Optimising flight connection times in airline bank structure through Simulated Annealing and Tabu Search algorithms

In hub and spoke airline networks, flight arrivals and departures generally have a bank structure to increase connections among spoke cities through a hub airport in order to provide cheaper service for higher volumes of air traffic. In this study, we introduce the airline bank optimisation problem with a novel mathematical model for improving flight connection times. The mathematical model aims to minimise the total connection times for transfer passengers and generates flight schedules regarding slot capacities in the hub airports. Since the problem is a combinatorial optimisation problem NP-hard and computational complexity increases rapidly for real-world problems, we employ the simulated annealing and the tabu search algorithms to achieve better solutions in a reasonable time. We generate sub-problems using real-world data and investigate the effectiveness of the algorithms. Finally, we present the results of a real case study of a Turkish airline company which has a hub airport connecting the flights between Middle Eastern and European cities.     

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.     

The opening of direct flights across the Taiwan Strait: the impact on the global role of Taiwan’s international airport

Scheduled direct flights between Taiwan and Mainland China were halted for six decades and restarted in December 2008. The Taiwan’s government has a policy of developing Taoyuan International Airport (TPE), the major international airport in Taiwan, as one of main hubs in East Asia, based on the airport’s access to Mainland China. To assess whether the airport is progressing toward meeting the set expectation, this study evaluates the changes in airline networks of the TPE after the opening of direct flights across the Taiwan Strait. The time-dependent earliest arrival time algorithm is applied to global flights in 2004, 2008, and 2012. Empirical evidence demonstrates that providing direct flights across the Taiwan Strait has significantly increased accessibility from TPE to airports in China, but did not improve the centrality of TPE. Additionally, the transfer dependency of TPE on other airports is increasing significantly. This result was based on two major reasons: the first involves the Chinese government’s refusal to allow Chinese citizens to use airports in Taiwan as transfer points to and from other countries and the second reflects the competitiveness among airports and airlines in the region. The key finding is that political exclusion of airline use by external governments via travel regulations adversely influences the development of an airport as a global hub.     

Global air travel: toward concentration or dispersal?

The geography of airline passenger movement through the major cities of the world has changed between 1990 and 2000. The change has been at the expense of the very large global cities and major hubs in favour of a group of next largest cities. It has been detected by comparing the shares of total passenger movement through cities in two separate ways, and by exploring changes in the connectivity between cities over a similar time period. The new pattern reflects the use of new aircraft technology, changes in the location of demand for air travel associated with a broadening in the global linkages between cities, new regulatory arrangements and airline corporate strategies. The implications are that the pressures for airport planning will be felt in a new set of cities, although because the share of passenger traffic through the very large global cities is still high they will remain a major focus for airport planning and management action in the immediate future.     

High-technology employment and hub airports

Deregulation of the US domestic air transport market in 1978 brought significant benefits to air travelers. The scheduled airlines have been given the freedom to improve their efficiency through being able to adopt efficient network strategies and more effective operating practices. This study examines empirically the advantages enjoyed by those passengers having access to a major hub airport. These often include more direct services, more frequent services and a wider range of interconnecting destinations. We seek to examine the benefits that local urban areas enjoy as the result of a major airline selecting the region as the fulcrum point for its hub-and-spoke services.     

New potential hubs in the South-Atlantic market. A problem of location

Hub-and-spoke networks have become very popular in the airline industry. In this paper we study the potential hub candidates in the South-Atlantic market if a future process of liberalization creates a common air market area between South America and Europe. The analysis is based on the principal operating strategies that airlines consider when they choose their network configuration: central location in the market, local traffic at the hub cities and airport facilities. Traffic levels, great circle distances between the airports and other variables are used to analyze possible differences among airports. Other implications concerning the agents involved like gains in frequencies, time penalties and burden of capacity are also explored. Results of the analysis are used to extract some policy considerations and to stimulate discussion by government officials, air industry analysts and academics, about the necessity of the introduction of more liberalized measures in emergent markets.     

