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.     

The effect of LCC market entry on dominant FSC's price into long haul sector: A case of Norwegian competition on British Airways' prices on selected transatlantic routes

The concept of long-haul low-cost operations has become somewhat appealing in the airline industry in recent years. In Europe, the rapid expansion of low-cost carrier Norwegian that entered the long-haul markets from several large metropolises (London, Paris, Barcelona, etc.) imposed a burden of challenges to full-service carriers (FSCs). However, Norwegian operates a large portion of its long-haul service from London Gatwick by offering flights mainly on high-density routes. Although Norwegian's capacity and market shares on these routes are still at a low level mainly due to the carrier's “puppy-dog” strategy, it seems that its effect on British Airways, the dominant carrier on these markets, cannot be ignored. The purpose of the research is to examine the extent to which the presence of Norwegian affects the prices charged by British Airways on three selected high-density transatlantic routes performed from London area. The model applies simultaneous equation systems to determine how the emergence of Norwegian affects the price and the passenger volume of British Airways, as a traditionally dominant carrier, at the city-pair markets. The findings are consistent with the well-established view held in the literature, that a LCC's presence at a specific market would generally affect the incumbents to reduce their prices. Indeed, British Airways announced the capacity expansion as a counter-strategy to mitigate the competitive pressure induced by Norwegian and its affordable service.     

Economic influences on air transport in Vietnam 2006–2019

Vietnam has emerged from a long and complex post-colonial experience as a fast-growing economy now embedded in the complex network of economic linkages in the Asia-Pacific region. Those linkages involve trade, foreign direct investment, and tourism. Their underlying geography is reflected in the geography of Vietnam's air transport linkages. An early set of air connections with ASEAN neighbours, especially Singapore and Malaysia, are still significant, though routes to South Korea and China are now more important. Within the country, the colonial structure of Hanoi as a political capital, and Saigon (now Ho Chi Minh City) as a trading city, provided the framework for domestic air transport linkages. Here too the geography has shifted to include a set of smaller cities, especially those with tourism activities. The Hanoi-Ho Chi Minh City corridor is still dominant, and now ranks as one of the busiest domestic routes within the Asia-Pacific. These outcomes confirm the effect of economic development on air transport in Vietnam.     

Railway geography and the demarcation of Poland's borders 1918–1930

This paper examines the role of railway geography in the process of drawing the borders of the new Polish state after 1918 and discusses in particular the way in which the railway geography of the area was affected and also the influence existing railway routes had on the delimitation of those new borders. Each border area is discussed in turn and the status of resulting rail routes is examined. The border demarcation process was remote, resulted in the creation of a number of corridor and transit routes and gave rise to boundaries which lacked security for the new state.     

An analysis of European low-cost airlines and their networks

The growth of low-cost carriers (LCCs) is currently focused on the Western European market, where they represent the most determining factor in the evolution of airline networks. In this area, they stand for 18% of the total air transport supply according to seats. Limited to short and medium haul flights, networks are not too concentrated (no hubs). They are North–South, and compete with—when they have not replaced—some charter routes. The use of air freedoms beyond the fourth is still limited, but exclusive routes are a frequent phenomenon linked to the option for secondary (urban or regional) airports and/or niches.Finally, low-cost carriers give fresh impetus to point-to-point routes by drawing new networks complementing those of full service network carriers (FSNCs). If no hubs as such can be found in these new networks, significant concentrations characterize the major bases.The geography of low-cost networks is to a large extent the geography of EU air transport liberalization.     

Studying border crossing choice behavior of trucks moving between Ontario,Canada and the United States

The effectiveness of trade between Canada and US relies heavily on land borders. This study uses GPS data to explore the movement of trucks across four major border crossings in southwestern and southeastern parts of the Canadian province of Ontario. Multinomial logit models are estimated to examine the route choice decisions of trucks using the four crossings. While observed crossing time has a significant and negative influence on the observed choices, its impact is generally inelastic. More importantly, the geographic location of truck trip origins and destinations appear to play a more significant role in choosing the border crossing, suggesting that geography is at play when it comes to the choice of a land border. Finally, the results suggest that long-haul trips tend to favor the Ambassador Bridge crossing that connects Windsor, Ontario to Detroit, Michigan.     

