Journal of Air Transport Management 6 (2000) 75}85
Scheduling issues and network strategies for international airline
alliances
Nigel Dennis*
Transport Studies Group, University of Westminster, 35 Marylebone Road, London NW1 5LS, UK
Abstract
An e$cient network structure with co-ordinated schedules is necessary to realise the potential of an international airline alliance.
This paper considers the scheduling issues that particularly a!ect alliances including multiple hub operations, other interfaces
between routes, airport slot and terminal allocations and the through working of aircraft. Key principles are identi"ed and illustrated
with examples from current airline operations. Comparisons are made of the e!ectiveness of the major alliance groupings in the
European arena and strategies to optimise the coverage and connectivity of the combined networks are advanced. ( 2000 Elsevier
Science Ltd. All rights reserved.
Keywords: Schedule; Network; Alliance
1. Introduction
One of the major bene"ts of airline alliances to both
carriers and passengers is the potential they o!er to
facilitate travel between an increased range of origin and
destination points around the world. To turn this into
reality however, requires the planning of an integrated
network with carefully co-ordinated schedules. It is the
hubs that play the critical role in linking together an
alliance network (Hanlon, 1996). US airlines have had
many years of experience in re"ning their hub strategies
and the &mega-carriers' have built up networks of multiple hubs to cover the whole US domestic market (Shaw,
1993). In contrast, most airlines outside the United States
have had a concentration of routes on a single hub
airport in their home country. An international airline
alliance brings together hubs in di!erent locations, which
need to function e!ectively not only on an individual
basis but also when viewed as a combined network. This
is particularly advantageous where restrictions on tra$c
rights would otherwise inhibit provision of a through
service (Burton and Hanlon, 1994). With a number of
* Tel.: #44-20-7911-5000 x3344; fax: #44-20-7911-5057.
E-mail address: [email protected] (N. Dennis)
major alliances operating in each region of the world,
a key competitive advantage can be gained by o!ering
the widest range of destinations, the greatest choice of
frequencies and the shortest journey times. These factors
are strong drivers of market share (Proussaloglou and
Koppelman, 1995).
The members of an alliance will hopefully have been
selected with a view to providing some synergy (Flanagan and Marcus, 1993). Given the strength and investment these carriers will already have in their hub
airports, they must inevitably form the building blocks of
the alliance network. The geographical coverage a!orded
by each of these locations is crucial (Graham, 1995).
There are relatively few hubs that can e!ectively cover
a whole continent alone, while there may be a trade-o!
between dominating a key local market, such as London,
and choosing the best hub location for a wider region.
Although serving the greatest theoretical number of markets, mega-hubs can bring diseconomies in terms of excessive peaking or extended aircraft turn-around and
connection times. Furthermore, whereas back-tracking is
acceptable for freight tra$c, passengers are averse to
excessive circuitry and multiple hubs provide the most
e!ective means of overcoming this (O'Kelly, 1998). Small
peripheral gateway airports can at best o!er a &niche' hub
function (for example, Lisbon for Europe}South America
tra$c) but will be at a disadvantage to more centrally
located major hubs (Caves, 1997).
0969-6997/00/$ - see front matter ( 2000 Elsevier Science Ltd. All rights reserved.
PII: S 0 9 6 9 - 6 9 9 7 ( 9 9 ) 0 0 0 2 7 - 7
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N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
Also important is the type of passenger demand as this
will impact on the revenues that can be achieved. Computer software is available to model yields and schedules
in parallel (Clampett, 1998). A related consideration is
the level of competition from rival alliances. The aim is to
try and provide the broadest possible coverage in order
to attract the most custom and the greatest share of
frequent #iers, together with the fastest journey times to
obtain the highest yields. It is also useful to build some
geographical strengths that are resistant to competitive
pressure. The airport facilities at di!erent hub airports
present a major constraint in terms of available capacity
(runway slots, terminal space) and the capability to process large numbers of transfer passengers e$ciently.
Most airports were not designed with airline alliances in
mind and multi-terminal operations can create a major
bottleneck to e$cient ground handling.
The route network and schedule pattern adopted
therefore will be crucial in determining the e!ectiveness
of an alliance network.
2. The schedule problem
The e$ciency with which schedules are co-ordinated
at a hub airport has a major impact on the competitiveness of an airline's service. Table 1(a) shows how a simple
short-haul to long-haul connecting journey (A}X}B)
might take 12 h in the best case, including a transfer time
of only 1 h at the hub, equal to the Minimum Connect
Time (MCT). With the long-haul #ight operating daily
and the short-haul service every 4 h, the passenger will,
Table 1
Impact of scheduling on overall journey time!
Sector
Best
(a) Single connection: A}X}B (h)
A}X
2
X MCT
1
X delay
0
X}B
9
Total
12
(b) Double connection: A}X}Y}B (h)
A}X
2
X MCT
1
X delay
0
X}Y
8
Y MCT
1
Y delay
0
Y}B
2
Total
14
Average
Worst
2
1
2
9
2
1
4
9
14
16
2
1
2
8
1
2
2
2
1
4
8
1
4
2
18
22
!Delay is excess time spent at the hub airport beyond the Minimium
Connect Time (MCT) of 1 h.
Short-haul sectors A}X, Y}B assumed to operate every 4 h.
