Airport Economics

Hubbing is not entirely without its diseconomies, although these are largely external to the airline. In generating large volumes of transfer passengers, and requiring them to be handled swiftly, the hub airline contributes adversely to the peak-load capacity problem at the airport, not only on the runways but on the aprons and in the terminals as well. Its demand for facilities at the hub, such as baggage transfer equipment, can be very peaked indeed. Flight complexing leads to some severe peaking in arrivals and departures and this is necessary to ensure a large number of usable connections. But at the same time it can reduce efficiency in the utilization of airport facilities which might only be maximized when demand is spread evenly across the operating day. In this regard there can be a conflict between the interests of hub airlines and profit-motivated airport authorities. In many ways the economics of transfer traffic are not so attractive to airport operators as those of origin destination traffic. In some cases fierce competition for footloose transfer traffic, traffic that can choose between a number of different hubs, has induced some airports like Amsterdam, Dublin and airports in Spain and Italy to waive their passenger charges for connecting traffic. Income from aeronautical activities is often not so great as the revenue airports earn from their non-aeronautical commercial activities. But here too connecting traffic may often not be all that remunerative to the airport on a per-passenger basis. While at...