One reason for Hub airlines to start operating a hub and spoke system can be seen in an insufficient demand for point-to-point services between destinations (British Chambers of Commerce, 2009 2).
Resulting from the hub and spoke operations (refer to Hub-and-Spoke Operations for more details), at the hub airport, passengers originating from a spoke airport transfer to their connecting flight. To offer a high number of possible connections, the flight schedule at the hub is organized in daily waves of incoming and outgoing flights, in which ideally all incoming flights connect to all outgoing flights (Bootsma, 1997 1).
Hub Airport Types
Kraus and Koch (2006 3) identified three different hub types in their research:
1. Long-haul transfer hub airports:
As the name indicates, these airports mostly serve long haul destinations and only a limited number of short or medium haul flights. Since long haul flights need a more intensive handling at the airport (more catering, baggage handling, fueling etc.), transfer times are longer and therefore the waves show a different pattern compared to other hub types. At these airports the home carrier comprises a large share of the traffic which makes the airport rather dependent on that carrier. Traffic is concentrated around a few peaks, leading to underutilized infrastructure during off-peak-times. Example airports are newly emerging hubs in the Middle East with limited destinations in the close proximity as e.g. Dubai Airport (DXB).
2. Mature hub airports:
These are well established hub airports with up to six waves per day every 1.5 to 2 hours resulting in a relatively stable use of infrastructure and only some periods with lower traffic loads. Long and short-haul destinations are equally served. The main carrier dominates the operations at the airport and shapes the hub pattern. (e.g. Air France at Paris-Charles de Gaulle – CDG)
3. Hub airports with de-peaking strategy:
Here, one airline dominates the airport traffic while operating in the hub-and-spoke system. It implies a larger number of waves throughout the day (up to 8 waves) which lead to a steady traffic load with only little time periods of smaller volume. In the example of Dallas/Fort Worth, the steady traffic flow is the result of a de-peaking strategy to reduce major peaks and increase the facility utilization. The strategy builds on shifting flights to less congested times. This is however only possible if traffic volume is very high and the waves are close enough that the airport even offers many transfer possibilities outside the real hub waves. Thus the transfer times can still be kept on a low level. Hubs like DFW usually offer short and long-haul flights as well as continental and intercontinental destinations. Since traffic peaks also increase the delays the de-peaking can be seen as strategy to decrease the risk of passengers missing their immediate connection and therewith causing inconvenience.
Incentives for airlines and airports to operate hubs
The following points describe the prerequisites airlines usually require for an efficient and profitable operation of a hub-and-spoke network. Since airports sometimes have conflicting interests to achieve their aims, these are highlighted as well.
1. Prerequisites for an airline (Kraus and Koch, 2006 3):
- Network attractiveness with as many connections as possible
- Hub as location to offer dedicated services for frequent travelers such as lounges > Increasing customer loyalty
- Short Minimum Connecting Time (MCT) to keep travel time limited
- High market share that results in a strong customer position towards the hub airport to enable positive price negotiations
2. Interests of an airport (Kraus and Koch, 2006 3):
- Long dwell time of passengers in the airport for a maximization of retail revenues
- Reach a high infrastructure utilization to increase revenues > Try to attract other airlines on top of the hub airline to fill the gaps between the waves