An application of the airport service quality model in South Africa

Passengers’ expectations of service quality at airports are becoming increasingly important as air traffic grows. This research investigated passengers’ perceptions of airport service quality at O.R. Tambo International Airport, South Africa. An existing model placing the concept of passenger expectations central to measuring an airport’s specific level of performance was applied. The results proved significant in terms of the investment made by the airport in staff training and highlighted areas for improvement. The results show that business travellers and leisure travellers have different opinions regarding the importance of services offered by airports and of the level of performance at ORTIA in particular. Significant differences also occur in the perceptions of frequent travellers and infrequent travellers.     

Modelling the effects of capacity constraints on air travellers’ airport choice

This paper analyses the effects of limited capacity on air travellers’ airport choice. The analysis is based on a market-segment specific airport choice model that accounts for limited capacities. The region of Stuttgart in Germany serves as a case study to examine the impact of limited airport capacity on air travellers’ airport choice. Air travellers’ choice depends on the supply of flights and accessibility of the airports in their choice set as well as on their preferences and willingness-to-pay. To elaborate the effects of limited airport capacity, scenarios relating to the capacity situation at airports serving the air travel demand of the Stuttgart region are analysed. This paper reveals the mutual dependence among airports. Capacity constraints at one airport cause spill-over effects and thus influence air travel demand served at other airports. In some cases this may even lead to new capacity constraints elsewhere.     

Airport slot allocation: a time for change?

The increasing imbalance between airport capacity and traffic resulted in exceptional congestion and delays drawing the attention of aviation policy makers towards airport demand management for the allocation of scarce airport slots. Attempts to bring forward airport demand management measures in the form of airport slot allocation were not widely adopted and have not flourished in practice. This paper aims: (i) to apply a methodological framework for the selection of the most suitable slot allocation strategy for various types of airports, (ii) to explore potential impacts such that measures or strategies can bring about, and (iii) to assess the suitability of the existing airport pricing scheme and the potential implementation of a new policy regime aiming to bridge the gap between growing traffic and scarce airport capacity.     

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.     

Supply-and-demand models for exploring relationships between smaller airports and neighboring hub airports in the U.S.

Airport passenger leakage is the phenomenon of air passengers choosing to travel longer distances to access more extensive air services offered by airlines at an out-of-region hub (or, substitute) airport, instead of using their local airports. Airport leakage can cause further reduction in services offered by airlines at a local airport, thereby causing even further leakage, and so on, which can significantly impact an airport's role in the growth of the local economy. This paper explores the geographic and operational attributes of local-and-substitute airport pairs in the United States, explicitly accounting for the interactive feedback relationship between passenger volumes and air service characteristics that contribute to the onset, persistence, and exacerbation of airport passenger leakage. A two-stage least squares regression model of air passenger demand at small- and medium-sized airports is first presented, where local passengers may travel by vehicle to larger, out-of-region hub airports. The results confirm that airfare and passenger volume relationships exist between the local and substitute airport pairs included in the dataset, and that lower airfares at the substitute airport have a greater impact on airport choices made by larger travel groups. They also suggest the existence of positive feedback in that if an airport attracts increasingly smaller passenger numbers with fewer air services and fewer air services with fewer passengers, without external intervention airport leakage impacts may be irreversible and exacerbate over time. A conceptual market share equilibrium analysis is used to illustrate the mechanisms of a direct two-way feedback relationship between passenger volumes at a local airport and air service characteristics at both the local and substitute airports. With data, this quantitative framework can help guide airport planners in further assessing and verifying suspected passenger leakage issues at their airport. The results suggest that without intervention, airport leakage impacts may be difficult to reverse; further exacerbating the trend are technological advancements that make driving cheaper and easier (connected and autonomous vehicles). However, the results can also guide planners in choosing the types and degrees of infrastructure investments and airline incentives that may be used to expand or retain air services to attract passengers.     

The cost allocation approach of airport service activities

This study suggests a new allocation approach to the joint costs between airports and airlines and proposes estimates for airport service costs. Using correlation coefficients, data envelopment analysis and regression models, the research measures the relation and efficiency between service activity and airport operation costs. The regression outcomes not only reveal a significant management issue concerning the apron fee measurement, but also show that the airport physical activity cost drivers need to be considered with cost and revenue management. The DEA outcomes reflect the expansion of the terminal areas.     

