. Airport performance is evaluated from the process level (i.e. operational processes providing aeronautical service and financial processes providing commercial service) to the airport level using the Network DEA with actual and forecasted data from the grey model. Results indicate that HKG has been and will be efficient for the entire study period. There is an observed trend of an overall efficiency decrease during the forecast period of 2018–2021. This study classifies operationally efficient airports (PEK, HND, and XMN) and financially efficient airports (HAK, ICN, and DEL). Mainland Chinese airports show significantly higher operational efficiency than financial efficiency, and lower rankings in overall efficiency. It is expected that mainland Chinese airports will soon develop beyond the transportation center, possibly towards the aerotropolis, balancing economic, social, and environmental aspects for sustainable development. This study helps airport management to evaluate sustainable development strategies by assessing current and near future conditions affecting sustainability.     

Evaluating financial performance of commercial service airports in the United States

Studies on airport performance have focused primarily on productivity and operational efficiency. There are very few studies on airports’ financial viability and strength, especially those in the United States. Most of the U.S. commercial service airports are government-owned entities and operated for the service of the community rather than for profit, but expected to be financially self-sufficient and raise capital funds mainly through the bond markets. However, past studies of the financial performance of U.S. airports have relied on traditional profitability measures and financial efficiency measures that are more appropriate for airports owned and operated by for-profit entities. Based on the literature for non-profit organizations and the practices of credit rating agencies and government oversight bodies, this paper adopts six pertinent financial performance metrics to measure and compare the operational financial performance, leverage, and liquidity of 60 large and medium commercial service airports in the United States during the 2010–2017 period. The paper further examines factors that may affect airport financial performance. The results reveal that large hub airports have better liquidity while medium airports have better leverage during the study period. These results suggest that the effect of airport size on financial performance is inconclusive. Regression analysis shows that airports with high productive efficiency and those without a dominant carrier tend to have more surplus revenues for meeting their operational financial needs and capital spending and have better liquidity. The paper highlights the importance of using appropriate metrics to evaluate the financial performance of public sector entities and provides relevant information to bond investors. The devastating impacts of the COVID-19 pandemic on airports accentuate the significance of leverage and liquidity. Therefore, the financial metrics discussed in this paper would help support public policy debates and allocate public funds to the airports.     

A welfare analysis of subsidies for airports

The welfare of residents and profitability of business in many medium-sized MSAs would be improved if their airports had a higher level of service, for example reflected by more frequent flights serving more destinations. The level of service at such airports may rise with the number of enplanements, making total enplanements and the level of service subject to a positive feedback effect. Using a new annual data set put together by combining five sources for the years 2002 through 2012, we find evidence for such a positive feedback effect. We argue that subsidies at smaller airports may be welfare-enhancing in the presence of such an effect.     

Evaluating the service quality of airports in Thailand using fuzzy multi-criteria decision making method

The highly competitive aviation industry necessitates for continuous improvement in service quality of airports. The study has attempted to investigate the service quality of two gateway airports of Thailand, Suvarnabhumi (BKK) and Don Mueang (DMK) and has identified the scope of improvements. The service quality of the airport was investigated using the Fuzzy Multi Criteria Decision Making (MCDM) Method. It also employs Improvement Performance Analysis using a fuzzy expert system which renders the managerial implications pertaining to identification of improvement areas. The findings of the study, exhibit that the service quality of both the airports, BKK and DMK, is satisfactory, however some areas require improvement which was identified and suggested. The study demonstrates and signifies that the Fuzzy MCDM method is promising and pragmatic decision making tool for the airport service quality measurements.     

The impact of regional jets on air service at selected US airports and markets

Regional jets, normally defined as jet aircraft introduced since 1993 with less than 100 seats, have been thought to have significant impacts on air services at airports, for example, in improving service frequency, allowing airlines to exploit niche markets and to feed hubs. Previous studies have focused on regional jet deployment strategy and the overall situation and they suggest that deployment was generally to larger cities first and, in addition, to locations east of the Mississippi. It has also been suggested that smaller airports might lose service when regional jets replace turboprops and that carrier competition would increase, to the benefit of the consumer.This paper aims to throw more light on these issues from the individual airports' point of view. Data on changes in schedules from the Official Airline Guide (OAG) at a series of case study airports from 1994 to 2002 is used to examine, the impacts on new route development, market dynamics, carrier competition and concentration and deployment status. In particular, the impact on smaller airports is examined.It is concluded, subject to the usual caveats on sample size, that there is little evidence of a uniform impact on routes or airports. The aggregate picture often described by the industry and government is shown to be a combination of highly dissimilar cases. A spectrum of effects is identified across different types of airports and routes but some of the anticipated trends, such as hub bypassing, are not observed. Some airports reaped significant benefits in terms of improved frequency and services to new destinations, whilst others gained little.     

Inter-metropolitan airport substitution by consumers in an asymmetrical airfare environment: Harrisburg, Philadelphia and Baltimore

Airfares vary significantly over space, and can even vary substantially between airports in relatively close proximity with one another. With the spread of various Web tools, consumers are armed with more information than ever to assess fare and service differences between competing airlines and competing airports. This leads to the possibility of airport substitution for particular routes. Linear regression models are developed that suggest, despite the 70–90 mile distance, that passenger substitution may be occurring from Harrisburg and Philadelphia to Baltimore based as a result of differential fares, low-fare service, and other factors.     

