Estimating the sustainability of hubs

Several airports in the world are or will be confronted with capacity problems in the near future. As a result of this congestion, many airports will face a selectivity problem: which traffic segments must be accommodated and which segments are less crucial? At hub airports there is generally one (dominant) hub carrier. In case particular operations of a hub carrier will cease to exist, this may have negative effects on other operations in the carrier’s network: operations which are normally fed by the ceased operation will experience a loss of passengers. This phenomenon can be indicated as ‘reduction of hub sustainability’. To quantify the effect of ‘reduction of hub sustainability’, SEO/AAE has developed a model, which determines the revenue loss in a hub carrier’s network in case certain operations of the hub carrier will cease to exist. The model assumes that the hub carrier has three instruments to mitigate the described negative effects and to keep load factors above the critical level: ticket price, flight frequency and aircraft size.