Whether low-cost-carrier passengers spend more on duty-free goods at the airport? Evidence from Incheon International Airport

With a dramatic growth in the low-cost carrier (LCC) traffic around the world, many airports have built budget terminals to accommodate the LCC flights with cheaper airport charge to the airlines but inferior shopping environment and service quality to the passengers. This study aims to answer the following research questions: i). Whether the LCC passengers have higher purchasing power than FSC (full-service carrier) passengers for the airport concessions, particularly the duty-free goods? ii). Would the budget terminal design contribute to or jeopardize the LCC passengers' airport concession expenditure? iii). How could the airport operator maximize its concession revenue by re-designing terminal or re-allocating flight slots? We collect the actual airport duty-free transaction data from Incheon International Airport (ICN) for an empirical investigation. Our empirical evidence first suggests that LCC passengers could have comparable or even higher purchasing power than FSC passengers in consuming duty-free goods at the airport. Among all the LCC passengers, Chinese have the highest purchasing power. Second, the inferior shopping environment and service quality of budget terminal seriously jeopardize the duty-free sales from the LCC passengers. Third, counterfactual analyses show that, if ICN could convert its budget terminal into a conventional terminal, 44 million USD more duty-free sales can be generated per year. Even keeping the current terminal design, re-allocating the LCC flights between the budget terminal and conventional terminal could bring approximately 4.9 million USD more duty-free sales per year. The findings provide managerial implications to ICN and other airports for effective airport revenue management. First, the budget terminal design may not be ideal to accommodate LCC traffic as it damages the concession revenue from particular LCC passengers with high purchasing power. Second, exploring the concession revenue from the growing LCC traffic could help maintain an airport's advantage in aeronautical charge under single-till regulation.     

Airport traffic complexity and environment efficiency metrics for evaluation of ATM measures

For a given (current or planned) traffic demand, different air traffic management measures could result in different airport traffic complexity and efficiency. This paper presents the research on the relationship between airport traffic complexity and time and environmental efficiency for different air traffic control (ATC) tactics applied to the given or planned airport layout. Emphasis is placed on the evaluation of airport traffic complexity, aircraft fuel consumption, gas emissions and time efficiency for different ATC tactics and/or airport airfield layouts. For busy airports during peak hours, arrival queuing delays, taxi-in, taxi-out times and departure queuing delays increase, which induces additional unnecessary fuel consumption, gas emission and time inefficiency. In order to find a tool which could indicate potential delay generators, a measure of airport traffic complexity – called Dynamic Complexity is proposed. Experiments were performed for airports with different airfield layouts, for different traffic demands and ATC applied tactics using SIMMOD simulation model. Traffic situations were analyzed and delays were measured. The values of airport traffic complexity, fuel consumption and gas emissions were also determined. A comparative analysis of the results show: first, the proposed airport traffic complexity metric quite satisfactorily reflects the influence of traffic characteristics upon the environmental state of the system, and second, different ATM strategic and tactical measures (airport airfield infrastructure development and applied ATC tactics) could significantly reduce traffic complexity and increase time and environmental efficiency at the airport.     

Airport–airline vertical relationships,their effects and regulatory policy implications

This paper examines the forms and effects of vertical relationships between airports and airlines with a focus on the North American and European aviation markets. We find that such vertical relationships enables those participating to achieve various benefits and may be formed as a competitive response to other competing airport–airline alliances. In some cases, vertical airport–airline relationships strengthen the hub status of major airports, leading to increased employment and service quality in local markets. On the other hand, preferential treatment of a particular airline by an airport may enhance that airline’s market power, allowing it to dominate the airport and charge hub premiums. The competition and welfare implications of airport–airline vertical alliances can be complicated and two-sided, subject to the influences of other factors such as the market structures of the airline and airport markets.     

