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It is important to understand the two types of traffic at a hub. There is connecting traffic -- people who are going from somewhere else to somewhere else and j
by ubernostrum 12y ago
It is important to understand the two types of traffic at a hub. There is connecting traffic -- people who are going from somewhere else to somewhere else and just using the hub as a point to change flights. And there is what the airline folks call "O&D" traffic (which stands for "Origin and Destination") -- people who are either starting their trip at the hub or ending their trip at the hub.
Traditionally, hub locations have been chosen based on offering convenient connections to other places, but also on high levels of O&D. Thus, for example, New York in the United States, London in the UK, Frankfurt in Germany, and so on; all of these are convenient locations to get to other parts of their respective countries, but they are also major business and/or tourism centers, meaning lots of people are either based there or want to go there. O&D traffic is typically more valuable to an airline than connecting traffic.
But there are now four airlines/hubs which have extremely low O&D traffic, and exist almost solely to provide connections between points in Europe/the Americas and points in south/southeast Asia and Oceania. Those are Emirates (Dubai), Etihad (Abu Dhabi), Qatar (Doha) and Singapore (Changi). This is a very different business model from other airlines, and to an extent it can only work if the carrier and the hub are heavily subsidized by the local government.
So there's less incentive for other airlines to fly into those airports; generally it only happens when the airline can partner with the home carrier (as Qantas has done in the past with Singapore, and now does with Emirates, or British Airways connecting to alliance partner Qatar in Doha), but it still isn't as desirable as flying to a place which has significant O&D traffic. Which means it's less likely that the middle-eastern hubs will see significant increases in service from other airlines, and much less likely for them to see lots of other airlines buying A380s to fly to those hubs, because for most of them it just doesn't make financial sense. BA, for example, does fly to Dubai as a connecting point, but does it on a more-economical 777, and uses the A380 for heavier O&D routes like London-Hong Kong and London-Los Angeles.
- walterbell 12y agoThanks for the analysis. Book publishers (vs. Amazon-as-hub) should take a lesson from the airlines in avoiding pure hubs :) Hopefully the newer versions of smaller aircraft will be as quiet (inside and outside) as the A380.
- gsnedders 12y agoNote that many business jets derived from passenger carrying aircraft sell themselves as being quieter — they just take the extra weight in sound insulation, which decreases the freight capacity of the aircraft (which is incredibly lucrative) as that's not something most owners of business jets care about.
- philwelch 12y agoSingapore, Dubai, and Qatar are increasingly becoming important business destinations. Plus, airlines like Emirates/Etihad/Qatar are partly commercial ventures but also partly prestige projects by Arab royalty, similar to owning football clubs (like PSG and Man City, coincidentally sponsored by Emirates and Etihad respectively) or bribing FIFA into awarding them the World Cup.