Airline network structure and the gravity model

In this paper, we determine characteristics of the cost-minimizing airline network under economies of density. Airline demand is asymmetric and governed by the gravity model. Airline networks are restricted to those where each spoke city is assigned to a single hub and where hub cities are fully interconnected. The cost-minimizing network is a mixture of a point-to-point and a single hub network. Multi-hub networks where passengers change planes at more than one airport are found to be suboptimal.     

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.     

Air deregulation in China and its impact on airline competition 1994–2012

China’s air transportation has experienced rapid growth and major reforms in the past three decades, some of which have been partially successful and are still ongoing today. The paper aims to analyze China’s air deregulation experience over the last two decades and its impact on airline competition from a geographical perspective. After the establishment of the “Big Three” in 2002, the paper reveals that there has been a trade-off between the extent of deregulation and airline competition in China because the central government has tended to strengthen the “Big Three” rather than totally open the market to private and locally owned airlines. The paper uses each airline group as the basic unit of analysis and reveals that (1) the air market has been more concentrated in the “Big Three” as a result of the process of air deregulation; (2) airline competition in over two thirds of the airports and one half of the routes has increased in the last 18 years, but the core airports and trunk routes are chiefly dominated by the “Big Three”. The peripheral airports and thin routes have been operated by private and locally owned airlines; and (3) regionally, airline competition has occurred in most airports of the eastern region, and it is more intense than in the central and western regions. But even here, competition in the eastern region has however decreased in 1994–2012. The three main contributions of the paper are: (1) the use of two measures of competition in the airline market; (2) the analysis of the historical evolution of competition; and (3) an understanding the role of the geography of competition in the Chinese airline market.     

Managing New Zealand's airports in the face of commercial challenges

This paper explores commercial issues surrounding managing airports in New Zealand. Airport managers face pressures from changing airport–airline relationships, low cost airlines, proposed new airports and the growing importance of non-aeronautical revenues in achieving commercial goals. New Zealand's airports have moved from an operating environment within which all the principal airports were owned and managed by central government to one where airports are run as commercial entities under a variety of ownership structures. New Zealand has a high dependence on air transport and for its size, a very developed regional airport network.     

Evaluation of level of service for transfer passengers at airports

Transfer passengers have quite different needs than those of originating and terminating passengers. For example, they do not make use of airport access roads. Other facilities may or may not be used depending on the type of transfers, the airport's operational configuration and the airline services. Despite the increasing importance of transfer passengers for airport operations, little research has been done to determine their needs. This study analyses transfer passengers’ views on the quality of services at the terminal building, using data collected at Bandaranaike International Airport in Sri Lanka, which aspires along with the airline ‘Sri Lankan’ to be a major hub for South Asia. Regression analysis was used to identify the transfer passenger facilities and services with the strongest effect on the overall perception of level of service. The application of regression analysis to the data collected at Bandaranaike International Airport shows that the courtesy of the security check staff and the quality of the Flight Information Display are among the most valued by transfer passengers at that airport.     

Estimating the costs of airport congestion due to fast connections

Short-term airport congestion due to service peaks causes transitory peaks in demand for customer services and ground-handling processes. Efforts to maximize flight-specific revenues have been mitigated by the recognition of the excessive burden to the service processes caused by these busy periods. The costs of peak periods for one mid-size European airline at its main airport are examined. The case company can cut the costs of ground-handling processes by 30% by applying slightly different timetabling principles. In fact, by adjusting only a few flights during the morning rush hour the company could save up to a million euros annually. These results show the importance of estimating the total economic effects of service peaks also to the authorities and the providers of airport services. In future research, the revenue impacts of despoking should be considered in addition to total process costs.     

