Airline and railway integration

Most of the transport literature only looks at mode alternatives in competition with each other, rather than exploring the potential for cooperation. This paper examines this possibility by making the case for aircraft and high speed train (HST) substitution under conditions of intermodal integration. In the model suggested, airlines use railway services as additional spokes in their network of services from a hub airport to complement and substitute for existing aircraft services. Airlines benefit from the slots that are freed and they can support mode substitution. Society gains from the social and economic benefits of better integrated transport services at a lower environmental cost. This paper examines this model of integration at Heathrow airport against the background of UK air transport policy and assesses the benefits and limitations of it. The conclusion reached is that some railway infrastructure should also be seen as part of the air transport infrastructure.     

Does liberalisation of air transport imply increasing competition? Lessons from the European case

The liberalisation of European airspace opened up unprecedented freedoms to Community airlines. This theoretically allows for increased competition. This article inquires into the quantification and the geography of the services offered in Europe that enjoy competition. Undoubtedly, competition appears to have increased but has certainly not become the general rule, notably because liberalisation has led to the creation of many new air routes operated by a single airline. Competition primarily benefits passengers in the large European cities, as well as those in peripheral regions that receive major tourist flows from the big cities in the northern parts of Western Europe.     

International air transportation and economic development

Legislation in 1977 and 1978 effectively deregulated the US domestic air cargo and air passenger transportation industries. International air transportation, largely as the result of the ‘Open Skies’ initiative from 1979 has also gradually been liberalized but progress has been geographically and temporally uneven. This study is concerned with extending the Open Skies concept and in accessing the benefits to the US economy of removing the remaining impediments to the provision of free market services involving, in particular, the full transatlantic market. It initially reviews some of the previous work that has looked at links between industrial location and the quality of international air transportation. It develops a modeling framework to examine the implications of further liberalization on the economies of US regions that currently have limited international services. The work involves a macro-analysis of the impact of European international services for 41 Metropolitan Standard Areas.     

Informal transport: A global perspective

Informal transport services—paratransit-type services provided without official sanction—can often be difficult to rationalize from a public policy perspective. While these systems provide benefits including on-demand mobility for the transit-dependent, jobs for low-skilled workers, and service coverage in areas devoid of formal transit supply, they also have costs, such as increased traffic congestion, air and noise pollution, and traffic accidents. This article reviews the range of informal sector experiences worldwide, discusses the costs and benefits of the sector in general and uses several case studies to illustrate different policy approaches to regulating them.     

Airline franchising in Europe: benefits and disbenefits to airlines and consumers

Franchising has become an increasingly important commercial strategy for Europe's airlines as they seek to strengthen their position in the deregulated marketplace. This paper examines the practice of airline franchising in Europe since its inauguration by British Airways in 1993 and its subsequent adoption by most of the other major carriers. The advantages and disadvantages for both franchisor and franchisee airlines are investigated, drawing upon evidence from the operation of scheduled air services in Europe. Consideration is then given to the benefits claimed for consumers and the effect of franchising on competition. A generally positive picture arises, particularly in international markets. There are however incipient signs that where franchising leads to one major carrier becoming too dominant in its domestic market, the scope for competition and new entry is becoming suppressed.     

A comparative analysis of the application and use of public service obligations in air transport within the EU

The paper seeks to compare and contrast how different European Economic Area member states have adopted and made use of the public service obligation (PSO) mechanism in air transport. Analysis shows that there is considerable variation in the extent and way in which various countries have adopted the PSO mechanism. Some countries, such as France, the Irish Republic and Norway, have made extensive use of PSOs on their domestic scheduled air services networks. This is in contrast to the approach adopted in the United Kingdom, where a number of lifeline air services are vulnerable to potentially adverse airline pricing and output decisions. This suggests that there are major inconsistencies in the approach and commitment to social air services provision across the European Union which may undermine broader policy initiatives designed to enhance mobility and accessibility.     

An empirical analysis of Canadian international air policy: effects of dual carrier designation and partial liberalization

This paper assesses the impact on air traffic of Canada's policy of allowing two Canadian flag carriers (dual-designation) to operate in select Canadian international markets. The secondary objective is to assess the effect of Canada's partially liberalized bilateral air services agreements. Using panel data covering Canada's 33 bilateral markets over the 1982–1994 period, we find the following results: (a) dual designation/operation of Canadian carriers in a country-pair market increases total traffic volumes in the market as well as increases the combined passenger volume and market share of Canadian carriers, and (b) Canada's partially liberalized bilateral air services agreements have significantly increased air traffic in those country-pair markets.Two policy implications follow from this research. First, Air Canada's recent merger with Canadian Airlines is expected to have a significant negative impact on total traffic volumes as well as on Canadian carrier traffic volumes and market shares on the country-pair markets both Air Canada and Canadian served previously. Second, not only the US style full liberal bilaterals or open skies, but also partial liberalization of bilateral markets Canada adopted appears to generate consumer welfare benefits.     

