muralir
Topic Author
Posts: 100
Joined: Mon May 27, 2013 3:44 pm

Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 3:58 am

This is more of a speculative post, but I'm curious to hear your thoughts about how the move to international p2p flying will affect airports that have both large hub / transit traffic *and* O&D traffic.
With the rise of planes like the 787 and A350 I think the effect on hubs like DXB which have comparatively less O&D traffic is pretty clear. It'll be negative. Conversely, for places that were never hubs, these new aircraft are increasing their international nonstops, which is a clear plus.

But how about for airports that have both? To take my hometown airport, ORD, as an example. Thanks to these new aircraft, it will soon join the elite group of airports that have nonstop flights to all continents except Antarctica. OTOH, it's losing a lot of the transit traffic that allowed ORD to serve more destinations than its O&D traffic warranted. For example, in the 80s/90s, ORD was AA's primary European gateway. Now, the only year-round AA european service is to LHR, as AA is able to provide direct services from its other hubs (even smaller ones like CLT and PHL) and doesn't need one big super-hub to fill large jumbos.

What does the rise of the 787 and A350 mean to airports like ORD? Will it be a net negative, due to "hub bypass" demand destruction? Or on balance will it be a net positive, with new p2p routes providing more connectivity than the hub bypass destroys?

These forces will probably play out differently for different airports, so I'm curious about your thoughts on any airport, not just ORD.
 
User avatar
lightsaber
Moderator
Posts: 17953
Joined: Wed Jan 19, 2005 10:55 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 4:59 am

P2P aircraft will help hubs with large O&D that can significantly expand. That is *not* ORD.
The 787 and A350 were the *last* wave of hub bypass. Now it is the MAX/NEO/A220 and (hopefully) 797.

That takes runways and gates to open new routes during the prime hub waves. Those hub waves are when people want to fly most by nature.

And hub bypass... usually one end is a hub that can expand when people want to fly.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
User avatar
scbriml
Posts: 17388
Joined: Wed Jul 02, 2003 10:37 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 5:34 am

The simple fact is, there are very few, true point-to-point routes being flown. Very few routes don't have a hub at one end or the other.

We're still seeing significant traffic growth at all the major hubs. They're not going away, quite the opposite.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
EvanWSFO
Posts: 1137
Joined: Sun Mar 04, 2018 9:22 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 5:42 am

scbriml wrote:
The simple fact is, there are very few, true point-to-point routes being flown. Very few routes don't have a hub at one end or the other.

We're still seeing significant traffic growth at all the major hubs. They're not going away, quite the opposite.


^^^^ THIS ^^^^
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
pbody
Posts: 48
Joined: Mon Apr 11, 2016 4:09 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 5:52 am

The main reason we will never see as many P2P routes as we would all like is crewing. It makes no sense to have a whole set of crew dedicated to one P2P route or to have to deadhead them elsewhere to work another P2P flight. For as long as crew are required on planes I don't think we will see many true P2P routes.
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 6:47 am

Hubs are really good for second tier markets. Dubai (and IST) serve a lot of second tier markets that will not be getting nonstop to London and New York.

As India obtains greater P2P traffic, It won't be necessary to stop in DXB to go to India anymore. But DXB will open other markets as they develop - either developing countries or niche, wealthy markets like New Zealand. The world is always changing. As cities graduate to alpha status, 5-10 more little cities are growing and will replace it at the hub. A hub at DXB will be necessary for eons.

USA is a mature market ,but it, too will always need hubs. The top 20 cities in the USA are pretty much all connected, but to get between second tier US cities (100*100=10,000 or 5,000 bidirectional city pairs for the top 100 cities), you must use a hub or charter your own plane if you need to go nonstop. Hubs are unavoidable.
 
aviationaware
Posts: 2812
Joined: Mon May 19, 2014 12:02 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Tue Jul 17, 2018 9:13 am

People misunderstand this entire p2p business. Almost all of those new 787 and A350 routes that are commonly presented as an example of a rise in p2p still have a hub on one end. This is simply expanding the networks at hubs.
That's not hub bypassing.
 
muralir
Topic Author
Posts: 100
Joined: Mon May 27, 2013 3:44 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 1:13 am

aviationaware wrote:
People misunderstand this entire p2p business. Almost all of those new 787 and A350 routes that are commonly presented as an example of a rise in p2p still have a hub on one end. This is simply expanding the networks at hubs.
That's not hub bypassing.