Long-haul sectors X}B, X}Y assumed to operate once per day.
however, have to wait on average 2 h extra to catch the
connection if scheduling is random. In the worst case
where the #ights just miss each other, an extra delay of
4 h will result, extending the overall journey time to 16 h.
Unlike the simple airline network with a single hub,
many of the possible journeys within an alliance network
will require a double connection at di!erent hubs serving
distinct geographical regions. This is where much of the
&added value' from the alliance compared to the existing
networks of individual carriers can be obtained: 40% of
KLM/Northwest's hub to hub tra$c is making a double
connection (Whitaker, 1996). In this context, random
scheduling will prove a greater burden to the passenger
as shown in Table 1(b). This gives an example of a longhaul journey with a short-haul feeder leg at each end
(A}X}Y}B), using similar criteria to Table 1(a) with Y assumed to lie between X and B. The best possible journey
time is now 14 h, with two transfers of 1 h each. The
average with random scheduling will be 18 h and in the
worst-case scenario it will take a staggering 22 h to accomplish a journey containing only 12 h #ying! It is also
instructive to note that the double-connection journey
can be achieved in the same total time as the average
single-connection journey of Table 1(a), meaning that
a limited intercontinental network built around e$cient
regional hubs can be as e!ective as serving many points
from a major hub but with poor connection times.
The waiting times at the hub airports can only be
minimised on a widespread scale by operating a wave
system of schedules whereby a large number of arrivals
are scheduled in close succession followed after a short
interval to redistribute passengers and their baggage by
a similar number of departures. This strategy therefore
becomes more important in the context of an alliance
network than for individual hubs alone. Unlike a random
timetable it can also be designed to ensure that a systematic range of connections are provided between key
target markets in both directions (Dennis, 1994a).
At London Heathrow airport, waves of #ights are not
operated and there is a fairly even distribution of services
throughout the day, with one runway used for arrivals
and one for departures, giving about 20 arrivals and 20
departures during each 30 min period of which around
40% are by British Airways (BA). An alliance partner of
BA operating into Heathrow airport therefore has no
real advantage from scheduling its services at any particular time as there will be about 40 connections on o!er
in each hour but only 16 of these are by BA * the whole
point of an alliance is of course to keep passengers
&on-line' within the alliance family. This simpli"es the
scheduling problem quite dramatically as there is then no
alliance constraint on timings at this location * all are
equally mediocre. Instead, frequencies on the key interhub links become critical. A combined hourly service by
BA and American to Chicago for example, would ensure
a good connection at Heathrow but is an extravagant use
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
of scarce slots which will ultimately undermine the range
of routes available from the airport.
Heathrow can be contrasted with the distribution of
#ights at Amsterdam Schiphol where KLM has a clear
wave pattern with four major peaks each day. A #ight
arriving at Schiphol in one of the waves * e.g. at 1800 h,
will connect to more than 70 outbound #ights in the
period 1900}1959 h and perhaps most importantly, 55 of
these connections are by KLM and its allies. If a new
partner joins KLM's alliance at Amsterdam the "rst
priority must be to move them into one of the KLM
waves in order to link-up e!ectively. This may be easy
enough for a regional airline operating from a non-hub
but starts to become more complicated when there are
also hub scheduling considerations at the other end of
the route.
3. Networks of multiple hubs
Most international airline networks have in the past
been scheduled as self-contained entities. The development of alliances requires the timetables of members to
be planned at least in conjunction with each other and
preferably as an overall system. This may be subject to
anti-trust considerations however (Aviation Strategy,
1998).
One starting point is to take the wave patterns that
already exist at the hubs of the combined grouping. In
some cases, as with KLM and Northwest #ights between
Amsterdam and Detroit, it may be relatively simple to
match up with the wave constraints at both ends of the
route. Northwest does however also operate a &"fth freedom' hub at Tokyo Narita. This links points in the US
and points in Asia but with only one wave per day of 747
aircraft in each direction. KLM #ies between Amsterdam
and Tokyo, while a number of Far East points that
Northwest serves (e.g. Seoul, Shanghai, Manila, Guam)
are either at higher frequencies or additional to those
KLM can o!er direct from Amsterdam. Although regulatory constraints may inhibit the scope for joint marketing, there would appear to be of some bene"t in enabling
Amsterdam #ights to connect with Northwest's Asia services at Tokyo.
Fig. 1 illustrates the problem in accomplishing this.
Northwest's #ights are optimised around the Asia}US
#ow and hence arrive in Tokyo around 1400 h from
Asian points. The KLM #ight to Amsterdam has left at
1020 h, providing good onward connections at Amsterdam where it arrives at 1510 h in the mid-afternoon
wave. If this was re-scheduled to a 1520 h departures to
permit connections at Tokyo, arrival in Amsterdam
would be at 2010 h, too late for most European services
except a few UK destinations. It is inevitable that the
Amsterdam connections must take priority but the potential of the combined networks cannot be fully realised.
77
Fig. 1. Mis"t of schedules at di!erent hubs.