Locational determinants of major US air passenger markets by metropolitan area

The paper examines the influence of metropolitan characteristics in determining the locations of major air traffic markets in the US. In general, the likelihood of a major air passenger market locating in any given metropolitan area is primarily determined by the metropolitan area's population size and overall propensity for air travel. The study shows that on average, a major air passenger market has over 3 million people while a minor market has a population base of about 760,000. The propensity of a population to fly is mainly a function of a number of social and economic indicators, the most important of which was found to be employment in professional–scientific–technical services and management activities.     

Making or breaking - Key success factors in the air cargo market

This introductory paper considers a number of major evolutions in the air freight market. In the first instance, it describes the heterogeneous environment in which air cargo services are performed. Subsequently, it looks at some of the most notable developments in air freight. Lastly, it deals with the market structure and with possible future strategies.     

Impact of airports on regional accessibility and social development

This study compares the impact that two airports in Norway have on regional accessibility and social development. One of the airports is a small-sized airport that serves a relatively remote region and has direct air services to other regions in Norway but not to the capital city of Oslo or to destinations abroad. The other is a medium-sized airport that serves a relatively accessible region and has direct air services to the capital city of Oslo and to a number of destinations in Norway and abroad. The study compares opinions of residents that live in the respective regions and is based on the findings of a postal survey that was completed by over 2000 residents. The Independent Samples t-test is used to investigate the significance of any differences in opinion. Significant differences were found to reflect the size and scope of services available at the airports and specific characteristics of the regions that they serve. Residents in the more remote region have a significantly higher frequency of travel by air to destinations in Norway but a significantly lower frequency of travel by air to destinations abroad. Trip frequency for holidays is significantly higher in the region that has an airport with direct international air services while trip frequency to access health services is significantly higher in the region that has limited local health services. The airport is significantly more important for resident location and retention in the remoter region.     

Regional aviation and economic growth: cointegration and causality analysis in Australia

Air transport is a critical link to regional, rural and remote communities in Australia. Air services provide important economic and social benefits but very little research has been done on assessing the value of regional aviation. This research provides the first empirical evidence that there is short and long run causality between regional aviation and economic growth. The authors analysed 88 regional airports in Australia over a period of 1985–86 to 2010–11 to determine the catalytic impacts of regional air transport on regional economic growth. The analysis was conducted using annual data related to total airport passenger movements – for the level of airport activity, and real aggregate taxable income – to represent economic growth. A significant bi-directional relationship was established: airports have an impact on regional economic growth and the economy directly impacts regional air transport. The economic significance of regional air transport confirms the importance of the airport as infrastructure for regional councils and the need for them to maintain and develop local airports. Funding should be targeted at airports directly to support regional development.     

An exploratory empirical analysis of willingness to hire and pay for flying taxis and shared flying car services

A new transportation mode that can simultaneously operate on land and in the air, namely the flying cars, is anticipated to penetrate the automobile fleet between 2020 and 2025. Due to their flexible mobility patterns and automated operational characteristics, flying taxi and shared flying car services are expected to expand the existing shared mobility services (such as Uber, Lyft, and similar services) of the urban transportation network. Despite their forthcoming introduction in the shared mobility market, public perceptions and expectations about these services have not been investigated in travel demand literature. This study aims to provide an exploratory analysis of public willingness to hire and pay for flying taxis and shared flying car services, and to identify the determinants of the willingness to hire and pay for such services. Using data collected from an online survey, individuals' willingness to hire and to pay for flying taxi and shared flying car services are statistically modeled within a correlated grouped random parameters bivariate probit framework. The analysis shows that various socio-demographic characteristics and individuals’ opinions towards the perceived benefits and challenges of flying cars affect public willingness to hire and pay for flying taxi and shared flying car services. Even though the awareness about the operation of flying taxis and shared flying car services is possibly limited in the public sphere, the findings of this study can provide insights into the challenges that policymakers, manufacturing companies, and shared mobility providers will face with the introduction of such flying car services in the transportation networks.     

Impacts of high-speed rail on domestic air transportation in China

This study investigates the impacts of high-speed rail (HSR) on domestic air transportation in China using a new comprehensive modeling framework utilizing both demand and supply perspectives. For the first time the assessment was conducted using an improved panel regression model by taking into account of the detailed opening schedules of various HSR services during the period 2001–2014. The research findings reveal that the deployed HSR services have a significant substitutional effect on domestic air transportation in China, but the effect varies across different HSR routes, travel distance and city type. Specifically, the research found a decrease in domestic passengers of 28.2%, in flights of 24.6% and in seat capacity of 27.9% after the introduction of HSR services. The impacts are found much stronger among those air routes that connect major hub within a distance range of 500 to 800 km. The uneven nature of the impact can be seen in the different experiences of selected cities. For example, air travel declined approximately 45% after commencement of the Wuhan-Guangzhou HSR, whereas it fell by 34% after the opening of the Beijing-Shanghai HSR.     

