Transformation of route networks, environmental protection and other problems of modern airports

The number of passengers passing through any of the world's 50 largest airports during the day exceeds the population of many small cities. Airports in the METR region (Middle East, Europe, Turkey, Russia) will have to solve a number of problems in the future, which are caused, among other things, by such factors as the transformation of route networks, new capacity requirements, the need to ensure profitability and issues related to environmental protection environment.

The noise of flying aircraft no longer disturbs residents of the areas adjacent to Frankfurt Airport at night - night flights are prohibited here
Photo: Safron Golikov, Kommersant / buy photo

Rene Steinhaus

A joint project of the MIR Initiative and the magazine "Vlast"

New routes in the development of airlines and airports

Over the past 20 years, route networks—a critical element of airline business—have undergone a number of dramatic changes. In the past, air traffic between a country and the world was most often carried out by the national carrier, and at airports one could see aircraft only from those countries that had bilateral air transport agreements between them. At the same time, not a single carrier was allowed to operate on other international routes. There was almost no competition on domestic flights, and if new participants appeared, they were quickly forced out through dumping. However, the liberalization of the European market has led to the fact that the world of air travel has gone through several stages of transformation, similar to those that previously occurred in the United States. Many new airlines have emerged. New business models, primarily low-cost carriers, have gained a foothold in the market. As a result of fierce competition, a number of mergers have occurred and the concentration of the airline industry has increased significantly. Today, 20 years after the start of a major transformation, the bulk of the European airline market is controlled by the three largest national airlines and their alliance partners (Lufthansa, Air France/KLM and IAG), as well as four low-cost carriers (EasyJet, Ryanair, Wizz Air and Norwegian ). Smaller carriers have found themselves caught between these two business models or have exited the market, such as Malev Hungarian Airlines, Spanair SA and Olympic Airlines. Other European airlines, such as Air Berlin, Czech Airlines and Alitalia, have managed to find reliable investors outside Europe and thus remain in the market.

Traditional airlines in Europe that have retained their business have to deal with the blow from two sides: on the one hand, low-cost airlines are actively winning their share in the market for short-haul transportation within Europe and intermediate flights, in which traditional carriers are already suffering losses; on the other hand, in the highly profitable long-haul market they face strong competition from Middle Eastern airlines, which offer attractive prices and can handle high volumes of traffic.

These changes will lead to significant changes in the world of air travel and, as a result, in airline route networks. On intra-European routes, large networks outsource part of their operations to subsidiaries of low-cost airlines; This is how they try to compete with low-cost carriers and optimize costs. For example, Lufthansa currently transfers all decentralized passenger traffic not passing through its hubs to its subsidiary Germanwings. Lufthansa also plans to further develop the Wings group of companies in Europe, which will have much in common with the classic low-cost airline model. Air France plans to transfer decentralized passenger traffic to its Transavia Airlines CV and HOP! divisions. In turn, IAG (British Airways and Iberia) plans to transform its 100% owned Vueling into an airline specializing in intra-European flights. However, low-cost carriers that are subsidiaries of traditional airlines cannot simply follow the "no frills" concept, otherwise they risk losing loyal customers for whom the service they are accustomed to is premium services: an enhanced lounge, choice of seats, expedited security clearance and loyalty programs with accumulative points.

Traditional low-fare carriers need new markets to maintain their growth momentum. Today, it is increasingly difficult to launch flights on new routes passing through secondary airports, away from major transport hubs. As a result, low-cost carriers are exploring the business travel market and are beginning to use airports that have long been used by traditional airlines. To compete successfully in these markets, low-cost airlines are introducing more and more additional services, including seat reservations and even loyalty programs. Thus, there are fewer and fewer differences between traditional and low-cost airlines. For airport management, this means that they will have to cope with the challenge of reducing costs while increasing demands on service efficiency. For traditional air carriers, one service cycle (the time between arrival, aircraft maintenance and departure) of an Airbus A320 or Boeing 737 is about 50 minutes, while for a budget company this figure is half as much, which is dictated by high efficiency requirements. Airplanes only generate revenue while they're in the air, so many airports should consider implementing procedures to optimize operations, such as boarding passengers through both doors at the front and back of the plane. It is also worth thinking about creating platforms for independent maneuvering of aircraft within the existing infrastructure. Projects for new terminals should already include such elements, and the cost of infrastructure for new terminals should be lower than now.

In the Middle East, it takes half as long to build new airports

Another challenge is that large airlines need to connect short- and long-haul services at hubs. The fact is that passengers arrive at most airports from intermediate flights, and only in a few cities, such as London and Paris, the bulk of passengers on long-haul flights are local residents. In other words, it is not so easy in one city to collect a daily number of passengers sufficient for flights operated by wide-body airliners to pay for themselves. For example, passengers on a long-haul airliner from Frankfurt often arrive in Frankfurt on 150 stopover flights. And when the liner lands, passengers are sent to their final destinations on other intermediate flights. Now imagine how difficult it is to coordinate all these passenger flows in case of delays and connecting flights.

