Highlights of the annual Airneth conference (IV): de-hubbing, re-hubbing and Amsterdam Schiphol

One expected consequence of any futher consolidation in the airline industry is that some airports are going to experience de-hubbing. This is actually one of the worst things that can happen to an airport (from a business point of view, of course).

Renato Redondi, from the University of Brescia (Italy), presented some very interesting results from his investigation in the area of de-hubbing and re-hubbing, something that airports with hub aspirations should take note of (thinking about Barcelona airport here!): only three cases of re-hubbing were identified by the research (and all of three were re-hubbed by the same airline that had previously decamped, so no known cases of an airport being re-hubbed by a different airline!)

If your flag carrier de-hubs, why not add some low-cost colour to your airport?

Low cost carriers play an ambiguous role in de-hubbing processes, since their entry into a market can pressure network carriers into abandoning secondary hubs, but at the same time, once de-hubbing has happened, low cost carriers offer one of the fastest ways to recover traffic volumes!

This last point was very present in the minds of both the attendees and the speakers, since, given the conference was taking place in The Netherlands, the case of Amsterdam Schiphol, was the focus of particular attention. The importance of Schiphol for the Dutch economy is difficult to overestimate, and the fact that the flag carrier, KLM, is now part of a larger group, that keeps and even larger hub as close as Paris, makes this a very sensitive topic. There was some debate over whether the entry of more low cost carriers was a good thing for Amsterdam or it would end up putting too much pressure on the home carrier KLM.

Schiphol airport and KLM are key for the Dutch economy

The idea that more competition from low cost carriers would be beneficial over the long-run, as it would keep KLM competitive, seemed to carry the day...moreover, the KLM representative in the panel, Pieter Cornelisse, expressed a lot more concern about the strengthening of Lufthansa's hub at Frankfurt after the completion of a new parallel runway (extra capacity will allow the German airline to open new routes to the UK and Scandinavia, traditional feeder markets for KLM) and the increased capacity the Gulf carriers are deploying in their European routes.