High-speed rail and regional development: the case of intermediate stations

High-speed rail has developed both nationally and internationally in Europe as a successful alternative to both air and road over distances of 400–600 km. Inter-city traffic, especially between the major metropolitan areas in North-west Europe has benefitted greatly from the investment in this network. This paper explores two issues: the impact on the intermediate areas between these major metropolitan areas and the creation of potential cross-border inter-regional services. The evidence shows how both levels of service and potential economic impacts have been much less pronounced in these intermediate areas. Such areas have been affected both by a failure to see greatly improved direct access to major cities other than within their own countries and a lack of new cross-border inter-regional services. The paper argues that the creation of the high-speed rail TEN-T has not met the primary objectives of reducing regional disparities in accessibility or reducing the effect of national borders on regional integration. To achieve this requires not just infrastructure provision but an appropriate regulatory framework for service provision and accompanying measures at the local level.     

Competition and cooperation between high-speed rail and air transportation services in Europe

New high-speed rail (HSR) lines may have an enormous influence on the provision of air services. The attention has been devoted to competition between both transportation modes but in some cases HSR services may also have an intermodal complementary role with air transportation. By taking a supply oriented empirical analysis, we study the impact of HSR on air service frequencies and seats offered by airlines in large European countries. We emphasize the distinction between routes with and without a hub airport as an endpoint and we also examine the influence of the location of the HSR station. We generally find direct competition between HSR and airlines, but we also provide some evidence that HSR can provide feeding services to long haul air services in hub airports, particularly in hub airports with HRS stations.     

Connecting African urban areas: airline networks and intra-Sub-Saharan trade

Despite efforts to enhance the efficiency of the African air transportation sector through such actions the Yamoussoukro Decision, African represents less than 2% of the world’s air passenger kilometers. This is despite the fact that air transportation can act as a means of transporting traded goods directly (including the individuals that are the “product” of tourism) and provide complementary services of labor mobility for those engaged in the production of more bulky goods that are shipped by land and maritime modes. We examine the network of intra-Sub-Saharan African airline connections to highlight the differential access enjoyed by the region’s largest cities. Second, we develop a quantitative framework linking the availability of air connections to the main international trade flows in sub-Sahara Africa. Our findings suggest that, although there is a positive link between air transportation and economic development in Africa, the multilateral efforts at reducing institutional impediments to more open aviation markets have not produced significant results.     

Martin Kunz Memorial Lecture. Tourism benefits and aviation policy

Many tourists now travel by air, and aviation liberalisation has greatly contributed to the boom in international tourism. The relevance of tourism economic benefits in aviation policy decisions is becoming established, though there has been little by of analysis of these, of how they can be measured. Here, the nature of tourism's economic benefits is discussed, and ways of measuring them are suggested. These rely on the use of computable general equilibrium models of economies. The measures of tourism benefits obtained from these are positive, though they smaller than more ad-hoc measures which are sometimes used, such as total tourism expenditure. The role of tourism benefits in aviation policy making is considered in several case studies. These indicate that while the tourism benefits to a country from aviation liberalisation are not likely to be as large as benefits to home country travellers or the costs to home country airlines, they are sufficiently large to tilt the balance of benefits and costs of liberalisation in many cases.     

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.     

Effects of non-aeronautical activities at airports on the public transport access system: A case study of Zurich Airport

Many planning authorities and airports study measures to increase public transport use for airport ground access and egress. At the same time, an increase in real estate development at and around airports is occurring, both due to airports seeking new revenue possibilities and other developers attempting to profit from high value locations. This paper considers non-aeronautical activities at large airports, largely commercial centres and transit hubs, as land uses that have the potential to improve the situation for operating public transport services. In order to assess potential benefits and disadvantages, four research questions are considered: (1) Can the additional travel volume reach levels at which it has a significant impact? (2) To what extent do non-aeronautical activities influence the public transport access system? (3) Is the resulting demand distribution better or worse regarding peaking behaviour? (4) Is there a potential for the resulting overall demand to bring about capacity shortages?A case study is conducted at the airport of Zurich, Switzerland, which finds that non-aeronautical activities in the direct airport vicinity have led to a situation where the operation of public transport services is much more viable due to overall higher passenger numbers and a more even distribution throughout the day. It is concluded that locating non-aeronautical activities at airports can, in addition to providing commercial benefits to developers, lead to a situation where improved public transport services become feasible.     

Reforming air traffic control: an assessment from the American perspective

This paper examines institutional and economic reform of the ways in which air traffic control (ATC) services are provided in the US. It also contrasts the European and US ATC systems in terms of size, scope, cost and organizational form. The paper suggests that many of the congestion and delay problems experienced in the US result from the inefficient provision and use of air traffic capacity in the airport area, and these conditions are likely to continue or worsen if economic principles are not used to organize and provide ATC services. The paper notes that, while Europe has advanced more rapidly in the organizational and economic reform of providing ATC services, other problems remain. Because most large European airports have slot controls to limit demand in the airport area, its ATC congestion is more pronounced in the en route environment.