This is a particular problem with hubs that operate
a low number of waves each day. It may therefore be
desirable to expand the number of waves at the main
hubs in an alliance group to improve the interaction
across the overall network. Some of the large US hubs
such as Dallas/Fort Worth have reached the position
where there are 10 &back-to-back' waves scheduled across
the day by American Airlines (at approximately 90 min
intervals from 0730 to 2100). This arrangement has been
given the description of a &continuous hub' (Treitel and
Smick, 1996). It di!ers from London Heathrow in that
there are still clear concentrations of arriving and departing services with around 50 aircraft in each wave but the
terminal infrastructure is more fully utilised than at
European hubs such as Amsterdam Schiphol. This gives
a su$cient range of time slots in which a long-haul #ight
can be scheduled to give the #exibility necessary to meet
constraints that may exist elsewhere along the route. For
this reason, the "fth freedom type hubs such as Northwest at Tokyo with their poor utilisation of aircraft and
ground infrastructure are becoming increasingly unattractive. A more e$cient solution is to form an alliance
with a local carrier in that region and use them to provide
the feeder sectors (Shenton, 1996). For example, Delta
withdrew its ex-Pan Am "fth freedom hub at Frankfurt
in favour of connections via Swissair at Zurich, Sabena at
Brussels and Air France at Paris Charles de Gaulle
(CDG) to reach the European destinations it formerly
served in its own right * and many more besides. Where
all the suitable local partners are controlled by rival
alliances however, or ultra-long-haul services continue to
necessitate an intermediate stop, "fth or seventh freedom
type hubs will remain necessary (Jenks, 1998).
In the longer term there is the possibility to revise
a wave pattern to better synchronise with that of an
alliance partner. Table 2 shows the KLM/Northwest
#ight from Amsterdam to Memphis. Memphis is one of
Northwest's smaller hubs with only three waves per day
but plugs an important geographical niche for the carrier
in the Southern US. In 1995, with only three waves per
day at Amsterdam also, the best that could be achieved
was to link the 1300 inbound wave at Amsterdam with
78
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
Table 2
Re-alignment of schedules!
Table 3
Strengthening of inter-hub links!
Year
Amsterdam
arrival wave
Amsterdam
dep
Memphis
arr
Memphis
departure
wave
1995
1300
1800
1520
1750
2000
1999
1230
1500
1800
1600
1835
2000
!Source: OAG Flight Guide.
the 2000 outbound at Memphis. This nevertheless gave
passengers connection times of more than 2 h at each
hub. The next available wave was 5 h later at Amsterdam
which would give a Memphis arrival in the middle of the
night. Since then KLM has added a mid-afternoon wave
at Amsterdam (arr 1500) and this enables much better
connections of about an hour to be o!ered at each end of
the route, with Northwest's domestic services still leaving
Memphis at about 2000 h. This is particularly important
on a sector such as Amsterdam}Memphis which can only
exist because of the hubs, as neither Amsterdam nor
Memphis is a big tra$c generator in its own right.
4. Improving the routes and links
In order to optimise the number of possible city-pair
linkages that can be achieved by an alliance and the
frequencies or choice of travel times o!ered, it becomes
important to strengthen the inter-hub services. These
should also be very attractive routes to operate for the
alliance partners because they have feed opportunity at
both ends and are unlikely to su!er much direct competition. Table 3 shows how some of these routes have
developed in the last few years. Amsterdam}Detroit, for
example, was not even operated in the early 1990s but
now enjoys four #ights per day, three of which are Boeing
747s! This re#ects the importance of cargo tra$c as well
as passenger feed to the KLM/Northwest alliance (Morrell and Pilon, 1999). Brussels}Cincinnati has a daily
#ight, utilising one of only two Boeing 747s in the combined #eets of Sabena and Delta. These examples demonstrate the economies of density that alliance hubs can
create (Nero, 1996). In the short-haul context there has
been some limited expansion on links such as Copenhagen}Munich but as many of these sectors already
operated at a high combined frequency, e$ciencies arising from the ability to "ll larger aircraft are often more
important than frequency increases alone. The success of
airline alliances in increasing the level of tra$c on interhub routes has been modelled by Bissessur and Alamdari
(1998).
Hub link and airlines
Pre-alliance
Daily frequency
July 1999
Daily frequency
Amsterdam}Detroit
(KLM/Northwest)
Frankfurt}Chicago
(Lufthansa/United)
Brussels}Cincinnati
(Sabena/Delta)
Copenhagen}Munich
(SAS/Lufthansa)
Amsterdam}Rome
(KLM/Alitalia)
Brussels}Vienna
(Sabena/Austrian)
0
4
2
4
0
1
3
5
5
6
4
6
!Source: OAG Flight Guide.
Despite the theoretical attractions of inter-hub links
there are still a number of key omissions by the main
alliances, particularly in the long-haul arena. These
would provide a major boost in coverage most e$ciently.
For example, there is a Chicago}Hong Kong non-stop
#ight but it is by United, not the oneworld partners.
Although BA and American have six #ights per day on
London}Chicago they are all from Heathrow * which is
of little use in relation to the many secondary European
destinations that BA only serves from Gatwick. To tap
the western US from Europe, Star needs a non-stop
Frankfurt}Denver service but historic links from Frankfurt to rival hubs at Dallas/Fort Worth and Houston are
maintained in preference. These may be greater local
tra$c generators than Denver but fail to exploit any
alliance synergies.
