European Hubs Reshape To Stabilize

By Jens Flottau
Source: Aviation Week & Space Technology

Six Air France banks at CDG are steered by a network planning group that is also in charge of KLM's Amsterdam operation. The hub is heavily geared toward short-haul-to-long-haul connections. The first morning peak, P1, mainly includes inbound long-haul and short-haul services; the late-morning departure bank, P2, is focused on North American flights; whereas the P3 peak from 1:30 p.m. includes flights to North America and Africa as well as the corresponding European feed.

Air France has split operations for long-haul and CDG-based short-haul services as well as the point-to-point flying from around France as well as Paris Orly Airport.

Iberia, currently the most troubled of the large European airlines in spite of its inclusion in International Airlines Group (IAG), has tried to retain its European feed to the extent possible and transferred it partially to lower-cost affiliate Iberia Express. Its hub-carrier peers are watching closely for lessons on battling high costs. Iberia Express's cost advantage mainly stems from its low pay scale for flight crew and higher productivity, but the airline is still tied to the broader Iberia bank structure that would make it inherently less efficient.

The strategy is apparently paying off. Even though its fleet is just a fraction of the size of the mainline carrier's, Iberia Express has managed to achieve 20% lower unit costs and remain profitable.

A few airlines have outsourced the hub feeder flying. Not many others have gone as far as outsourcing hub feeding. FlyBe Nordic, a joint venture with FlyBe, is operating Finnair's Embraer E-Jets. Lufthansa has decided to move the non-hub short-haul flying to its lower-cost subsidiary Germanwings, but wants to retain the hub feeder flights for now to ensure product consistency and appease its pilot union.

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