Large volcanic eruptions and their influence on air transport: The case of Japan

Our research purpose is to estimate the impact of large volcanic eruptions on air transport and discuss how to reduce their negative impact through emergency operations. In particular, we focus on East Asia, where ash from the eruptions impedes air transport. First, we use Collaborative Actions for Renovation of Air Traffic System (CARATS) Open Data that are provided by the Civil Aviation Bureau (CAB) of Japan and estimate how many flights will be affected by volcanic ash. Furthermore, we discuss the dispersal of the volcanic ash that was discharged by the large-scale eruptions of Mount Sakurajima. This crossed over the main part of Japan from west to east. Through a simulation, we found that a volcanic eruption that lasts 14 h would cause a substantial number of the airports, including the major gateway airports, in Japan to be shut down simultaneously. It would also cause half of the airports’ scheduled flights to be cancelled or diverted. Subsequently, based on the impact estimation, we discuss the possibility of provisionally parking aircraft outside the damaged areas. Our results suggest that the airports located in the northern Tohoku area and the New Chitose airport are the best to accept evacuation flights to avoid risks in aviation following a volcanic eruption.     

Gravity models for airline passenger volume estimation

This paper presents two gravity models for the estimation of air passenger volume between city-pairs. The models include variables describing the general economic activity and geographical characteristics of city-pairs instead of variables describing air service characteristics. Thus, both models can be applied to city-pairs where currently no air service is established, historical data is not available, or for which factors describing the current service level of air transportation are not accessible or accurately predictable. One model is limited to city-pairs with airports not subject to competition from airports in the vicinity, while the other model includes all city-pairs. Booking data of flights between Germany and 28 European countries is used for calibration. Both models show a good fit to the observed data and are statistically tested and validated.     

A spatial analysis of air transport access and the essential air service program in the United States

In the United States, the goal of essential air service (EAS) is to provide a minimum level of air transport service from smaller, often remote communities to the national network. While supporters of EAS tout the economic benefits of connecting rural and isolated communities, critics cite high costs, low use and antiquated eligibility requirements as factors which compromise the value of the program. In this paper, a comprehensive database of US airports is combined with network analysis techniques and a geographic information system to evaluate population access (at the census tract level) to EAS airports for 2006. Results suggest that redundant coverage of EAS market areas by alternative Federal Aviation Administration designated hub airports can contribute to EAS airport market leakage and that alternative definitions of EAS community eligibility have the potential to dramatically increase programmatic efficiency and reduce federal monies spent on EAS subsidies.     

Characterization of delay propagation in the air traffic network

We build a delay propagation network based on Bayesian Network approach to study the complex phenomenon of delay propagation within a large network consisting of the 100 busiest airports in the United States. Through topological analysis and probability analysis, we investigate the characterization of delay propagation among airports and the impact of different types of airports on delay propagation. Results indicate that the cumulative degree distribution of the delay propagation network follows an exponential function and flight delays take at most one transhipment to go from each airport to any other airports on average. For each individual airport, the effects of delay propagation are associated with airports size (traffic flow), small airports are easily affected by other airports while large airports are more affecting downstream airports but fewer affected by upstream airports. Finally, we show how the number of affected airports changes as a function of the delayed airports based on different simulation strategies.     

An assessment of delivery changes for UK terminal air navigation services

In order to meet government contestability policy ambitions, the United Kingdom Civil Aviation Authority (CAA) has undertaken a range of initiatives to create a competitive market for terminal air navigation services (TANS). This paper examines the critical dynamics underlying recent TANS service delivery changes at the nine United Kingdom airports that fall within the Single European Sky performance scheme (SES) using industry data and Porter's five forces model. Interviews with CAA, NATS and airport operators, along with publically available material, are used to explore the various elements impacting competition for TANS at these airports. Competition is intense among a very small number of companies. In addition to optimizing service cost, airport operators require greater value for money including alignment to strategic-operational goals, closer integration with other airside functions and payment structures that are performance based. Gatwick and Birmingham airports changed service provisions due to concerns about the value for money proposition offered by NATS Services Ltd (NSL). This paper also illustrates how competition has changed the customer orientation of NSL. It has been forced to evolve quickly from an expensive, perceived as somewhat arrogant, organisation to one that must be capable of aligning to the cost and service requirements of its customers. Importantly for the ATM industry this paper provides evidence that competition drives lower service costs and provides greater value for money for airlines and airport operators.     

Airport regulation in Europe: Is there need for a European Observatory?

This paper provides an overview of how the major airports are regulated in Europe. In order to eliminate the potential of airports to exercise market power and protect the public interest, it has become increasingly necessary to set a common regulatory framework. We intend to discuss the need for a single regulator in Europe to monitor or establish the quality of service and the charges practiced by the airports, to ensure cost-relatedness, transparency and non-discrimination. The existing regulatory approaches regarding aeronautical charges and their economic implications are also analyzed. We propose the creation of a European Observatory for this sector.