Multi-airport Systems
5.3 Difficulties in Developing Multi-airport Systems
occurs. For example, traffic at Washington/Dulles only grew significantly once United Air-lines located a transfer hub there. This action completely changed the market for local cus-tomers.
Exceptionally, a secondary airport may have about the same level of traffic as the primary airport. This happens when a secondary airport grows and overtakes a primary air-port as occurred when Paris/de Gaulle grew past Paris/Orly and Washington/Dulles over-took the other regional airports.
Linate airport and move to major new facilities at Milan/Malpensa. Thailand faced similar issues when it opened Bangkok/Suvarnabhumi and tried to close Bangkok/Don Muang. To avoid such problems, it is useful to learn from the examples of the past, discussed as fol-lows.
Insufficient Traffic at New Airport
Planners have often mistakenly assumed that new airports would collect traffic from their
“catchment areas.” A catchment area for a facility includes all the places that have easi-er access to it, in teasi-erms time, distance, and expense, than to its competition. This concept applies to the siting of facilities for industries selling undifferentiated products where cost considerations dominate (e.g., the shipment of bauxite ore to aluminum smelters) (Weber, 1929). This approach is not suitable for airport planning, however, as the following ex-amples demonstrate and the theory inSec. 5.4explains.
Thus, the Port of New York Authority in the early 1970s created three large passenger terminals at New York/Newark in the state of New Jersey.5An important part of the plan-ners’ reasoning was that, because this facility would be much more convenient to New Jersey residents and businesses, it would therefore attract about a third of the metropolit-an traffic. Indeed, by going to New York/Newark the travelers from New Jersey avoid the congested crossings of the Hudson River, Manhattan, and the East River to get to the other two regional airports (New York/LaGuardia and New York/Kennedy). However, for a long time many passengers—and airlines—avoided New York/Newark airport. Travelers would drive by and continue on to New York/LaGuardia, for example. Airlines did not increase their flights or service to make use of the new capacity at New York/Newark, since the traffic was not there. The result was that for over a decade the Port Authority had to board up and close one of their three new passenger buildings. Lack of understanding caused a very large and embarrassing mistake.
Similarly, the British Airports Authority6built London/Stansted airport to the northeast of London, with the idea that it would serve that “catchment area” and relieve the pressure on London/Heathrow and London/Gatwick to the west and south of London. They created capacity for between 10 and 15 million annual passengers. However, London/Stansted served fewer than 5 million annual passengers for most of its first decade. Half its capacity, one of its two midfield concourses, was unneeded during this time. Nearby travelers would systematically bypass London/Stansted to catch flights from the other London airports be-cause airlines provided service at those airports rather than at London/Stansted. The pas-senger and airline decisions to avoid London/Stansted reinforced each other.
These examples show that the development of an airport in a multi-airport system re-quires airlines willing to serve that facility. Passengers do not simply follow the easiest path to an airport. They will not flow like drops of water, from a “catchment area” to the most accessible exit. Passengers go to an airport to catch flights to specific destinations at an
ac-ceptable price. If these services are not available at an airport, they will not go there. The problem for New York/Newark and London/Stansted was that for many years airlines did not want to provide much service to these airports.
Airline strategy can and does evolve, asSec. 5.4explains. As of 2012, a generation after the openings that left an entire passenger building vacant for decades, New York/Newark was close to the busiest airport in its region and London/Stansted was at its original capa-city. In both cases, this evolution was due to airline strategies unanticipated by the original planners.
Difficulty in Closing Old Airport
Developers of major new airports often assume that they will be able to close the older con-venient airport and avoid having two airports active simultaneously. This is possible—with both luck and careful planning. Denver closed the convenient Stapleton airport when it opened Denver/International, and Greece turned its close-in Athens airport into an Olympic site. However, it often happens that economic and political pressures intervene to keep the convenient older airport open, despite assurances made by authorities in the original plan-ning process, some 5 to 10 years earlier. Airport planners need to anticipate this possibility.
The case of Osaka illustrates this point. The government built Osaka/Kansai on a man-made island far from the center of Osaka and affordable housing. Its original plan was to close the older Osaka/Itami airport that was congested, in the middle of an urban area, and distributed considerable noise and dirt over its neighbors. However, the old airport is also much more convenient, for both its passengers and workers. Their political pressures kept Osaka/Itami open and it is still one of the busiest airports in the world. This has been costly for the new Osaka/Kansai airport, keeping its regular traffic and the landing charges high (it has been about $7000 per operation!). Also, because the runways at the two airports are almost at right angles to each other, their simultaneous operation complicates flight paths.
Appropriate contingency planning might have avoided these difficulties.
This kind of difficulty is not unique. At Edmonton for example, the government built a new airport for long-distance service associated with the city. However, passengers con-tinued to use the downtown airport for long-distance trips for years after the new airport opened. Until this closed to airline service, travelers used the frequent shuttle to Calgary (a city about 1 hour away by air) to connect to excellent long-distance service there.