Today, not only airlines compete with each other, but also airline-plus-airport systems. Such a system can only be competitive when the complex operational processes occurring in the hub are synchronized and work like clockwork. Passengers who miss a connecting flight and are forced to stay in a hotel instead of being at home with family will think twice about booking the same connecting flight next time. And if this happens again, you will lose these customers forever, no matter how attractive the ticket price. Close collaboration between airports and airline hubs is essential to success in the ever-growing hub market. Since 1990, the number of transit passengers at the 20 largest hub airports in Europe has quadrupled and currently amounts to about 180 million people per year. On average, their number increases by 6% annually, while the average annual growth in passenger traffic worldwide is about 4%. Twenty years ago, there weren't many options for getting from point A to point B. Today, passengers have a choice when it comes to traveling from point A to point B via point C, and they can even choose from domestic flights. airline groups. Thus, for those wishing to get to Sao Paulo from Berlin, Lufthansa offers a transfer in Frankfurt, or Munich, or Zurich. When flying with Air France-KLM, flights from Berlin to Sao Paulo are carried out with a transfer in Amsterdam or Paris. The situation is similar for thousands of other intra-European flights. Hub airports compete for passengers from the same group of airlines, each with its own route networks and aircraft fleet. Thanks to this, the entire “airline plus airport” system is highly competitive.

In the future, we can expect further expansion of the still new business model - low-cost airlines operating long-haul flights. Pioneers in this area were Air Asia X, Scoot and Norwegian. Keeping costs low on long-haul flights is extremely difficult, so passenger load factor is one of the key success factors in keeping prices down. Airlines can increase the value of this indicator in two ways: fly out of large cities or connect long-haul flights with intermediate flights of low-cost airlines. This opens up opportunities for creating a new type of hubs at hub airports in Europe, which are now connected by flights of low-cost airlines - at London Gatwick Airport, Barcelona, Berlin. Combining both methods was considered possible by Norwegian, which chose Gatwick as one of the first hubs in its long-haul network.

An airport, as a hub partner, must perform two tasks. The first is to always ensure sufficient capacity and therefore growth prospects for partner airlines, the second is to ensure the reliability and cost-effectiveness of processes designed to meet specific hub requirements. Today, European airports are finding it increasingly difficult to cope with the first challenge. The European Organization for the Safety of Air Navigation projects that by 2030, demand for air travel will exceed airport capacity by more than 10%, even if all capacity expansion projects currently under development are completed. Airport congestion is expected to increase between 2025 and 2030, while the number of passengers unable to buy air tickets due to too much demand will almost double. This problem is already quite acute; This is largely due to the fact that projects to increase the capacity of European airports take a long time. For example, 13 years passed from the moment the project to expand the runway at Frankfurt Airport was discussed until the opening of the runway. A similar project in Amsterdam lasted 18 years. Given this state of affairs, European airports cannot compete with the fast-growing transport hubs of Middle Eastern countries. In the Middle East, it takes half as long to build new airports, and this includes the time spent making and agreeing on construction decisions.

Today, not only airlines compete with each other, but also airline plus airport systems.

Against the backdrop of insufficient capacity at European airports, the importance of such a competitive factor as multimodal transportation will increase. When some European airports experience congestion, other airports will be able to profitably receive passengers if passenger traffic is redirected to the railways. With the advent of high-speed trains, travel times on routes in Europe have been reduced to one to four hours. On routes covered by high-speed trains in less than two hours, air service was canceled, and where it remained, flights became much more infrequent. Rail carriers currently compete heavily with airlines on routes where travel times range from two to four hours. Airports with rail connections are participants in a huge intermodal transport network and have a serious advantage over their competitors. Deutsche Bahn (German Railways) cooperates with a large number of airlines and, as part of the Rail&Fly service, connects flights to more than 5,600 railway stations in Germany. Participation in such affiliate programs allows airlines to load flights without the need for intermediate flights operated by competing airlines. The effect of this strategy can be assessed in the following example: the Frankfurt Airport railway station, where long-distance trains arrive, receives 23 thousand passengers per day and about 5.6 million passengers per year, which exceeds the passenger traffic of many airports.

For airports that are not connected by rail, new opportunities will be opened by the emergence of new types of aircraft that may enter the market in the next few years. The lower cost per passenger kilometer for new aircraft will allow airlines to compete in a flight market characterized by relatively low numbers of tickets sold. Thus, airlines will be able to operate direct flights between airports with low passenger traffic. For example, the new Bombardier C Series aircraft will be able to operate direct flights from Europe to North America with just one hundred passengers on board.

