European Hubs Research Articles

New Proposal to Amend the System of Airport Slot Allocation in the European Union

Although air traffic in Europe is forecasted to double by 2030, many major European airport hubs are operating at or close to full capacity already today, i.e. they cannot meet the airlines' demand for takeoff and landing slots. A continuous increase of airport capacity (mostly by adding additional runways) is hardly possible in the densely populated European Union. The Council Regulation (EEC) 95/93 on common rules for the allocation of slots at Community airports (CR 95/93) establishes a set of rules for the allocation of takeoff and landing slots which are the most critical bottleneck in European air traffic. The basic allocation principle is grandfather rights: an airline will generally be allocated the same slot in the subsequent scheduling period which it has used in the respective preceding period. Based on the current allocation scheme, peak hour slots at congested airports are almost never available for allocation to a different air carrier. Also, the current allocation scheme does not take into account the seats available on the aircraft used by an airline or whether such aircraft is fuel-efficient or particularly loud. In sum, the current slot allocation mechanism based on grandfather rights does not necessarily promote the efficient use of scarce runway capacity or competition between airlines. Several attempts have been made by the European Commission to alter CR 95/93, but the basic principle of grandfather rights was always preserved. On 1 December 2011, the European Commission published its 'Proposal of the European Parliament and of the Council for a regulation on common rules for the allocation of slots at European Union airports', which objective is to ensure optimal allocation and use of airport slots at congested airports, primarily by strengthening and effectively implementing slot allocation and use, and enhancing fair competition and competitiveness of operators. In preparation of this Proposal, the European Commission carried out a public consultation in 2010 and commissioned various studies to independent consultancy firms. This article discusses the various options explored in the public consultation and the studies which have been included by the European Commission in its Proposal, and what the potential upsides and downsides of such options are should they be eventually enacted.

Connectivity levels and the competitive position of Spanish airports and Iberia’s network rationalization strategy, 2001–2007

This paper examines the connectivity of the Spanish airport system between 2001 and 2007. Over the period, network carriers considerably strengthened the connectivity between Spanish airports and major European hubs. Although OneWorld is still the dominant alliance in Spain, SkyTeam and Star achieved a larger connectivity share through the growth of indirect services provided through their northern European hubs. In addition, the network rationalization strategy of Iberia and its decision to concentrate operations at Madrid-Barajas had important implications for the connectivity of other Spanish airports. Low-cost carriers have boosted direct connectivity from secondary Spanish airports.

Container sea ports and network connections within the Gulf of Finland

The world was revolutionised by container transport during the late 1950s, but technology started to play a key role in Northern Europe during the end of the 1980s. Rarely research has concerned about small spoke countries, which is our interest in this work. We analyse the longitudinal development of the first tier connections from and to Estonian, and Russian St. Petersburg container sea ports – these are also compared to most recent situation in Finland. Research shows that amount of connections have not increased during the longer period of time, but volumes have shown significant improvement. Most important container connections are available for a very small number of Northern European hubs in the studied sea ports offering critical opportunities for future development. Overall connections from Estonia are limited to Northern Europe, but are very good for nearby neighbours, as is the case with Finland. However, St. Petersburg container sea port has interesting direct long-distance connections to the Americas. The St. Petersburg container sea port has developed as an important part of Baltic Sea Region container transportation network, and its neighbours need to take this into account (e.g., arrangement of empty containers/low fared exports).

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.

EU/US Open Skies – Competition and change in the world aviation market: The implications for the Irish aviation market

The EU/US Open Skies agreement became operational on March 29th, 2008. The 23% increase in flights between Ireland and the US in 2008 under the agreement is the highest expected increase under the agreement and is almost three times greater than the expected overall increase in air travel between the EU and the US. Open Skies increases the number of routes between Ireland and the US by 3 to 10 and allows airlines to fly directly to and from Dublin without a compulsory stop at Shannon. There are very strong economic, investment, visitor, political and ethnic ties between Ireland and the US and air travel between the countries per head of population in Ireland is 5.6 times greater than the EU average. The benefits from Open Skies include lower fares, new routes and direct services reducing the need to backtrack over European hubs, in addition to the abolition of the requirement to stopover at Shannon.

The impact on traffic, market shares and concentration of airline alliances on selected European—US routes

This paper examines the impact of airline alliances on traffic of the constituent airlines using an analysis of US Bureau of Transportation Statistics T-100 International Market Data on a monthly basis for five routes to the US from European hubs. The European hubs are Frankfurt and Paris. The period covered is January 1990–December 2003; a sufficiently lengthy period to enable the derivation of good time-series models before the ‘intervention’ of alliance formation and development. The alliances focussed on are Air France and Delta, part of the SkyTeam Alliance and Lufthansa and United Airlines, part of the Star Alliance. It is possible to distinguish code sharing agreements and then the subsequent immunity from US antitrust legislation. It is also possible to suggest some conclusions on the differences in alliance development in the more liberal open skies environments adopted by many European countries with the more traditional, stricter regulated bilaterals that exist in others such as the UK. Competition is examined using the Hirschman-Herfindahl Index so as to throw light on the impact of alliances on market concentration by route.

Les capitales financières : la place de Francfort et ses perspectives

Financial locations : Frankfurt’s place and perspectives The introduction of a common currency as well as the harmonization of rules and regulations in Europe has significantly reduced distance in all its guises. With reduced costs of overcoming space, this emphasizes centripetal forces and it should foster consolidation of financial activity. In a national context, as a rule, this led to the emergence of one financial center. Hence, Europeanization of financial and monetary affairs could foretell the relegation of some European financial hubs such as Frankfurt and Paris to third-rank status. Frankfurt’s financial history is interesting insofar as it has lost (in the 1870s) and regained (mainly in the 1980s) its preeminent place in the German context. Because Europe is still characterized by local pockets of information-sensitive assets as well as a demand for variety the national analogy probably does not hold. There is room in Europe for a number of financial hubs of an international dimension, including Frankfurt. JEL classification : F15, F36, G1, G2, N20, R12

Italy's bright spots

Public funding problems have prevented Italy from catching up with other European scientific hubs. But some privately funded local initiatives show glimmers of hope. Quirin Schiermeier and Alison Abbott report.

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.

Are US air carriers to be feared?: Implication of hubbing to North Atlantic competition

A comparison was made of the passenger generating capacity of North American and European carrier hubs, using data from 1990. It was found that European carrier hubs were more effective at generating trans-Atlantic traffic than US and Canadian carrier hubs were. However, when US carrier observations were split between traditional overseas carriers (TWA and Pan American) and combined domestic and international carriers (e.g. Delta, American, United), it was found that the combined domestic and international carriers had hubs that equalled the European carrier hubs in traffic generating capability. This result provided an explanation for the recent US carrier increases in trans-Atlantic market share.