The emission reduction potentials of First Generation Electric Aircraft (FGEA) in Finland

Under the looming climate crisis, aviation needs to find new solutions to cut its greenhouse gas emissions. One pathway towards zero emissions is the use of electric aircraft. While current battery technology will not allow for medium and long-haul flights at full capacity, on short-haul routes First Generation Electric Aircraft (FGEA) could play a significant role in the near future. Current FGEA under development could carry 9–19 passengers on distances of 400–1046 km by 2025. This study focuses on the emissions reduction potentials of FGEA in Finland. It compares the carbon dioxide equivalent (CO₂-eq) emissions and real travel times (RTT) from door-to-door of FGEA on 47 routes with existing aircraft, train and car transport modes, as well as with proposed high-speed rail (HSR) and electric vehicle implementation. The study found that replacing all existing aircraft with FGEA can clearly be recommended as it would result in a reduction of CO₂-eq emissions and RTT. Existing cars should only be replaced by FGEA on routes beyond 170 km. The replacement of existing trains by FGEA under the current energy mix is not recommended. However, once electricity could be provided from renewable energy sources exclusively, it would become feasible to replace existing trains on distances beyond 170 km and HSR beyond 400 km with FGEA.     

The fortunes of air transport gateways

The paper explores the idea that the fortunes of some gateway cities are changing as airlines use modern aircraft to respond to new market opportunities. It uses data on inter-city journeys between Australia and Asia to identify a hierarchy of gateway cities, and then shows how the connections between them has changed over the 2000–2013 period. Results show that secondary, and smaller, gateways in both Australia and Asia have played more important roles in passenger movements over this time. In Melbourne in particular, stronger growth in the demand for international travel in that city along with more use made of the smaller long-haul aircraft by airlines, has strengthened its role as a gateway city relative to Sydney. These results confirm that the geography of inter-continental air networks are changing which may have important implications for the air transport roles of some cities in the immediate future.     

Long-haul specialization patterns in European multihub airline networks – An exploratory analysis

Multihub airline networks are an important phenomenon in today's air transport market. An important question is to what extent different factors play a role in the specialization between hubs that are part of the same multihub network. This paper shows that total European market size to a certain long-haul destination and the ratio between the origin-destination market at the primary and the secondary hub are important variables for the role hubs play in the long-haul network of European multihub systems. Large long-haul markets are generally served from both the primary and secondary hub. Multihub carriers serve smaller long-haul markets uniquely from a single hub, depending on the relative advantage in the local origin-destination market. Looking at actual specialization patterns within European multihub networks, we distinguish between complementary multihub systems (such as Amsterdam–Paris CDG), overflow systems (such as Frankfurt–Munich) and regional systems (such as Paris CDG–Lyon).     

Fuel burn rates of commercial passenger aircraft: variations by seat configuration and stage distance

Aircraft fuel consumption is a very large component of airline costs. Fuel burn is also very important because it is highly correlated with emissions and contributes directly to transport externalities. This paper calibrates fuel burn in kilos per seat per nautical mile for aircraft using the EMEP/EEA aircraft inventory database. We then employ the model with OAG flight schedule data to evaluate fuel burn by flight routes and aircraft types at a global scale. The paper shows comparative fuel use among different distance based markets as well as among a variety of routes in the long-haul market. The results show geographical heterogeneity of fuel burn rates among a variety of routes, while controlling for seat configuration and stage distance. The paper finds that stage lengths centered on 1500–2000 NM have the lowest fuel burn rates under current technology, fleet composition, and seat configuration. These findings, together with comments on the viability of long range flights provide better understandings not only for the carbon taxation debates but also for operational efficiency of current aviation markets. The lower rates for moderate distance flights seems to favor networks without extreme links, and supports the use of a hub connection scheme.     