You're right. There's still usually a hub at one end. But what do you call e.g. a lot of DXB flying which connects one hub to a tier-II city? That is, if a hub is classically T2-Hub-T2 (e.g. STL-ORD-DUB), DXB definitely has a lot of that, but it also has a lot of Hub-DXB-T2 (e.g. ORD-DXB-MAA).

I do accept your main premise. I was wrong in calling 787 routes true P2P. But maybe it's worth breaking down hub flows in more detail, like I mention above. Very few hubs have hub-hub-T2 flows. For example, I suspect DFW-ORD-DUB is a highly unlikely routing. That trip would far more likely be done as DFW-LHR-DUB. IMHO, there are only a handful of hubs that, due to history and/or favorable geography, have significant hub-hub-T2 traffic (or more accurately T1-hub-T2 flows; technically the T1 city wouldn't be a hub for the airline you're taking). Probably LHR, FRA, AMS, CDG, SIN, HKG, maybe ICN & NRT, and the new ME hubs + IST. As other hubs get more international T2 connectivity with these new aircraft, would this smaller group of hubs need to worry about hub bypass?
 
muralir
Topic Author
Posts: 100
Joined: Mon May 27, 2013 3:44 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 1:18 am

lightsaber wrote:
P2P aircraft will help hubs with large O&D that can significantly expand. That is *not* ORD.


Actually with the runway reconfiguration completed and an $8bil terminal rebuild / expansion underway, in 5 years, ORD may be one of the few US hub airports with significant capacity to expand. Of course nothing like brand new airports in Turkey, Beijing, or Dubai. But in the US, I can't think of another airport besides DEN that will have as much room as ORD. Or am I missing something?
 
2travel2know2
Posts: 2803
Joined: Mon Apr 26, 2010 3:01 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 1:51 am

If a country holds 5th liberty rights which allows it to fly between airport A to airport B overflying its hub, and that airline feels that if it adds a dedicated P2P flight will free lots of seats from its hub flights, then it's understandable the point of P2P.
An example of P2P in Central America / Colombia is AV which in addition to its flights from its hubs LIM, BOG and SAL to MIA, it offers P2P from GUA, MGA, SJO, MDE, CLO et al.
I'm not on CM's payroll.
 
kavok
Posts: 575
Joined: Wed May 11, 2016 10:12 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 4:04 am

I break it down like this. There are three tiers of airports:
Tier 1 airport: ORD, DFW, ATL, PHL, DTW, etc. (Multiple TATL destinations)
Tier 2 airport: IND, AUS, RDU, BNA, etc. (1 TATL flight)
Tier 3 airport: SBN, GRR, MSN, ROC, etc. (no TATL flight)

The new TATL point to point routes the OP is referring to are USA Tier 2 (US2) to European Tier 1 (E1) or US2-E1. This does impact USA Tier 1 airports because historically all USA Tier 2&3 pax had to pass through a USA Tier 1 before heading over seas (US2/US3-US1-E1-E2/E3) . Now that is not the case.
The equalizer is that US Tier 1 airports are still critical for connecting any US Tier 3 pax. And, while not fully exploited, US Tier 1 airports are advantageous for a pax coming from a European Tier 2 heading to a US Tier 3.
 
MIflyer12
Posts: 5639
Joined: Mon Feb 18, 2013 11:58 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 4:32 am

kavok wrote:
I break it down like this. There are three tiers of airports:
Tier 1 airport: ORD, DFW, ATL, PHL, DTW, etc. (Multiple TATL destinations)
Tier 2 airport: IND, AUS, RDU, BNA, etc. (1 TATL flight)
Tier 3 airport: SBN, GRR, MSN, ROC, etc. (no TATL flight)

The new TATL point to point routes the OP is referring to are USA Tier 2 (US2) to European Tier 1 (E1) or US2-E1.