Those airports in the METR region that will be most successful in the future will be those whose management is able to identify promising markets and partner with airlines to offer unique services in specific markets.

Ensuring profitability

Airport operational challenges currently include shrinking EBIT margins across the core business of air transportation and ground handling. Therefore, airports must develop non-aeronautical commerce. For large airports, non-airline business accounts for about 40% of revenue, but generates about 80% of EBIT. For many airports I have seen, there is enormous potential in optimizing their non-airline business. The main profit drivers in non-aeronautical commerce are retail (mainly duty free), car parking, food and beverage sales, advertising, real estate and services. Let's look at retail: Many business travelers don't have time to shop in the cities they visit. The airport essentially becomes the only place for them to buy gifts or get information about new products. They have a few minutes to shop between going through security and boarding. For those who make tourist trips, the long-awaited vacation begins with a visit to restaurants and shops at the airport. Tourists are waiting for entertainment. And for airports this is a chance to increase revenue. It is important that passengers do not experience stress and have enough time to make their purchases in peace. To do this, it is necessary to optimize check-in and passport control procedures, ensure convenient location of facilities inside the terminal (for example, security checkpoints) and place information boards on which passengers can obtain information about their flights and an idea of the distance to the boarding gate. Some international retail chains specialize in setting up retail outlets at airports, which allows them to optimize revenue. Many airports act as shopping centers, renting out small areas to retailers and restaurants. It is very important to stand out from other airports that offer their brands and promote their products and offers, as passengers always have the choice of purchasing goods at your airport or at the other end of the air bridge. Airports are constantly developing their service delivery capabilities. They offer infrastructure to airlines, retailers, online service providers and other companies to ensure a fully integrated and seamless passenger experience. New technologies and data processing methods open up opportunities for new types of services and new experiences for passengers. Tracking, navigation and identification using mobile communications make it possible to tailor the range of services to the needs of each individual passenger. For example, you found a new electronic device in the flagship store of an online retail chain at the airport after going through security. You purchase this device and upon your return it is waiting for you in the trunk of your car parked in the airport parking lot. The car is, of course, cleaned and serviced, as always when you leave it at the airport in the area with automatic parking reservation. The payment amount is debited from your bank account at the end of the month. Selecting the right technologies and developing partnerships is a challenge for airports when it comes to non-airline businesses.

The impact of airports on the environment

Air transportation is an integral part of modern life, and no one is ready to refuse them. However, there is a serious problem that limits the competitiveness of airports in Europe and is related to living conditions in settlements adjacent to airports. While hubs around the world work around the clock, Frankfurt had to agree to a strict ban on night flights in exchange for the opening of a new runway. After 11 o’clock in the evening, life at one of the largest airports in the world stops. The aviation industry demonstrates great progress on the path to reducing harmful emissions into the atmosphere and noise level. Each new generation of aircraft consumes 15% less fuel than their predecessors. Reducing the noise level is also a very important task for airports. According to manufacturers' statements, changes that will be made to the design of the new generation regional and narrow -body aircraft will reduce the effect of air noise to 75%. However, another very significant step in the field of reducing the noise level and the volume of harmful emissions is prepared without high -profile statements. Currently, tests of systems are being carried out that will allow aircraft to display along the steering wheel to runways using electricity. This can be done in two ways - by means of an electric motor mounted on board the aircraft, or using tractors on remote control. The engines do not start until the aircraft is brought directly to the runway. The results of this innovation will be significant. Airports also provide optimal conditions for parking and charging of ground service vehicles and clearly calculate the distances of their following. There are already many models of such vehicles up to huge passenger buses. They can be charged with their own solar power plants. Some airports have already installed solar photocells on lawns. A significant part of the energy is used for climatic control on terminals and for illuminating sites and runways. New terminals are developed as energetically passive objects using underground heat sources or solar energy. The windows are made of special materials that pass sunlight inside, but as necessary, they can produce heat outward in order to prevent overheating. As in residential facilities, the use of LEDs radically improves light quality and reduces electricity consumption. Another extremely important task for airports is the use of environmentally friendly fuel. It is necessary to test and implement new logistics procedures and standards of activity.

The modern airport should become a sensitive and flexible organism that quickly responds to the situation living in constant contact with airlines and passengers and most effectively introduce advanced technologies. The task is not easy, but there is no other way.

Rene Steinhaus

born in 1972 in the German Democratic Republic. He studied at the aviation department of the Berlin Technical University. For ten years he worked for Fraport AG, which operates a number of airports in the METR region, primarily in Frankfurt am Main. Under his leadership, the company expanded its airport network and also began commercial flight services for the largest passenger airliner, the Airbus A380. Today, Renee Steinhaus heads the aviation and airport practice of the consulting company AT Kearney.

AT Kearney is an international consulting company that has existed since 1926 and has 50 offices in 35 countries. The company's clients include the world's largest airports and airlines.

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