Service quality of low-cost long-haul airlines – The case of Jetstar Airways and AirAsia X

The study investigates why passengers choose a particular airline when travelling on a long-haul low cost carriers focusing on Asia and Oceania. A survey of Jetstar and AirAsia X passengers finds that assurance is the most important factor when choosing long-haul low cost carriers, followed by two other important factors-airfare and reliability. These results suggest that there are no significant differences regarding service quality between Jetstar Airways and AirAsia X.     

The long-haul low-cost airline business model: A disruptive innovation perspective

This paper analyzes the impact of the long-haul low-cost (LHLC) airline business model on the air transport industry from a disruptive innovation perspective. We argue that the LHLC business model is set to stay; it is bound to penetrate the mass market that has, to date, been occupied by incumbent network carriers. It will thus lead to significant strategic adaptations in the long-haul air travel market where incumbents are well advised to prepare their responses. We provide a set of strategic response options along the categories of avoiding, accepting and embracing the LHLC business model that can be used by incumbents to defend their competitive positioning in the long-haul air travel market. This paper provides guidelines for airline managers to (re)evaluate the strategies of their own organizations facing the emergence of a potentially disruptive innovation in their industry.     

The geography of freighter aircraft operations in the Pacific Basin

The expansion of scheduled freighter aircraft operations is a prominent feature of the contemporary international airline industry. By 2000, more than 1600 freighter aircraft were in use worldwide, with much of that capacity deployed on routes in the Pacific Basin. This paper evaluates the factors that shape the geography of scheduled freighter aircraft operations with particular attention given to the place of individual Asian cities within that geography. The paper also examines the separate spatial strategies exhibited by the scheduled freighter operations of two important categories of cargo airlines: the express carriers like FedEx and the combination carriers like Lufthansa.     

A mobilities approach to tourism from emerging world regions

Increasing numbers of people from the emerging world regions, Asia, Latin America, Africa and the Middle East engage in tourism practices at domestic, intra-regional and long-haul international scales. In this article, we deploy an innovative application of the mobilities approach, which we argue moves beyond the Eurocentrism implicit in modernist tourism studies, in a comparative analysis of tourism in and from these regions and those in the ‘West’. Our analysis opens up the systematic study of tourism in emerging world regions in terms of the mobilities paradigm, and concludes: one, travel had a multiplicity of origins in societies in the emerging regions, but most did not possess an equivalent emic term to ‘tourism'. Two, tourism at domestic and intra-regional levels tends to be entangled with other discretionary mobilities, whereas the long-haul level is more differentiated. Three, the development of domestic discretionary travel in emerging regions can be represented by four overlapping ‘mobility constellations’. Four, there are significant historical differences between the regions in their long-haul mobility constellations, although their kinetic hierarchies are all still steep. Five, forms of movement and associated practices of discretionary travellers from the emerging regions and Western countries became increasingly similar under the impact of socio-technological, economic and cultural globalisation. Six, differences between the emerging regions, particularly Asia, and the West are most salient on the emic level of representations of international travel: the specific cultural motive forces for tourism do not centre on authenticity-seeking, but are instead bound up with prestige and markers of modernity.     

The economic viability of long-haul low cost operations: Evidence from the transatlantic market

The recent strong performance of long-haul low-cost carriers AirAsia X and JetStar have re-raised the question of the long-term feasibility of long-haul low-cost operations. For the first time, this study contains a detailed financial assessment of low-cost operations on the transatlantic market using best-in class aircraft technology, the Boeing 787. The study's main findings demonstrate how challenging the successful running of a European long-haul low-cost carrier can be. In particular, on-going operating profit appears to be very sensitive to variations in demand and fuel prices, despite the use of new, highly efficient B787s. The findings show any prospective long-haul low-cost carrier that pursuing a demand focussed network strategy can ensure financial viability. This involves the creation of higher seating densities, higher cargo revenues and additional ancillary revenues.     