In the pre-alliance era, most intercontinental airlines
laid great emphasis on the number of destinations served
* but in many cases these could only justify one or two
#ights per week. In the 1980s for example, the long-haul
network operated by Scandinavian Airlines (SAS) served
25 cities outside Europe but with only 50 weekly departures from Scandinavia. Low-frequency, multi-stop services are unattractive to the business passenger and incur
high costs for the airline; nevertheless, many carriers
outside Europe and North America still operate them.
The smarter solution has been to rationalise the longhaul networks to concentrate on high-frequency services
on the denser routes. Although this was taking place
before alliance formation as a result of innovations such
as long-range twin jets, the hubs of partner airlines can
now play an increased role in providing connections to
the remaining points. SAS now serves just nine points
outside Europe but with 80 #ights per week from Scandinavia and all links except Singapore being non-stop.
Code-shares with Star Alliance partners (Thai Airways
International, Varig and Air Canada) add another three
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
points and 15 frequencies. Similar rationalisation is evident in the operations of many US and European airlines, particularly on the North Atlantic (Nuutinen,
1997).
The longer-term result of this concentration is that
some of the secondary hubs in an alliance such as Copenhagen, which is not a large tra$c generator in its own
right and rather overshadowed by Frankfurt in the Star
grouping, have seen their breadth of long-haul service
eroded. Links to Hong Kong (now a oneworld hub) and
Los Angeles (which can be reached on United via
Chicago) have succumbed. The growing number of speci"c partnerships being formed undermines these direct
services by draining tra$c away through an enhanced
range of connections (wider choice of journey time) and
by starving them of feed at one or both ends of the route.
Where the viability of these links then becomes marginal,
it is more e!ective to withdraw them and boost the
#ow through the hubs. In other cases, airlines whose
alliance mis"ts a particular route have abandoned it
but a service has been maintained or introduced by
a rival alliance grouping. For example, United has
dropped Zurich}Washington and concentrated on
Frankfurt}Washington while Delta has done the reverse.
In contrast to this retrenchment and consolidation,
a number of key opportunities to start new routes are
also presented by an alliance. As well as the hub-to-hub
links mentioned previously, new hub to spoke services
can be feasible. In places already on the combined net-
79
work, the local marketing and ground organisation can
be handled by a partner carrier who is well established
there, reducing start-up costs; the partner will also hopefully have a frequent #ier base in that region. Recent
inaugurations include British Airways/Canadian's service on London Heathrow}Ottawa and KLM/Northwest's service on Amsterdam}Seattle. In places not
already on the combined network the collective advantage of a new link is greater than it would be to one
partner alone and it will also avoid dilution of existing
alliance tra$c. Examples might be Sabena on Brussels}Bristol, a point not otherwise served by the Qualiflyer group and Lufthansa's Munich}Marseille route,
adding the French city to the coverage of the Star
Alliance.
Table 4 considers the number of US destinations available non-stop from "ve major European airline hubs in
1992 and 1999. There clearly has been considerable
growth in the underlying level of passenger demand over
this time period and airlines have expanded their service
to re#ect this. It does not appear, however, that the
number of US destinations o!ered from each hub has
altered dramatically because of alliance formation. The
more signi"cant increase is in the number of frequencies
o!ered by combining the two carriers' service and with
the exception of Northwest's new services from Amsterdam Schiphol, these extra #ights are largely on the interhub routes. Although some of the new services might not
exist without both partners marketing the #ight, British
Table 4
Impact of alliances on US service from European airlines' main hubs!
Airport
Airline
1992
US points served
1992
Frequencies
1999
US points served
1999
Frequencies
London Heathrow
British Airways
American
Total
10
133
10
133
11
6
11
178
105
283
5
32
5
32
12
3
14
82
28
110
11
79
11
79
13
2
13
119
28
147
KLM
Northwest
Total
9
58
9
58
9
7
14
73
63
136
Air France
Delta
Total
7
56
7
56
10
3
11
114
21
135
London Gatwick
Frankfurt
Amsterdam
Paris CDG
British Airways
American
Total
Lufthansa
United
Total
!Figures are based on non-stop service in the "rst week of July.
1992 "gures are for the European-based carrier only.
Although some #ights are code-shared they are only counted under the actual operating airline.
Source: Compiled from OAG data.
80
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
Airways has expanded its Gatwick network dramatically
despite being unable to formalise any link with American
Airlines. The hub connections for passengers making
a single transfer in Europe are therefore unlikely to be
much di!erent as a result of the alliance compared to
those which British Airways, Lufthansa, Air France, etc.
would have been able to o!er alone. It is primarily
passengers travelling to or from a hub city that get an
increased choice of #ights from the alliance and those
making a double connection who reap the bene"t of
the combined network. Veldhuis (1997) has quanti"ed
the connectivity of intercontinental alliance networks for
the case study of travel from or via Amsterdam.
5. Other interfaces between the airline networks
The larger alliances will "nd that there are a number of
locations around the world which are not major hubs for
their partner airlines but are nevertheless the common
terminus for a sizable number of miscellaneous routes.
These pose something of a dilemma * should they be
expanded into secondary hubs, potentially o!ering the
opportunity to challenge an incumbent rival, or should
they be wound down in favour of the alliance's own
existing hubs? In practice it is di$cult to make these
priorities for creation of a wave system but they can
perhaps play a greater role than in the past and allow
some marginal extra connections to be created. Table
5 shows how the Qantas #ight from Australia into
Frankfurt generates code-share links on British Airways'
services to Manchester and London Gatwick. An early
morning departure from Frankfurt to Birmingham has
also been added in Summer 1999. British Airways does
not serve Birmingham from the London airports, so this
is a genuine additional market. An assortment of other
connections on BA partners is also theoretically possible
but in most cases the waiting times are uncompetitive.
