Hub-and-Spoke Operations

The Hub-and-spokes system was developed as one of the results from the US airline deregulation. Prior to establishing this system, airlines operated point-to-point routing which was often not cost efficient. The concept of the Hub-and-spokes system was to concentrate traffic to one airport- the major hub from smaller national airports (known as the spokes) or other means of transport, and then the gathered group of passengers would be transported from the major hub to another major hub (Bontekoning, 2006 1).

The following diagram compares how the hub-and-spokes system works in comparison to the point-to-point system:

(image embedded from The Geography of Transportation Systems on 2 May)

The development of this system had enabled travellers a more integrated travelling system and experience, where passengers originating from smaller regions had the ability to make transits at a major hub where connecting flights to many other destinations are possible. At the era of point-to-point travelling passengers may have to make land transport to smaller towns, whereas the hub-and-spoke systems increases possible city pairs they can enter into. However at the same time the frequency of flights in and out of many smaller airports had decreased as a result of major airlines exiting the market of these smaller airports and concentrate on more profitable connection routes.

Implications to airports

1. Distinctive role between large and small airports

Larger airports take up the role of being the major hub, where airlines gather their traffic brought in by smaller secondary airports. Smaller airports only served a small amount of large hubs where travellers are then transferred to other routes. This system tidies up the routing system as airlines were no longer forced to operate less popular routes by government restrictions in condition to their more profitable operations, only essential air services were maintained (Wells & Young, 2004 5).

2. Risen importance of large city hubs

Airports that were chosen by airlines to act as their large hub are normally those that serve larger cities or have easy access to the central business districts of a main city in that country. Due to the larger travelling demand the size of these airports are usually larger and can handle more capacity at once. This had favoured airlines to use the hub facilities as their major transiting point. As a result of this system, many airports in major cities had expanded their airport to attract airlines to use their facilities and bring more traffic. Gradually as traffic increases rapidly into these larger hubs the need of an efficient and effective airport management scheme was necessary.

Airports such as LAX in Los Angeles, USA and LHR in London, UK are often packed with transiting passengers as they are the major international and national gateways, waiting times and delays at these airports can often cause problems. Many years after deregulation, most of these larger hubs are now at or reaching their maximum capacity and need to either further expand of have a second airport to shed off congestion.

3. Decreased services at smaller airports

The decrease in service of smaller airports by full service airlines were one of the major disadvantages as a result of the deregulation, as airlines no longer needed to serve these routes if they appeared non-profitable to their yield factor. Smaller airports were potentially left idle and had only essential services running by.

As a result of that, this encouraged the entrance of low cost carriers- LCC (refer to Low-cost Carriers for more details) as they were favoured by low airport fees, discounted accommodation and car rental package offers and even commission from the local tourism board to operate at their airport. The airports in return need not to invest largely in improving their facilities to gain passenger flow, as they would not have had enough capital to support such large expansion.

4. Domino effects in delays

As the result of large capacity at large hubs in the hub-and-spoke system, the oncarriage of passengers are easily affected by a small delay on any one end. For example a small delay from spoke A airport has caused a delay into the major hub; as a result, the connecting flight at the major hub, with passengers gathered from other flights (from spokes B and C) may be delayed by waiting for the passengers to arrive from spokes A; ultimately the domino effect is that the larger group of passengers are delayed to their next hub destination. Had the hub been one of the many transiting points for a passenger from spoke B, then further flights would have been affected and so forth (Graham et al, 2008 2).

Implications on airport systems and architecture

According to Janic (2008 3) and Laborie (2004 4) hub-and-spoke operations have had and will in the future still have the following implications on the system and the architecture of hub airports:

1. Landside areas

The landside area generally needs to be flexible for changing traffic structures and increasing demand. This implies, that terminals will be expanded or if possible newly build. Airport planners are forced to ensure short distances between gates for transfer passengers. Since satellite concepts can cater for these needs, new terminals will most certainly be planned in such a scheme. If this is not feasible, fast connecting times can be ensured by the installation of people mover systems within the terminal or outside train systems can be put in place to connect different terminal buildings.

2. Airside areas

Apron size will be extended for a flexible use of gates to guarantee smooth operations and fast handling of different aircraft types - especially regarding aircraft size and capacity. Runway and taxiway systems need to adapt to future traffic volume. Existing airports however will most probably have problems to expand the airside areas due to scarce land resources and possibly environmental concerns resulting from negative externalities such as noise and pollution. These problems are the reason for public inquiry and therefore long planning and expansion processes in many countries. Prominent recent examples being Munich or London Heathrow.

3. Ground access systems

Since hub airports not only need a great portion of transfer passengers to make use of the benefits of the hub-and-spokes system but are also dependent on the passengers in the airport catchment area, ground access systems will be of high importance. If the airport is aligned to a High Speed Train Network, the catchment area can be extended and the number of travelers will most likely increase. This can even have the effect that short haul flight connections to the hub might be replaced by train services.

Implications to airlines

1. Freedom in routings for profit

The routing strategy of being able to gather passengers in a hub facility from outlying spokes, allowed airlines to serve more markets with their existing resources- i.e. crew and fleet. Airlines were no longer obliged to take up non-profitable routes in order to run other profitable routes assigned by the government that controlled the air space. Airlines could exit out of routes that did not bring in profit, concentrate on routes to major hubs that were more profitable and make strategic connections at the hub, so there were increased possible route combinations with the same amount of resources (Wells & Youngs, 2004 5).

As a result of increased combinations of routing, there had been an increase in passengers as airlines could afford to use limited services to transfer passengers from all spoke locations into one major hub and then deliver these passengers to another large hub in one larger aircraft.

2. The formation of airline alliances

The hub-and-spokes system has encouraged the development of many airline strategies such as the flexibility in rearranging airline routings and schedules where an airline’s network in comprehensive enough in their dominating area. Where this is often financially impossible for many airlines, the next best option is to form airline alliances.

Airline alliances allow airlines to expand their network by code-sharing flights with airlines in the same alliance. Most alliances share the same terminal in the hub and have ticket and baggage interlining facilities to provide a one-stop experience to their passengers and shorten connecting times. (Refer to Airline Alliance for more benefits on alliances)

1. BONTEKONING Y (2006). Hub exchange operations in intermodal hub-and-spoke networks. Delft University Press (Amsterdam, The Netherlands), 2006.
2. GRAHAM A, PAPATHEODOROU A & FORSYTH P (2008).Aviation and tourism- Implications for leisure travel. Ashgate (Hampshire, UK), 2008.
3. JANIC M (2008). The Future Development of Airports: A Multidimensional Examination. Transportation Planning and Technology. Vol. 31, No. 1, February 2008.
4. LABORIE P (2003). A 380 accommodation at Paris Charles de Gaulle Airport. Airports de Paris,
Passenger Terminal Expo 2003, 28th February, Hamburg.
5. WELLS A T & YOUNGS S B (2004). Airport planning and management (5th Edition) McGraw-Hill (New York, USA), 2004.

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Advantages and Disadvantages of Hub-and-Spoke Operations
This AviationKnowledge page explains the advantages and disadvantages of hub-and-spoke operations for airlines and airports.

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