Air transport and tourism—Perspectives and challenges for destinations,airlines and governments

Air transport and tourism are interlinked. Tourism is a driving factor for and, in some cases, a stimulator of change in air transport; most notably the development of new business models such as charter airlines. On the other hand, air transport opened new destinations and tourism forms such as long-haul excursions. Here these interlinks are analyzed in a system model. For the strategic development of destinations, a clear airline policy and air access strategy seems to be necessary. For airlines an assessment and understanding of the business models of destinations is essential. By shaping the external regulative environment of air traffic, government may influence air traffic as well as tourism.     

Travelling ‘green’: is tourists' happiness at stake?

Several western governments have implemented environmental policies which increase the cost of air travel. Such policies aim to reduce the impact of air travel on climate change, but at the same time they restrict tourists in their travels. This study examines the extent to which the average tourist's happiness is affected by ‘involuntary green travel’, defined as reduced CO₂ emission travel imposed by government regulations. This issue was addressed in a study among 588 Dutch citizens who completed a self-report questionnaire containing questions about their happiness. The strongest determinant of tourists' happiness is freedom in choosing a destination. Any policy measure that interferes with tourists' freedom in destination choice will negatively affect tourists' happiness. Six percent of their happiness is at stake and potentially 17% of all holiday trips are affected. The number of tourists involved is possibly much smaller. The best options for governments are to impose taxes on long-haul destinations, which affect only a small share of all tourists, and air routes which can also be travelled by a variety of alternative modes of transport and thus less limiting to destination choice within this market segment.     

Port geography at the crossroads with human geography: between flows and spaces

Port research is not a new field of interest for human geographers, evidenced by numerous conceptual models and empirical cases of port evolution and development in the literature. However, several critical questions remain unanswered, notably the exact position of port geography as a subdiscipline within human geography in the past, present and future. Based on a pluralistic approach, the paper analyzes the changing waves and development of port geography as a sub-discipline of human geography, with a special focus on whether port geography has experienced a paradigm shift and, if so, when, why, and how. Also, through analyzing the major terrains of port geography research from the macro perspective, it brings a new lease of life to port geography in this rapidly changing world.     

The geography of the Spanish airport system: spatial concentration and deconcentration patterns in seat capacity distribution, 2001-2008

This paper analyzes the geography of seat capacity at Spanish airports between 2001 and 2008. Concentration and deconcentration patterns for different markets have been identified. For this purpose, we use the Herfindahl-Hirschman Index (HHI), the Concentration Ratio (CR) and the Lorenz curve. From our analysis, we conclude that seat capacity follows a deconcentration pattern due to the growth of low-cost carriers at small- and medium-sized Spanish airports. This is in line with earlier studies for Europe as a whole. Intercontinental seat capacity still remains very much concentrated in Madrid and, to a lesser extent, in Barcelona. However, new strategies by long-haul airlines bypassing the primary European hubs foster the deconcentration of seat capacity in the Asian and North American markets. In the case of Spain, the recent liberalization of the EU-US market may become an important enabler of such network strategies, e.g., Delta has operated a route from Valencia to New York-JFK since 2009. In other intercontinental markets, capacity is more and more concentrated in Madrid. We highlight the restructuring of Iberia’s network as an important factor behind the increasing dominance of Madrid in intercontinental markets.     

Paying the pilot? The economics of subsidising international air travel to small remote island nations with large diaspora

The tourism-air transport linkage may be complicated by the presence of substantial non-tourist leisure travel flows. This paper analyses the value of direct long-haul air service to Los Angeles for two small South Pacific nations, Tonga and the Cook Islands, which were faced with demands that they subsidise the current service to ensure its continuation. Both countries are tourist destinations, but both also have sizeable diaspora of economic emigrants living abroad, which generate considerable visiting friends and relatives traffic. It turns out that the economics of this travel are quite different from those relating to foreign tourism, such that it is possible that Tonga could actually lose by having the long-haul service. The bottom line is that the Cook Islands do gain, and that Tonga probably does, though in both cases by less than the amount of subsidies that they agreed to pay the airline.