Emphasis mine. There's nothing new to that. It goes back to TWA's 120-minute ETOPS for 767 TATL flights in 1985. TATL 757 flights fragmented demand even further. Now we have (a few) TATL MAX 8 flights.
 
HeyHey
Posts: 76
Joined: Wed Jun 07, 2017 7:57 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 2:13 pm

I like your tiered definitions. I think a further delineation could be Tier 1A (JFK, ORD, BOS) and Tier 2A (DTW, ATL, PHL) based on the prominence of O&D as a percentage of the traffic.

On the US side of things, I think we'll continue to see a few more Tier 1 airports develop into Tier 2, and we'll also see current Tier-2 airports develop more TATL and TPAC service. I think it boils down to demographics over the long term. There are several large Tier 1 and Tier 2 cities that have rapidly growing populations and economies that can support more TATL flights, and if a flight can be supported at a Tier 1 or Tier 2 city someone will serve it eventually. We've seen that happen with AUS, RDU, MSY, IND, and BNA recently. It wouldn't surprise me at all to see those same cities pick up a second TATL destination over the next 2-3 years, and they are also on the short list of TPAC expansion in the next 5-10 years. I have no doubt we'll see a few more cities pick up TATL that do not currently have it. That increased capacity to Europe from Tier 2 US cities is going to pull down passenger numbers through the traditional hubs, although the mega hubs in Europe won't see much of a change (maybe slightly increased due to induced demand).

On the flip side, though, that same phenomenon is going to happen in Europe. Tier 2 European cities are going to be targets for nonstops to the biggest American destinations: NYC, Chicago, LA, DC, and Boston. As such, even though those airports may see less US originating European travel, they will likely see more Europe originating traffic. The airports that (IMO) could be left out are the Tier 1 US hubs that aren't going to be the biggest targets for additional Tier 2 European cities: ATL, CLT, DFW, and DTW.
 
log0008
Posts: 477
Joined: Fri Aug 05, 2016 12:17 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 2:23 pm

I honestly think that the aviation market is so large that even with point to point growth the impact on hubs will be minimal, many hubs are now at capacity anyway.
 
Dieuwer
Posts: 1415
Joined: Tue Dec 26, 2017 6:27 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 4:28 pm

I think the more interesting question is what Tier-1 hubs have been "demoted" due to sub-Tier-1 cities being "promoted"?
Take BOS for instance. In the past you had to connect in JFK, DTW, or ORD to fly to Asia. Nowadays, you can fly directly to Asia on CX, JL and HU. So, IMHO that means that traffic that went from BOS over JFK,DTW, or ORD now no longer does. In a sense, JFK, DTW and ORD got "demoted" from a BOS perspective.
 
TWFlyGuy
Posts: 397
Joined: Mon Apr 17, 2017 5:10 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 4:50 pm

muralir wrote:
lightsaber wrote:
P2P aircraft will help hubs with large O&D that can significantly expand. That is *not* ORD.


Actually with the runway reconfiguration completed and an $8bil terminal rebuild / expansion underway, in 5 years, ORD may be one of the few US hub airports with significant capacity to expand. Of course nothing like brand new airports in Turkey, Beijing, or Dubai. But in the US, I can't think of another airport besides DEN that will have as much room as ORD. Or am I missing something?


I believe Denver is adding some capacity as is Charlotte. At the end of the construction in CLT there will be as much capacity as ATL has today.
 
Andy33
Posts: 2453
Joined: Tue Sep 15, 2009 9:30 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 5:18 pm

When people say that 787s/A350s aren't really flying point to point because there's usually a hub at one end, and as a result there's no hub bypass going on, that's only partly true. Look at BA's 789-operated LHR-SCL. No doubt that LHR is a BA Hub, or that SCL is a major hub of OneWorld partner LATAM, But before this. service started, the only way to make the journey was to connect at an intermediate hub (MAD, or somewhere in North, Central or South America) and those hubs are being bypassed. In the same way QF's celebrated PER-LHR certainly has a home airline hub at one end and an alliance partner hub at the other, but QF previously routed its passengers through DXB, which has now been bypassed.