The Qantas #ight alone would not justify changing the
Table 5
Oneworld and British Airways' partners: possible European connecting
services at Frankfurt from 0545 Qantas arrival from Sydney and
Singapore (QF 5/BA 7305)!
Destination
Departure
Airline
Birmingham
Manchester
London Gatwick
Madrid
Helsinki
Barcelona
Warsaw
Krakow
0715
0720
0750
0755
1040
1320
1510
1820
British Airways
British Airways"
British Airways"
Iberia
Finnair
Iberia
LOT
LOT
!Source: OAG Flight Guide, July 1999.
"Code-share with Qantas.
times of other services at Frankfurt but when one starts
to add in arrivals by Cathay Paci"c, American, Japan Air
Lines, etc. then more critical mass is achieved. A major
shortcoming, however, is that Deutsche BA has extensive
German domestic services but nothing from Frankfurt.
Due to the laws of fortress hubs (Zhang, 1996),
Lufthansa's position at Frankfurt has been unassailable.
In this context it may be better for the oneworld airlines
to shift long-haul services away from Frankfurt to concentrate on Munich (Flottau, 1999). When the new
airport is completed, Berlin could also be an attractive
option as a Central European hub for oneworld.
In order to review the entire alliance network to improve linkages, it is necessary to identify where the key
pivots are in terms of schedule constraints and where
there may be scope to re-schedule more e!ectively. For
example on the Sydney}Singapore}Frankfurt service, the
key pivot is actually in Singapore where the #ight links
up with Qantas and BA services from other Australian
cities. The other important constraint is the time window
for an overnight #ight from Singapore to Europe. Sydney
is e!ectively a random hub as is London Heathrow and
BA and Qantas possess enough slots to switch them
around between routes, so these airports do not pose
a signi"cant restriction on the schedule.
In deciding whether to promote or ignore alliance
connections at the secondary intersections on the combined network, several questions must be considered. Do
they provide additional city pairs or signi"cantly shorter
#ying distances compared to the main hubs? In many
cases the answer will be no * few US airlines have taken
up similar opportunities on their domestic network. Do
they help support marginal operations? In many cases
the answer will be yes because airlines tend to struggle at
other carrier's hubs. This is why British Airways and
Qantas have an incentive to send a Manchester}Sydney
passenger via Frankfurt rather than London. Is the airport capable of accommodating this type of service? The
answer here is less clear cut but in general the scale of
alliance operations poses greater problems at the main
hubs than at the secondary locations or hubs of rival
groupings.
6. Airport constraints
Many airports were designed to meet the needs of
airline services at a historic point in time and are hence
ill-equipped to accommodate the requirements of the
new alliance groupings. This is particularly true of
multi-terminal airports such as London Heathrow where
the alliances are to be found scattered around the various
di!erent terminal buildings. Table 6 shows that all four
terminals at Heathrow are occupied by oneworld partners and although the Star grouping appears to have
a concentration on Terminal 3, the key short-haul feeder
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
81
Table 6
Terminal allocations at London Heathrow
Table 7
Slot allocations at London Heathrow * major airlines
Oneworld and British Airways
partners
Star and Lufthansa partners
Airline
% of air transport
movements
(1996/1997)
Alliance
British Airways (Terminals 1,3,4)
American (Terminal 3)
Canadian (Terminal 4)
Cathay Paci"c (Terminal 3)
Finnair (Terminal 1)
Iberia (Terminal 2)
LOT (Terminal 2)
Qantas (Terminal 4)
Lufthansa (Terminal 2)
Air Canada (Terminal 3)
Air New Zealand (Terminal 3)
British Midland (Terminal 1)
SAS (Terminal 3)
Thai (Terminal 3)
United (Terminal 3)
Varig (Terminal 3)
British Airways
British Midland
Lufthansa
Aer Lingus
SAS
Iberia
American
Alitalia
United
Others
37.7
13.2
5.0
3.4
3.2
2.3
2.2
2.0
1.9
29.0
Oneworld
Star!
Star
Oneworld
Star
Oneworld
Oneworld
Wings
Star
Various
links are British Midland in Terminal 1 and Lufthansa in
Terminal 2. Whereas the Minimum Connect Times are
typically 45 min within the same terminal they escalate to
75 min or more between terminals, in addition to the
extra hassle this relocation causes to the passenger.
Airlines are often unable to obtain a more logical
terminal allocation because the capacity is simply in the
wrong place. At London Gatwick, hub expansion by BA
means that the North Terminal is now too small while
a number of airlines would probably like to switch from
the South Terminal to the North Terminal including
American and CityFlyer Express * BA's own regional
a$liate. Paris CDG is able to accommodate Air France
and partners in Terminal 2 and the rest in Terminal
1 which is a more satisfactory division, although
American Airlines is currently moving from Orly
to CDG Terminal 2 which severs links with other
oneworld partners and the Star alliance may also wish to
relocate.
