Friday, October 05, 2007

Feed and primary airports

So many students, journalists, and industry observers continue to regurgitate the mantras that LCCs only fly to secondary airports and FSCs use regional carriers to do the majority of their flying. So, I made these graphs for all to see. The first one shows us the growth trend of United Airline's use of regional partners in their network. Unfortunately, the database only offers this level of detail back to 2003, so it is not possible to get a longer look. However, the trend is upward. However, you can see that it's growth rate slowed considerably from 2005 and beyond. In 2007 it was approximately 10%, which is not a lot for the network as a whole, but relative to other FSCs it is double the average.

These next two slides show the average ASK flown to primary airports and by regional partners divided by the three strategic groups: FSC, LCC, and Regional. Not surprisingly the FSCs fly nearly exclusively to primary airpots, which is complemented by regional partners. LCCs, on the other hand, fly 86% of their ASKs to primary airports, which squashes the concept that only secondary airports are their destinations. Say that to JFK, SFO, CPH, or DEN. The other slide shows how much of a group's ASK is flown by regional partners. The FSCs get, on average, 5% of their ASK covered by a regional partner, while LCCs puddle around at 1%. However, that one 1% is greater than most would ever mention. A regional-feed seed has been planted among LCCs and only time will tell if it sprouts. We read about Frontier's Lynx operation (a wholly-owned rather than CPA agreement) or JetBlue's E190s. These are examples that LCCs realize that thinner, monopoly markets are of interest and that regional partners may be a tool of the future.

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