Then there are airlines that don't hub at all - so the origin or destination airports have a crew base, but no other hub infrastructure like planned connections. Norwegian has some routes like this, you can book connections onto its shorthaul network if there happens to be a flight at around the right time, but there's no real effort made to ensure that a range of viable shorthaul connecting flights exist from each European city its long haul routes serve.
 
strfyr51
Posts: 3894
Joined: Tue Apr 10, 2012 5:04 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 8:02 pm

The B787 and the A350 negated the requirement to utilize the B747 and the A380 in that NOBODY hsd to feed the flight or the airplane becuase you can Bypass that gateway all together. That was the premise FOR the A380. Fly into a gateway city to collect passengers from multiple "regional" flights and fly them to another Gateway city and feed a bunch of "regional" flights. The problem was? No US major thought like that and not very many Non US majors gave it a lot of credence either.
Just looking at United. They would have needed a minimum of 24 A380's had they followed that scenario.
At the Price of 1 A380? They got 2 B777's or 2 B787's and they had enough legs on them to go wherever the A380 went while incurring LESS Loss potential per airplane. In short? The A380 wasn't cost effective.. And?? it STILL can't and probably Never will carry out-sized cargo so it's potential for a freighter is limited. Airbus didn't sell the need for that airplane until they decided to launch it. By then? Everybody had already made up their minds. So even thought some carriers Did buy it? They bought very few of them on average and those they use sparingly.
Had Airbus REALLY been thinking?
They would have built an airplane that fit what the Main international airports had in facilities. And they would have built an airplane they could make a REAL case for. They didn't have much of a problem building the the A350 after Boeing announced they intended to build the B787 out of CFRP. Theu also avioded any Hi tech solutions with the Batteries until Boeing showed the way that made the Battery safe . In short? They just ME TOO'd the hell out of every solution waiting for someone ELSE to do the heavy lifting. Something they MOST definitely need to get away FROM. They have the Brains and they need to show they CAN instead of "Reverse Engineering" everything.
 
User avatar
DocLightning
Posts: 21523
Joined: Wed Nov 16, 2005 8:51 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 8:56 pm

Depends on what you mean by "hurt." If we make the simple assumption that an ever expanding passenger load is "good" for hubs, then point-to-point services may somewhat slow their growth, but as the global population grows, so will the hubs.

However, more is not necessarily better. As hubs approach capacity, they begin to suffer from more and more delays. They lose efficiency. Passengers start to avoid them, even. For example, I will not pass through any of the NYC airports for anything other than O&D.

And then there's scbriml's very valid point. Start listing point-to-point routes. I'm having difficulty with even one. Airliners like the 788 have made it easier to start hub-to-point routes that used to be less common, but not true P2P.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
User avatar
flyingclrs727
Posts: 2400
Joined: Thu Apr 19, 2007 7:44 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 9:05 pm

muralir wrote:
lightsaber wrote:
P2P aircraft will help hubs with large O&D that can significantly expand. That is *not* ORD.


Actually with the runway reconfiguration completed and an $8bil terminal rebuild / expansion underway, in 5 years, ORD may be one of the few US hub airports with significant capacity to expand. Of course nothing like brand new airports in Turkey, Beijing, or Dubai. But in the US, I can't think of another airport besides DEN that will have as much room as ORD. Or am I missing something?


DFW and IAH have lots of expansion capability. They were both designed to be expanded well into the future before construction ever started.
 
jagraham
Posts: 881
Joined: Sun Jul 17, 2016 11:10 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 10:44 pm

lightsaber wrote:
P2P aircraft will help hubs with large O&D that can significantly expand. That is *not* ORD.
The 787 and A350 were the *last* wave of hub bypass. Now it is the MAX/NEO/A220 and (hopefully) 797.

That takes runways and gates to open new routes during the prime hub waves. Those hub waves are when people want to fly most by nature.

And hub bypass... usually one end is a hub that can expand when people want to fly.