Temporal configurations of European airline networks

The deregulation of the US domestic airline industry resulted in the reconfiguration of airline networks into hub-and-spoke systems. In contrast to the US airlines, airlines in Europe already operated spatially concentrated networks long before deregulation. This concentration at the national home-base was the outcome of bilateral traffic rights designated to the national carrier. With a few exemptions, however, most of these star-shaped networks were not coordinated in time. Transfer opportunities at most national airports only existed by accident. Only airports that were operated as gateways to Europe provided planned connectivity between intercontinental flights and European feeder services. The deregulation of the EU market stimulated a second phase of airline network restructuring. European airlines concentrated their networks by adopting or intensifying wave-system structures (‘banks’ to use the US term) in their flight schedules. This paper investigates these post-deregulation temporal concentrations in European aviation networks. The development and configuration of wave-system structures at European airline hubs is analyzed as well as the resulting transfer opportunities during the 1990s. It is found that a temporal concentration trend exists among European airlines with deregulation resulting in the adoption or intensification of wave-system structures by airlines. These wave-system structures, as well as overall traffic growth, have significantly stimulated the number of indirect hub connections. Airline hubs with wave-system structures generally perform better because of the increased indirect connectivity given the number of direct connections.     

The effect of de-hubbing on airfares

This paper studies the price effect of de-hubbing, which occurs when an airline ceases hub operations at an airport. We develop a simple theoretical model to study the impact of de-hubbing on prices and quantities of direct flights at the hub airport. Using an event study of seven cases of de-hubbing between 1993 and 2009, we analyze how average airfares change following de-hubbing. Consistent with the theoretical implications, the empirical results suggest that airfares decrease when there is a low-cost carrier presence at the de-hubbed airport, whereas airfares increase when the de-hubbed airport is not serviced by a low-cost carrier.     

Scheduling issues and network strategies for international airline alliances

An efficient network structure with co-ordinated schedules is necessary to realise the potential of an international airline alliance. This paper considers the scheduling issues that particularly affect alliances including multiple hub operations, other interfaces between routes, airport slot and terminal allocations and the through working of aircraft. Key principles are identified and illustrated with examples from current airline operations. Comparisons are made of the effectiveness of the major alliance groupings in the European arena and strategies to optimise the coverage and connectivity of the combined networks are advanced.     

The spatial distribution of employment around major Chinese airports

This paper examines the spatial distribution of employment around major Chinese airports. While the impacts of airports on employment have been debated within the European and North American contexts, airport-related urban development in China has been less well studied. Such an analysis is also timely given rapid urban and airport development in Chinese cities. Focusing on fifty-nine major airports in mainland China, employment centers are identified using gridded enterprise registration information. Our analysis suggests that there are few airports with nearby employment centers. However, planned airport economic zones (AEZs) with stronger policy support, longer periods of development, and located in major cities are more likely to have employment clusters. Furthermore, employment centers that do exist near airports are more likely specialize in manufacturing, transportation and logistics, and wholesale and retail trade rather than in financial and business services.     

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.     

A comparison of indirect connectivity in Chinese airport hubs: 2010 vs. 2015

Airport hubs’ indirect connectivity is important for any aviation network. Indirect connectivity describes the capacity of airport hubs to provide indirect connections over the airline network. As the Chinese aviation industry has experienced development, this paper offers a comparative analysis of indirect connectivity for Chinese airport hubs between 2010 and 2015. We investigate wave-system structures, weighted indirect connectivity (WIC) and indirect connections of the top ten airport hubs in China. In the spatial analysis, this paper surveys the spatial patterns of indirect connections at four important airport hubs. Beijing-Capital airport has strong indirect connectivity worldwide. Pudong and Hongqiao airports worked together to maximize the spatial coverage of Shanghai. Guangzhou-Baiyun airport has sufficient indirect connections across southern China, and it intends to expand its spatial influence into northern cities.     

What hurts the dominant airlines at hub airports?

This paper estimates a frequency equation to explain the determinants of network airline service levels at their hub airports. Drawing on European data for 2002–2013, we find that network airlines reduce frequencies when the share of low-cost airlines increases both on the route and at the hub airport. On the contrary, frequency choices of network airlines are not affected by competition from low-cost airlines operating in nearby secondary airports. We also find some evidence that mergers in Europe may result in a re-organization of the route structure in favor of the hubs of the larger airline.