Although di!erent MCTs apply on a bilateral basis
between airlines at some of the more cumbersome airports, these are still far from consistent among the alliance partners. At Chicago O'Hare for example, in
Summer 1999, Sabena has a reduced MCT with United
(no apparent alliance link) but British Airways has no
special provision with American despite both being part
of oneworld. There are also MCTs which appear to be
arti"cially in#ated for competitive purposes e.g. 4 h to
connect to KLM at Heathrow (exceptions apply for
Kenya Airways and Air Malta but what about someone
who wants to #y Rome}Heathrow}Eindhoven on
Alitalia/KLM?).
The implications of airline alliances for slot availability
at airports with shortages of runway capacity are somewhat mixed. A few large alliance groups e!ectively control the majority of the slots at congested locations such
as London Heathrow (Table 7). This o!ers smaller operators at that airport within an alliance, a level of #exibility to exchange slots between their services that was
previously only enjoyed by the dominant local carrier.
For example, slots could be swapped from a loss-making
regional European service to a partner's more lucrative
!British Midland is associated most closely with Star alliance carriers
in 1999 but does also have commercial arrangements with other airline
groups.
Oneworld has more than 46% of slots and Star 23%.
Source: BAA Airports Tra$c Statistics.
long-haul route. There are reported instances of airlines
&lending' or &leasing' slots to their alliance partners in
order to optimise services or reduce costs. It is unlikely
that the partner carrier would have been able to obtain
these slots in its own right. However, in the event of
circumstances changing, control of these slots reverts to
their original owners. A potential problem has arisen
with British Airways' take-over of the regional airline
CityFlyer Express at London Gatwick where regulatory
authorities are demanding a cap on the combined slot
holding of BA and its franchise partners not only on an
overall basis but in each hour (Jasper, 1999) thus undermining the organisation of any hubbing activity at that
airport. The European Commission has been focusing on
slot issues in its rulings on international alliances (Gill,
1998) which ultimately deterred a more formal link between American and British Airways. Castles (1997) in
his discussion of slot allocation mechanisms notes that
a key consideration is that alliances and global carriers
need to exploit their networks to compete e!ectively.
There tends to be something of a trade-o! between
choosing an alliance partner with a hub o!ering high
demand (e.g. London Heathrow, Paris CDG) but where
slot availability and terminal facilities may not be optimal and one with lower demand (e.g. Amsterdam,
Vienna) but better facilities and services. An example of
this is the "nding of Reynolds-Feighan and Button (1999)
that there is a strong correlation between tra$c levels
and overall delay at European airports.
7. A comparison of alliance services on selected
North Atlantic markets
In order to obtain a snapshot of how the di!erent
alliance groupings (constituted as in 1999) interlink their
82
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
Table 8
Alliance service in three Europe}US markets!
Market
Berlin}Portland Edinburgh}
(Oregon)
New Orleans
Lyon}
Indianapolis
Airline Grouping
Star
Oneworld
KLM/Northwest
Atlantic
Excellence"
Air France/Delta"
Continental
& Partners"
Freq
6
2
2
2
Fastest
15 : 50
17 : 55
18 : 21
19 : 10
Freq
3
3
3
2
Fastest
15 : 38
14 : 13
14 : 51
16 : 05
Freq
3
1
2
3
Fastest
13 : 00
14 : 36
14 : 45
14 : 10
2
1
19 : 46
19 : 27
2
2
16 : 05
15 : 31
3
3
15 : 08
14 : 56
!Freq: Distinct combinations of services available on Thursday 8th
July 1999.
Fastest: Total journey time of fastest service available on Thursday
8th July 1999 in hours and minutes.
Source: Analysis of all combinations of sector schedules for Thursday
8th July 1999.
"Some individual #ights are included under more than one of these
groupings.
networks in practice, three Europe}USA city pairs without transatlantic service from either end-point have been
studied in more detail. The North Atlantic generally
enjoys the most developed range of alliance partnerships
and hubs at the present time.
The three markets chosen were Berlin}Portland
(Oregon), Lyon}Indianapolis and Edinburgh}New Orleans. These all involve a double change of aircraft and
hence give the main alliance groups a similar opportunity
to compete for the tra$c. The fastest end-to-end journey
using each combination of partners has been identi"ed
and also the number of distinct frequencies (i.e. excluding
any services which are caught up or overtaken by other
combinations of #ights from the same alliance). The
results are summarised in Table 8.
It is interesting to note that all the alliances can generally o!er one competitive service per day but the di!erence comes in the frequencies. The Star Alliance with its
multiple European hubs, high level of hub-to-hub frequencies and co-ordinated schedules gains a signi"cant
advantage in this respect. The other groupings su!er
from lower levels of transatlantic service (e.g. Atlantic
Excellence) or poor schedules and split of #ights between
airports (e.g. oneworld). This re#ects the "ndings of
ter Kuile (1997) on e!ectiveness of the di!erent North
Atlantic alliances. Rivera et al. (1997) consider that in
Europe, airlines are currently at three di!erent levels of
network management sophistication.
Although there are numerous places where the partners in the larger alliances link up, connections over these
points (e.g. Berlin}Paris CDG}Chicago}Portland for
Star) are almost always inferior to those via the obvious
connect hubs (e.g. Berlin}Frankfurt}Chicago}Portland).
There is also still something of a national bias in Europe
with the major carriers generally o!ering a better feeder
service from their home market than from other European markets and smaller towns and cities are often
entirely dependent on a single link to the national hub
(Graham, 1997).