Lightsaber


ORD is in the midst of a significant expansion. The runway reconfiguration allows for double the traffic unless there are storms. The terminal redevelopment is about to get underway. 35 or so more gates. But most are spoken for by UA and AA

http://www.chicagotribune.com/news/loca ... story.html
 
IKELAELA1
Posts: 6
Joined: Thu Dec 11, 2014 5:53 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 11:19 pm

This isn't too hard to figure out. Most people will search for common airports in their territory. One might pick out SMF over SCK, because of the popularity, but truth being told here, SCK is a hub for a regional. You would never know that unless you lived in Stockton, or your favorite airline was, Allegiant
 
User avatar
Matt6461
Posts: 2909
Joined: Wed Oct 16, 2013 9:36 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 11:36 pm

The p2p versus hub debate is maybe the stupidest all-time debate on A.net.
All you have to realize is that "point" includes "hub." Yes pretty much all longhaul requires a hub for at least one end but that is entirely consistent with p2p options proliferating. There are simply more hub-point options than there were in, say, 2000. This is so obvious that providing a cite shouldn't even be necessary.

As for help/hurt - depends what you mean. It probably means the total share of traffic through megahubs, even those with high O&D, decreases. Absolute numbers probably still increase.

More importantly, imo, it helps high O&D hubs because those living within the catchment area have more direct options. No reason to look at this issue through a zero-sum lens.
 
VictorKilo
Posts: 230
Joined: Wed Jul 05, 2006 7:39 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Wed Jul 18, 2018 11:40 pm

The 787 and 350 (like the 777 before it) increase the number of spokes to each hub, and by doing so, decrease the amount of traffic that needs to double connect to reach a destination. The only way a hub can get hurt is if it requires double connecting traffic to function. And the only hub that operated on that model is NRT for NW/DL. When AUS-SIN traffic now goes one stop through SFO instead of through both MSP and NRT, and BOS-SIN now goes directly through NRT on JL instead of also going through DTW, and the hub can only connect passengers coming from the US for legal and geographical reasons, there is no business reason for the hub. But the NRT hub is mostly dismantled and I don’t see any other hub that can’t expand single connections to more than replace double connections.
 
vadodara
Posts: 949
Joined: Mon Feb 20, 2017 7:45 pm

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Thu Jul 19, 2018 5:03 pm

muralir wrote:
What does the rise of the 787 and A350 mean to airports like ORD? Will it be a net negative, due to "hub bypass" demand destruction? Or on balance will it be a net positive, with new p2p routes providing more connectivity than the hub bypass destroys?.


The rise of 787's/A350's mean that airports with a great deal of O/D traffic can fly to more/longer 2tier/3tier cities non-stop. Incremental traffic being a hub helps.

For likes of ORD, it can only help assuming AA/UA are able to feed in traffic and 'transfer' it efficiently to the international terminal.
For likes of JFK with limited connectivity, it does not help as much.

The main issue with most US airports (exception are likes of ATL/DEN ) were that they were never designed for efficient transfer. Just look at DFW. Moving both passengers and bags to Terminal D is a big logistics challenge.
 
Waterbomber
Posts: 849
Joined: Sat Jul 09, 2016 11:51 am

Re: Will point-to-point hurt or help hubs with large O&D traffic?

Fri Jul 20, 2018 12:03 pm

scbriml wrote:
The simple fact is, there are very few, true point-to-point routes being flown. Very few routes don't have a hub at one end or the other.

We're still seeing significant traffic growth at all the major hubs. They're not going away, quite the opposite.


This guy answered it.
Point to point is not point to point unless you don't have feed at neither ends.
Only few operate in this way. DY is one of them and they are failling at it miserably.

In most cases so called point to point aircraft are replacing volume for frequency out of hubs. It works when all parameters line up, but the truth is that operators are downsizing the aircraft size without adding frequencies in proportion and the airline landscape is fragmenting, resulting in more airlines operating smaller planes.
On the one hand this means higher CASM because aircraft like the B787 and the A350 have lower fuel costs but all the rest stays the same with less seats to fill versus VLA's.
On the other hand it also means more competition and lower yields as the market is opened to new competitors with their very own B787/A330/A350`s.

The only ones on the winning side of this is the aerospace industry. A and B are producing and selling widebodies at the rate of narrowbodies.
The mark up is bigger.

If fuel prices go up, you'll suddenly see momentum shift towards bigger bersions of the same airplane.
I'm not sure that you can stil call those p2p aircraft.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos