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Hub 'n' Spoke Vs Point To Point

Tue Jul 15, 2003 10:48 pm

EasyJet chairman wots-his-name recently told the British government that there is no sense in developing large hubs like Heathrow even further because he thinks that the future of air transportation lies in point to pint service.

Where do you think the future of air transportation lies?

We have seen both the benefits and disadvantages of the hub and spoke system.. to mention a few..

- good connections.. wide range of cities served
- little need for aircraft 'positioning' flights
-longer flying time than direct flight
-lower aircraft utilisation as large planes on the trunk routes have to wait for
all the 'feeder' aircraft to arrive
-effectively more expensive for the airline to transport 1 passenger from A to B via C than directly, yet sometimes it offers cheaper fares on onnecting flights as an incentive to fill seats

do you think that this is a good system for the airlines economically speaking or are you more inclined towards the Ryannair style network with several local point to point services apart from a not-so-large hub like stansted? or like those used by regional operators that are NOT owned by a major airline.

If you were to start an airline, what type of network would you construct?

i am curious to hear some opinions/experiences on this from different places on the globe.
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RE: Hub 'n' Spoke Vs Point To Point

Tue Jul 15, 2003 11:29 pm

I think somewhere in between the two seems like it would be the best way to run the airline. WN seems to have some flights that are point to point between two fairly small cities, and some others that are definitely hub to hub, or hub to "spoke" cities. They are doing very well right now! I think hubs can be inefficient unless it's really run well. DL at ATL and CO at EWR seem to be very effecient and well run operations. Especially since from many cities on the east coast, you can fly to lots of different European cites on CO with only one stop. The same goes for DL and it's massive international network of flights from ATL and also JFK. But point to point is more convenient but for a smaller number of passengers. You wouldn't need an A380 to go from BWI to TLV, but you might consistently sell out a 757 size plane with excellent range that could do it nonstop.

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RE: Hub 'n' Spoke Vs Point To Point

Tue Jul 15, 2003 11:30 pm

If I started an airline, I would actually use both models. People claim the hub-and-spoke system doesn't work. It has both positive and negative contributions to the airline. Point to Point service on popular routes and hub-and-spoke flights to cover well-sized cities that wouldn't otherwise support point-to-point.
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RE: Hub 'n' Spoke Vs Point To Point

Tue Jul 15, 2003 11:57 pm

True, passengers prefer direct non stop flights, but hubs provide a sheer diversity of destinations for the smaller spoke cities. Otherwise how on earth would you ever get from West Yellowstone, Montana to Key West, Florida?
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RE: Hub 'n' Spoke Vs Point To Point

Wed Jul 16, 2003 12:09 am

a couple of examples:
WN has both and is very sucessful
B6 has hub-and-spoke and hub-hub and "connect-the-dots" routes and does REALLY well.

FL was not doing too good on the hub-spoke. However, lately they have grown. yes, they still do have an ATL hub, but most of the populaar destinations can be reached without having to go through a hub. Also, they goe BWI to relieve the ATL hub. But who would have thought that LGA-CAK or MCO-Bloomington/Normal would have service. thier system is working well.
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RE: Hub 'n' Spoke Vs Point To Point

Wed Jul 16, 2003 12:30 am

In an ideal world, I'd like to go to my nearest airport (just happens to be LHR) and fly anywhere in the world. Of course, I can't, but for a number of reasons. The most significant at LHR is that it's just about full! Just about every airline in the world wants to fly to LHR but very few new ones are likely to get in.

Isn't there also a significant difference here between the domestic US market and international markets. Don't bi-lateral agreements restrict who can fly where and how often? Yes, open-skies policies would be great, but again many of the major airports can't cope with much extra traffic. Boeing is obviously a 'supporter' of the point-to-point philosophy and sees big markets for lots of smaller planes, that's where the 7E7 is aimed, and maybe the domestic US market is big enough to support it. But most international visitors to US have to arrive at a fairly limited number of main 'entry' points and then connect. It's a pain, but that's the way it is. It may be that mainland Europe becomes more like domestic US and has a total open-skies policy.

So you have p-to-p in US and Europe, but to get between the two, you have to rely on h-to-h. In reality, I don't see how things can be very different.
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RE: Hub 'n' Spoke Vs Point To Point

Wed Jul 16, 2003 12:31 am

There is no definite answer to this question, it depends on a couple of factors.

