Is now the right time to talk about… airport hubs?

In this series of ‘Is now the right time…?’ articles, we have been exploring some of the most important themes in aviation today – trying to understand what makes airports so important to the future of the industry, and how they can contribute towards making air travel more sustainable.
Is now the right time to talk about airport hubs | NACO
Although gradual shifts in both sentiment towards and patterns of travel have been observed in recent years, these are now compounded by dramatic falls in passenger travel and increasing attention being placed on health and safety at airports, airport revenues and even survival. It is against this backdrop, that the subject of airport hubs finds itself once again on the agenda.

Interestingly, the relevance of airport hubs is not a new – we also touched on this concept in our last article. In fact, a number of major airports adopt this approach already, without perhaps calling themselves hubs, while others are redefining what it means to be a hub during the current crisis. But looking to the future, we could see the concept of airport hubs taken even further. Reducing unnecessary air travel, making existing airport infrastructure more efficient, enabling sustainable technologies and giving airports stronger roots in their local and global communities are all potential directions for development – all while finding ways to diversify revenue.

So, what exactly are airport hubs?

Airport hubs can be viewed at two levels – the international and the regional/mobility level.

International airport hubs are typically characterised as large airports that are located near major or capital cities and used by one or more network carrier airlines to concentrate traffic and flight operations though a ‘hub and spoke’ system. These hubs typically serve as transfer or stop-over points to get passengers to and from airports that are otherwise not connected on a non-stop basis.

Regional mobility hubs, on the other hand, can develop even in the absence of a large air-to-air transfer network. Instead, it is the so-called Origin & Destination (O&D) traffic point-to-point flights that take passengers from one airport to others directly and back again that create the right conditions to develop as a regional mobility hub. Here, the majority of the passengers arrive and leave from these types of airport via ground-transportation. This is in contrast to the transfer and stop-over hubs mentioned above where a large proportion of passengers arrive and depart by aircraft and never hit the road outside of the terminal.

Due to the concentration of this ground-transportation in distinctive peaks (in line with departing and arriving air-traffic), the supporting ground transportation infrastructure is essentially over-dimensioned for off-peak periods. What this means however, is that the wider region benefits from additional transportation capacity that can provide enhanced connectivity between different localities via the infrastructure concentrated around the airport.

Once these airports are able to handle more than 20 million annual O&D passengers, it becomes imperative and financially feasible to develop public mass transit infrastructure such as [metro]rail, to avoid private car infrastructure growing to such proportions that it would potentially block space for more valuable development opportunities in and around the airport. These new public transport facilities too can be made available for use by the wider region, making the airport a truly regional mobility hub for ground transportation.

In the US, the realisation is gradually dawning that modes of arrival at and departure from airports can no longer be dominated exclusively by the car. JFK airport for example, which JetBlue uses as its hub with 175 daily departures to 65 destinations throughout the U.S., Caribbean, and Latin America, is enhancing its role as a regional mobility hub with a brand new Ground Transportation Centre. The Centre will strengthen the airport’s links to the surrounding local region via a range of modalities including expanded mass transit rail, buses ride-hailing services and e-charging options.

The impact that flying has on the environment has become increasingly apparent in recent years in line with growing knowledge of the threat of climate change. So, when viewed from this perspective, hubs might just offer a way to curb unnecessary air travel, while replacing it (or complementing remaining air travel) with more sustainable transport options.

The need for hubs

When considering the need for hubs, it is useful to explore how the concept of hubs has developed over time. As a society, we have long gravitated towards hubs of one kind or another – many of our biggest cities began as trading hubs which in turn brought both commerce and people! Airport hubs continue this lineage to the present day, creating jobs and routes for trade, serving as gateways for global and regional passengers, and creating revenue through commerce.

Airport hubs have also made air travel more economically viable. As mentioned earlier, from an airline perspective, international hubs allow for the servicing of more destinations than would previously have been possible. The growth of regional airports too has seen airlines expand operations to accommodate more flights from regional hubs. This all trickles down to the customer who has the benefit of more options to choose from as well as more competitive flight prices.

Together with the increasing economic viability of air travel (partly enabled by hubs), there has been growth in both low-cost carriers and network carriers which, until the current crisis, had been meeting the increase in passenger numbers with more and more long-haul point-to-point flights (enabled thanks to ever-improving aircraft technology).

While long-haul flights may seem more environmentally friendly – why take two planes when one will do, right? – the environmental trade-off is not as obvious as first thought. For example, on long-haul flights, planes are bigger and passengers have more space. That means that each passenger and crew member accounts for more of the plane’s pollution. Here, the need for indirect stop-over travel provided by international hubs in particular, not only becomes more obvious but may also provide a more sustainable solution – by bringing people from varying points of origin to the same destination via transfer, instead of via multiple long-haul flights. But provisioning more short-haul flights isn’t always the optimal answer for domestic travel since more emissions are produced as planes take off as opposed to when they’re cruising; also domestic flights often spend relatively little time cruising.

So, while more shorter flights may better offset a long-haul flight; domestic travel requires a different answer – and one which hubs can provide.

Striking the right balance…

This is the point at which we begin to see why a balance needs to be struck for and between hubs, airlines and the industry at large to find more sustainable approaches. But equally important is the balance that needs to be struck between use and need; a fact that has become gradually apparent through the impact that COVID-19 has had on the aviation industry. While government guidelines enforcing social distancing in many parts of the world have caused airports to reconsider their use of space; the economic impacts of the pandemic, which saw a sharp decline in passenger numbers should prompt airports to consider additional ways to diversify their revenue streams.

During the pandemic, trade and logistics have proven to be amongst the few revenue streams that didn’t dry up; hubs offer an opportunity to capitalise on this. The location of international and regional/mobility hubs makes them ideal for trade and logistics partners seeking gateway destinations for warehouse, processing and even office facilities.

…to reap the benefits

Ultimately, getting this overall balance right is not only vital to delivering more sustainable hubs and a more sustainable aviation industry, but also to reaping the subsequent rewards. This means understanding the need for short-haul/long-haul travel, where it’s necessary and suitable, and in parallel trying to move away from using air travel unnecessarily. This is particularly the case with domestic travel which could benefit from journeys being broken up and access to more environmentally sustainable public transport options – all made available through airport hubs.

In the Netherlands, there is already a collaboration between Schiphol and the country’s train operator to promote such alternatives. An important success factor here, is that the train station is located at the hub. In the distant future, airport hubs could also facilitate hydrogen- or SAF*-powered long-haul flights fed by electrified short-haul flights.

Another of the few sectors to have weathered – and indeed prospered through – the COVID-19 crisis has been e-commerce; Amazon being a prime example. There is no doubt that this has been aided by the utilisation of hubs around the world which have allowed them to maintain speed of service and delivery throughout lockdowns and other restrictions.

For airports and their potential stakeholders, these types of “successes” require increased collaboration and cooperation – keeping in mind that balance is a delicate game. If hubs are not created, or developed in the right way, they run the risk of becoming inefficient. This can lead to a customer experience that is too heavily weighted towards either the cargo or passenger side. But, if the right approach is taken – i.e., one that is collaborative and brings together different stakeholders and modalities of travel – then there are significant benefits to be had.

The future hub

From the average, everyday passenger journey perspective, the concept of airport hubs right now is not particularly visible. At least not beyond the idea of certain airports being connecting/gateway airports. In the future however, hubs could become a one-stop-shop for travellers where a passenger ticket covers not just the flight, but also a train, bus ride or even the use of e-bikes for city airports; all of which could be accessible from one location.

And, looking again into the distant future, airport hubs can also be nodal points for hyperloops. We can already see small signs of this in action, where passengers can catch a train to a select number of locations to and from airports – but right now the process is broken up between providers, with passengers still largely having to buy separate train or bus ticket on top of their plane ticket. The rail-to-air tickets offered by KLM through Schiphol Airport is one of the exceptions. There is a clear challenge here for airports to combine forces with other modalities to smoothen out the passenger experience.

Finally, as airports face the precariousness of their financial situation, they face a clear need to consider the relevance of diversifying revenues away from a reliance on aero-revenues alone. The prospect of bringing together different modalities in one place, opening up office space to third parties, or bringing trade and logistics into the airport envelope, could bring forward new sources of revenue that could make airports more resilient in the face of financial uncertainty.

A more collaborative, sustainable approach to travel

The efficiency of technology has allowed companies, governments and now airports, to do more with less space. This makes the creation of airport hubs an increasingly feasible option that neither require a land-grab from the airport, nor an overhaul of space – but rather a reinvention in how the current space is utilised and redeveloped.

What’s more, on the industry and trade side, the creation of airport hubs allows different parties to exchange and collaborate with greater ease given their proximity to each other – whether that’s by sharing heat, energy or technology. The creation of a modern airport hub in the form an airport city for example would also provide more opportunities for this kind of co-operation and the creation of more diverse, non-passenger revenues.

COVID-19 has all but paused normal life – and with concerns about climate change continuing to grow, the desire and need for more sustainable travel is strong. In fact, the need for solutions that maximise potential while saving on emissions and energy usage has never been more important.

So, is now the right time to talk about airport hubs?

In the face of all of this, it certainly seems as though now is as good a time as any to consider how airports can be developed not only as international, but also as regional mobility hubs; as drivers for sustainable connectivity to a domestic network of cities and to the economic growth of surrounding localities and commercial districts. The result would not only be a collaborative approach to trade and travel, but a more sustainable one at that.