8. Aircraft utilisation and inter-working of routes
Hub networks have historically been viewed as reducing airline costs compared to more dispersed linear networks. For example, a 0.11% fall in unit costs was
identi"ed for each 1% increase in hub concentration
(McShan and Windle, 1989). There are, however, two
principal cost impacts from adopting a hubbing strategy
with a concentration of activity into waves at the hub
airport. One is related to the deterioration in aircraft
utilisation that can result from constraining #ights to "t
within a limited number of designated waves at the hub.
The second is the demands this places on airport infrastructure (runways, terminals, ground handling, etc.)
to meet the arti"cially created peak requirements
rather than catering for a more even spread of services
across the day. These issues are discussed and modelled
in some detail by Bootsma (1997) who produces an
optimal solution for KLM's single hub network based on
Amsterdam.
The multiple hub options created by alliances add
another dimension in helping to overcome the aircraft
utilisation problem. Whereas with a single hub there will
be some routes that mis"t the wave cycle, in an alliance
situation these aircraft can work through to an alternative hub rather than sitting idle on the ground at the
out-station.
The US major carriers, with their networks of multiple
hubs, have taken advantage of this for many years and it
is one reason why they enjoy much higher aircraft utilisation than their European counterparts. For example,
Fig. 2 shows how Delta has #ights scheduled away from
Atlanta in the 1145 wave which proceed by di!erent
routes to arrive at Dallas/Fort Worth in the 1450 wave.
The advantage is that the distances and hence journey
times will be similar via a wide variety of intermediate
points (both near to Atlanta and far from Atlanta). This
Fig. 2. Inter-working of services between hubs.
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
overcomes the problem of di!ering sector lengths. In the
rest of the world, most carriers have been constrained by
having only one hub and hence no option but to work
simple out and back sectors. Even where several bases in
the home country exist the temptation has been to keep
the #eets and crews separate (e.g. BA at Manchester,
Birmingham, Heathrow, Gatwick). Lufthansa has taken
advantage of complementary peak activity times at
Frankfurt (waves centred on 0830, 1230, 1630, 2030) and
Munich (waves centred on 1030, 1430, 1830) to increase
the return time slots available, although this takes advantage more of the proximity of Frankfurt and Munich
rather than their separation. An alliance should be able
to take advantage of inter-working between hubs that are
geographically separated. For example, KLM and
Alitalia aircraft could operate Amsterdam}Paris}Milan
or Amsterdam}Venice}Milan in about the same time. In
contrast, Amsterdam}Paris (1 h 10 min) and Amsterdam}Venice (1 h 50 min) are di$cult to schedule optimally on the single hub model. This raises a number of
issues in terms of labour agreements, regulatory approval
for wet leasing of capacity and decisions regarding
branding of the product, which perhaps explains why it is
unusual at the present time. However, it would appear to
o!er scope for development in the future, especially as
partners tend to standardise the aircraft in their #eets.
With long-haul aircraft there are also lengthy turnarounds resulting from time window constraints where
the expensive equipment could be put to productive use
on partners' short- or medium-haul routes. British Airways had a plan to use a Qantas aircraft in this way at
London Heathrow but it failed to obtain regulatory
approval and Qantas was forced to turn to the charter
market instead (Sheppard, 1998).
Another way in which partners can help reduce costs is
by eliminating the need for expensive night-stopping of
aircraft and crews. This is particularly relevant with hub
operations where it is necessary to stable away from the
hub overnight in order to maximise the number of connection waves (otherwise one will be broken overnight at
the hub). For example, KLM used to stable one of its
own aircraft at Stavanger in Norway but following the
formation of an alliance with Braathens of Norway this
service is now operated by Braathens on similar timings
with KLM codes. Although Braathens' cost levels may
not otherwise be much di!erent from KLM's, alliances
also o!er the opportunity to transfer services to lower
cost partner airlines (e.g. British Midland has taken over
routes for SAS and Lufthansa), although this can lead to
imbalances in bene"ts between the di!erent members.
Most long-haul hub-to-hub services continue to be jointly #own, even where one partner is clearly lower cost
than the other. Greater cultural and organisational integration between alliance members may be necessary in
order to optimise the combined operations (Brewer and
Hooper, 1998).
83
9. Geographical and schedule complementarity
Although hubs in di!erent continents are unlikely to
have much overlap, this is not the case where an alliance
contains several di!erent hubs in the same geographical
region. The key here is to ensure that the hubs complement rather than compete with each other and so o!er
bene"ts for both the airline and the consumer (Oum and
Park, 1997). This can be achieved in terms of either &time'
(i.e. schedule) or &space' (i.e. geography). Schedule
complementarity may see one hub o!ering a morning
connection in a given market while the partner's hub
provides an evening connection. Geographical complementarity might involve one hub specialising in
Northern Europe, one in Southern Europe or one hub
specialising in north}south #ows, one in east}west
#ows.
Of the US airline mergers in the 1980s, that between
USAir and Piedmont can be viewed as less satisfactory
than others such as Delta}Western or Northwest}Republic.