Imagine you are called "British Airways" and based in Heathrow. Of course you would hub in LHR, rather than flying an empty 777 from Lyon, France to Kansas City. Same goes for highly centralistic countries like France, Poland, Greece, Portugal, Singapore, ... you get the point

Then you have forgotten the multi-hub carriers. Those have several hubs (some larger some smaller), among these are the large U.S. carriers, Air Canada, SAS and all those carriers with no real one homebase, and the European carriers with rather two hubs (one large, one small) like Iberia, Alitalia and Lufthansa ("parallel-hub-operations" in LH terms), also japanese carriers come to my mind. All those carriers are based in countries with no real business center (USA, Spain, Germany, ...).

If you are not blessed to have a base like LHR or FRA or ORD, and prefer flying to remote airports, then you opt for the point-to-point connections. Also, many of the real large carriers have a considerable amount of traffic which is hub-bypassing.

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RE: Hub 'n' Spoke Vs Point To Point

Wed Jul 16, 2003 12:35 am

The hub 'n spoke system is highly effective at funneling passengers from a small market into other small markets, or anything else for that matter.

For example: There probably isn't enough O&D pax a day to justify flying a CRJ between Shrevport, LA and Tri-Cities, TN/VA. But if you route that passenger through Atlanta, with passengers coming from New Orleans, Birmingham, Daytona Beach and so on, then you can get your plane to Bristol. Same principle is also at scale for international flights. On its own Atlanta might be able to support one flight a day to London, but with all of the feed traffic it can now support three flights.

The downside is that there is an increased chance for delays to negatively effect the system. In order for the hub to work all your inbound flights need to arrive at relatively the sametime, and your outbounds need to leave around the sametime as well. Physically we know that this is impossible. In order for that to work conditions usually need to be pretty ideal to facilitate one full bank to come and go. When the weather goes south, slowing down airport operations, the entire bank is in jeopardy. It can also effect the entire system, depending on how isolated that particular hub is.

As for point-to-point, the main advantage is that there are more direct and non-stop services between city pairs. As an example Southwest (America West also flew this at one point) has several daily flights between SMF and SNA. Neither station is a large operation for Southwest mind you, but enough demand exists to warrant such service. Plus passengers do not have to connect via SFO or LAX, or just fly SMF-LAX and drive the rest of the way to Orange County.

The downside is that point to point really doesn't work for smaller markets. You can't get a non-stop flight between SHV and TRI because there is not enough demand to begin with. There is certainly a lower limit as to city size which will allow for a point-to-point flight. There also needs to be some major draw between the two cities, like tourism or major businesses.

With that all said you still see more airlines running a pure hub and spoke model vs. a point-to-point model. Many airlines, even some majors such as Delta run a variety of point to point services. Despite having the mega-hub at Atlanta, Delta runs (in addition to what Song flies) a fair number of non-hub flights flown both by mainline and connection metal.

Even the European LCCs use "bases" to run their networks. An airline would probably not run Bristol-Malaga if neither Bristol nor Malaga was not already in their network from one of their bases.

But what makes a network p-t-p or hub based is ultimately the ability to connect to one flight or another.
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RE: Hub 'n' Spoke Vs Point To Point

Wed Jul 16, 2003 12:57 am

Back in the days before deregulation, airlines in the US operated using both systems. You might have flights like ATL-LGA or you might have flights like ATL-RDU-DCA. With a hub and spoke system, an airline with various fleet types can better schedule services so that they're not sending a 767 on a route that can just about fill a 737, or sending 737s on a route that needs a 757. Point-to-point is good to link major cities together without having to go through an airlines' major hub. A hybrid of this is a flight that flies from a hub city to an outstation to another hub city.
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RE: Hub 'n' Spoke Vs Point To Point

Wed Jul 16, 2003 1:40 am

Both ways have their own right. But some hubs (LHR being the perfect example) have come near to their maximum capacity in flight numbers. Growth can only come from using bigger aircraft. A flight with, lets say, a A310 from a secondary destination into such a hub will find it hard to find a slot if it has to compete with a 747 flight from somewhere else.

The point to point traffic makes most sense when a hub is not very near. Makes much sense for a huge, sometimes scarcely populated country like the USA with somewhat isolated provincial capitals, not for central Europe or Japan where the congestion is already very high.

In flight numbers the point-to-point system has of cause far more room to grow. But a hub has to be near a big city to make sense. Every major city has such an airport. And for many passengers a big city is the final destination already, so that for the reasons stated above pax originally coming from a small city will have no choice to come via a hub. In the future even more so than now.

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