Hub airport slot Re-allocation and subsidy policy to speed up air traffic recovery amid COVID-19 pandemic --- case on the Chinese airline market

With international air travels largely banned around the world amid the global COVID-19 pandemic, many gateway and hub airports have more ideal slots available for reallocation. Airport traffic recovery replaces airport congestion to become the primary challenge of major airports around the world. With the pandemic well controlled domestically in China, the government liberalizes the hub airport slots for those previously forbidden services to the small/regional airports. This paper thus analytically examines the effect of this slot liberalization. The government subsidy to the small airports has also been considered. It is found that the slot liberalization can speed up airport traffic recovery for both hub and small airports. The hub airport slot liberalization leads to a lower level of minimum subsidy to sustain the survival of the small airports. Given any fixed level of subsidy to the small airport, both the total airport traffic and social welfare would improve with the slot liberalization at the hub airport. When the government can adjust the level of subsidy after liberalizing the hub airport slots, the subsidy could be excessive, if the government emphasizes too much on airport traffic recovery. This would, however, harm the overall social welfare.     

Estimating the sensitivity of small airport catchments to competition from larger airports: A case study in Indiana

An accurate estimation of airport catchment area enables airlines and airport operators to make informed decisions and to target potential markets precisely. This study uses the state of Indiana as a case study to estimate traffic leakage from the local airport, Indianapolis International Airport (IND), to two large hub airports in Illinois, the neighboring state of Indiana, namely Chicago O'Hare International Airport (ORD) and Chicago Midway International Airport (MDW). By using a decision making model that considers flying cost and access cost, this study simulates from local passengers' perspective which origin airport delivers the most cost effective flight itinerary. Using the top 20 routes of IND in 2018 as model inputs, the catchment area of two Chicago based airports in Indiana with variable coverage is plotted for different traveling scenarios. The analysis shows that an airport catchment area is sensitive to location, service level and traffic volume of competing airports nearby, as well as purpose of travel (business or leisure), number of travelers in a group (single, couple, family or multiple), length of trip, destination (domestic or international), preference of airlines (network carrier or budget carrier), and frequent flyer program status (premier member or general member). These findings could be valuable to all three aforementioned airports as well as airlines serving these airports when allocating operational and marketing resources. More importantly, this study creates a generic model that could be used by virtually any airport to estimate scenario-based catchment area using readily available itinerary and spatial data without resorting to expensive passenger surveys.     

Airport traffic and financial performance: a UK and Ireland case study

The aim of this paper is to examine the development of air services at UK and Irish airports since 1998 and to assess the impact on airport financial performance. A sample of 14 medium/small sized UK airports and three Irish airports is used. The traffic analysis shows that low cost carriers have been largely responsible for strong passenger growth and increased passenger load at a number of regional airports. Some of these carriers use established primary and regional airports whilst others seek out small secondary airports. The airports with a high proportion of low cost traffic tend to have lower unit revenues, particularly as regards airport charges, demonstrating their desire to remain price competitive to capture this type of traffic.     

Airport slot allocation: From instruments to strategies

Slot allocation is widely used to tackle capacity shortfalls and manage delays in air traffic and airports. A variety of instruments are used, but little analysis has been conducted looking at the synergies that exist when these tools are integrated to form an overall slot allocation strategy. This paper aims to capitalise on existing research work in the field of airport slot allocation instruments to define a series of distinct and integrated strategies as the candidate strategic options for practical implementation.     

Relevance of airport accessibility and airport competition

Airport accessibility is an important criterion for airport competition. The relevance of airport accessibility and airport competition was studied in this paper based on the panel data collected from nine large airports in Jiangsu province, China from 2005 to 2014. The results showed that the cost of expense, time and fatigue for the arrival at the airport are proposed to quantify levels of fastness, economy and amenity for the passengers to arrive at airport. The airport accessibility is significantly affected by airport passenger traffic and airline frequency. The passenger traffic can be increased by 2% with 1% increase of airport accessibility based on the analysis results of the nine large airports in Jiangsu province.     