Whereas USAir and Piedmont competed over much of
the eastern US they did so through di!erent hubs
which did not provide much synergy to the combined
network. In contrast, Western "lled a clear geographical
gap in Delta's coverage and Northwest/Republic, although local competitors, were at least in the same hubs
at Detroit and Minneapolis which enabled duplication to
be eliminated and resources redeployed to add new
destinations and expand these hubs into impregnable
&fortresses'.
An example of schedule duplication between partners
from the Quali#yer alliance sees Austrian operate from
Vienna to Kiev at 1035 h each day while Swissair has
a daily #ight from Zurich, also at 1035 h. This means that
very similar connections are o!ered from the main cities
in Western Europe (for example, the passenger from
Milan has a choice of either routing, leaving 10 min
apart). It would appear better for one of the airlines to
o!er an afternoon #ight so that the combined service
would be more competitive. An example of good practice
from the same alliance sees Swissair and Sabena each #y
four times per week to Lagos, Nigeria from Europe. By
choosing di!erent days of the week, in combination they
can provide a daily service from European points (with
two #ights on Monday). This is a major marketing advantage and should enable them to compete e!ectively
against the rivals in this market.
The optimal location of a single hub is quite sensitive
to geography and patterns of demand, with a location in
the Brussels}Paris area minimising total travel distances
in Europe (Dennis, 1994b) and Heathrow or Brussels
expected to maximise pro"tability (Berechman and de
Wit, 1996). However, this is not quite the case with
multiple hubs. Instead, a wide range of combinations can
provide a very similar outcome. A study of possible pairs
of European Union (EU) hubs (Dennis, 1994b), showed
84
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
Table 9
Network coverage of European alliances: European points served by relevant alliance partners three times per day or more from three major hubs of
each alliance!
Hub 1
Amsterdam
Frankfurt
Zurich
London Heathrow
Paris CDG
Hub 2
69
53
50
31
49
Milan Malpensa
Munich
Brussels
Madrid
Paris Orly
Hub 3
30
42
41
29
24
Rome Fiumicino
Copenhagen
Vienna
London Gatwick
Lyon
Total
26
36
28
28
20
86
79
75
65
64
!Total is overall number of European points served from one or more of the three hubs of each alliance.
Source: Compiled from OAG Flight Guide, March 1999.
that 20 pairings gave results within 3% of the total travel
distance (weighted by demand) for a European network.
In addition to North-South combinations such as Brussels}Barcelona and London}Milan, this also included
East}West pairings such as Frankfurt}Paris. This means
that not only is there potentially a level playing "eld
between the di!erent alliances but also there is the scope
for swapping partners without diminishing the overall
e!ectiveness. This may help explain the transitory nature
of many of the alliances which have been formed to date
(Flint, 1999).
Table 9 has been compiled to provide a measure of the
complementarity within the major European alliances.
This takes the number of European points served by the
hub airline from the speci"ed hub airport at least three
times per day and aggregates them with the other two
major hubs in that alliance to see to how many points the
alliance provides a serious service in this region. Three
times per day was chosen as the minimum frequency
necessary to o!er a full range of connections across the
day in each direction. This does not attempt to judge how
fast the connections are or whether the most important
cities are included. It does not include further hubs
that may exist (e.g. Stockholm Arlanda for SAS)
which would potentially raise the "gure. The results
show that Amsterdam with its 69 European links
keeps the KLM/Alitalia group in front with 86 points in
total. Lufthansa/SAS are second with 79. Swissair/Sabena/Austrian have more overlap than the others * although this may still be e$cient in terms of building up
critical mass at the destination points. BA/Iberia have the
least overlap but the poorest frequencies from their main
hubs. Gatwick now serves a distinctly di!erent set of
European markets to Heathrow. Air France on its own
has a competitive level of coverage, although the
numerous domestic points that are still served only from
Paris Orly do not link very e!ectively to international
destinations.
The generally substantial overlap in coverage between
hubs suggests that there are some marketing and handling economies to be gained in the medium and larger
European spoke cities from alliance development. For
links to small regional airports, however, the traditional
national hubs tend to hold sway. These results raise the
question as to how far the existing alliances are optimised
in terms of their geographical coverage. The restrictions
on tra$c rights to non-EU points mean that Europe's
national airlines still function as largely self-contained
entities (de Wit, 1995).
10. Conclusions
The laws of network economics, mathematics and geography mean the advantages of hubs are here to stay
and will take on an added dimension through linking
together airlines within a family to help realise the potential of an alliance.
One of the best defences for the major carriers against
competition from low-cost new entrants is to maximise
the potential of their network. Carriers without strong
local demand will also increasingly need to look beyond
their home country for additional sources of tra$c.
Alliances can help achieve both.
An e$cient wave pattern is essential to minimise connection times and o!er a consistent service in the greatest
number of markets. Careful planning can identify an
optimal hub model to meet the needs of both local and
connecting tra$c while observing constraints on aircraft
utilisation and airport capacity. Increasingly, schedule
planning will have to be integrated across a whole alliance group if a truly seamless product is to result. The
regulatory framework may continue to obstruct this in
certain parts of the world but the goals are nevertheless
clearly de"ned.
As capacity becomes exhausted at many major airports and a stable pattern of alliances starts to emerge,
the ability to change or develop hubbing strategies is
likely to diminish as we move into the future. The decisions being taken at the current time are therefore likely
to be critical in determining the future shape of the
world's airline industry.
N. Dennis / Journal of Air Transport Management 6 (2000) 75}85
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