Airline strategies for aircraft size and airline frequency with changing demand and competition: A simultaneous-equations approach for traffic on the north Atlantic

Airport planners need to know the forecast demand on the facilities provided airside at airports. For this they need to know how airlines will deal with traffic in terms of the size of aircraft and frequency of service. In response to increasing demand, airlines may increase capacity by increasing the frequency of flights or they may choose to increase aircraft size. This may yield operating cost economies. If the airports they operate from are capacity constrained they will be limited in the extent that they can change frequency that will limit their ability to compete with the number of frequencies offered. Consequently, these airports are excluded as are major hubs as frequencies will be influenced by connecting passengers. Routes are identified on the north Atlantic that can be analysed and conclusions are suggested on the basis of three stage least-squares estimates for pooled time series-cross section data. An increase in passengers on the whole will result in a larger increase in frequency than in aircraft size but the impact of competition does not yield significant results due to the strategy of excluding certain categories of airport.     

Intermodal integration in air transportation: status quo, motives and future developments

Soaring air traffic, increasing urban expansion and airports operating at full capacity are reasons that have caused a discussion about improvements in airport landside access systems. One approach to better match customer demands and address airport congestion is to facilitate the intermodal integration of airports. Building on a survey on intermodal passenger air transportation, we elaborate on the current and future situation at major airports. Our findings indicate a high modal concentration and dependence on individual access modes. However, while airport managers intend to reduce the share of these modes, they plan to increase that of high-occupancy airport access modes. We analyze the underlying motives that cause airports to extend their connections to surface infrastructure. In a case study, we assess an intermodal best practice solution for the integration of air and rail.     

Policy issues and planning of UK regional airports

The principal motivation for this paper is to examine the policy issues for UK regional airports within the air transport system with particular reference to airport airline relationships. The geography of airline route networks is considered a key factor that determines location of the pressure for infrastructure development. Regional airports policy is considered in this context. The problems of the resultant concentration of air traffic has largely been ignored up until now and so this paper seeks highlight the issues this presents to policy makers. The paper reviews the changing regional airport ownership patterns and examines a range of implications. It then explores the policy implications for the future regulation and development of the air transport system. The authors contend that regulation and the planning system are the only two remaining policy levers for government to guide privately owned airlines, privately owned airports and commercialised airports towards national policy goals.     

Competitive drivers towards improved airport/airline relationships

This paper draws on a recent report from Copenhagen Economics, with which both authors were involved, to argue that the European airport market has changed such that airports are now subject to competitive constraints from a number of sources. While these will bite differentially according to the circumstances of individual airports, airport possession of significant market power can no longer be casually assumed; nor, therefore, can the need for economic regulation. Indeed, the costs and benefits of economic regulation need to be carefully assessed against the extent and nature of the market power it is intended to countervail. In particular, increasing attention needs to be paid to the risks of economic regulation hampering both the further growth of airport competition and the development of more productive commercial relationships between airports and their airline customers which have the potential to create added value for both parties.     

Is economics good for aviation policy? Some problems in bridging the gap between theory and policy

This paper argues that airport economics is based on the concept of economics as the positive value free science of efficient allocation of scarce resources with given wants, ignoring the approach of economics as a moral science. It assesses critically the results on major policy issues. Although there is strong empirical evidence of natural monopoly of airports, no consensus has emerged. The effects of privatisation have been assessed in terms of cost efficiency, but not in terms of economic welfare and distribution. While airport economics has made theoretical progress, the policy recommendations on single versus dual till are less relevant than those from the older models. Airport expansion is assessed in many cases by economic impact studies instead of cost benefit analysis. Economists applying impact analysis, have contributed to an irrational policy discussion. The role for morals in the management of airports has been neglected, although there is evidence that incentives might backfire. The paper argues that airport economics based on economics as a moral science could improve airport economics, and make its policy recommendations more relevant.     

An econometric analysis of domestic air traffic demand in regional airports: Evidence from India

The Indian aviation industry has a vast potential to grow to cater to its population and commerce through developing air transport services to the regional airports. This paper examines the possible determinants of domestic air traffic demand in Indian regional airports serving below three million passengers per annum. Using multiple regression analysis, we find that distance to the nearest airport and accessibility of the airport significantly affect traffic volumes in regional airports. This study also highlights the specificities of Indian regional airports.