Likewise, when the operator of the Milan airports opened their major new facilities at Milan/Malpensa, it attempted to close the older Milan/Linate airport to all non-Italian car-riers. This policy would have given Alitalia a virtual monopoly on that airport, which is more convenient to downtown Milan. The competitive airlines, backed by their passengers, protested vigorously and managed to stay at Milan/Linate.
The lesson from these examples is that markets attempt to maintain operations at older, more accessible facilities. Often, they succeed despite governmental and other
commit-ments. The fact is that the authorities in charge when the new airport opens are generally not those who made commitments during its planning, about a decade earlier. Moreover, they inevitably confront new realities—for example, that the access to the new airport is inadequate because a highway or railroad is incomplete or not yet built. Good planning will recognize the likelihood that older facilities often do not close as planned. Good planners will recognize their limited ability to make passengers go where they do not want to go.
Insufficient Traffic Overall
All metropolitan areas generating more than a threshold of traffic feature a multi-airport system, as Table 5.1 indicates. As Sec. 5.2explains, these regions have enough traffic to sustain two significant airports at the same time. Conversely, regions with less than the threshold amount of traffic may have difficulty sustaining two airports.
Metropolitan regions with less than the threshold amount of traffic will be able to main-tain two airports when there are technical or political reasons that compel these airports to exist. For example, both Taipei and Buenos Aires have multi-airport systems although their current originating traffic is far below the prevailing threshold. This is because their convenient downtown airports (Taipei/Sung Shan and Buenos Aires/Aeroparque) simply cannot handle transoceanic aircraft, so that traffic must go to the alternative airport (Taipei/
Taoyuan and Buenos Aires/Ezeiza). Theoretically, the airport operators in those cities could close the older, convenient airports. However, such moves would certainly be unpopular with the airport users and difficult to sustain absent compelling reasons. Meanwhile, the split between the airports disrupts international airlines and trade. For example, the most convenient connections between the rest of the world and Mendoza and other Argentine provinces often pass through Santiago, Chile, rather than through Buenos Aires.
Metropolitan regions with less than the threshold amount of traffic and no compelling reasons to have two facilities have great difficulty sustaining both airports. Montreal is the prime example. Its convenient older airport, Montreal/Trudeau, is fully capable of handling transoceanic aircraft. The region never had enough traffic to sustain two major airports; in 2011 it only generated about 13.6 million total passengers. When the authorities developed the huge Montreal/Mirabel airport in the 1970s, they thought they could force international traffic to use it. However, many passengers avoided the inconveniently distant Montreal/
Mirabel by taking flights to Toronto and then proceeding on to Montreal/Trudeau. Airlines scheduled flights to serve this alternative pattern, offering fewer flights to Montreal/Mi-rabel and further weakening its position. This diversion of traffic was bad for Montreal and the operation of Montreal/Mirabel was highly uneconomical. Correspondingly, once the authorities established the Aéroports de Montreal as the commercially oriented airport operator for the region, it effectively closed Montreal/Mirabel and moved international op-erations back to Montreal/Trudeau.
This experience is a warning to airport operators seeking to establish a major second air-port before the traffic is sufficiently high, when they otherwise do not need to do so for technical reasons. For example, planners for Lisbon and Chennai should be cautious, so long as their traffic is below the current threshold of about 15 million originating passen-gers. For example, they might focus on securing a new site for an airport, without actually committing to its construction. This was the strategy Bangkok, Sydney, and Toronto adop-ted, along the lines suggested inChap. 4. In effect, they took out a “real option” to protect their future (de Neufville, 1990, 1991). Bangkok eventually exercised its option and opened Bangkok/Suvarnabhumi on land reserved some 40 years earlier. Planning for second air-ports should recognize the risks and deal with them by securing sites while deferring com-mitments until sufficient demand exists.
Impractical to Allocate Traffic
Many airport operators have tried to force passengers and traffic to move from a busy primary airport to a secondary airport with under-used capacity. Their motivation is straightforward: moving traffic from a crowded to an uncongested airport should reduce congestion and delays, make better use of the existing facilities, and perhaps avoid further capital investments. With few exceptions, these attempts have been futile.
In the United States, the national government tried unsuccessfully for years to move traffic from Washington/Reagan airport to their new Washington/Dulles airport. To that end, in 1981 the Federal Aviation Administration (FAA) designated Washington/Dulles as the international airport for the capital and limited direct flights from Washington/Reagan to airports within 1000 miles (1600 km).7 These restrictions did not succeed in forcing either passengers or airlines to move substantially to the distant Washington/Dulles. Air-lines scheduled departures from Washington/Reagan to London and Tokyo by the simple device of changing aircraft at intermediate points such as Boston or Chicago. In the early 1990s, almost 20 years after Washington/Dulles had opened, the Official Airline Guide showed more international departures to London and Tokyo from Washington/Reagan than from the supposed international airport. Additional flights went overseas from the Bal-timore/Washington International airport. As for domestic flights, the airlines and passen-gers evaded the spirit of the restrictions by scheduling flights from Washington/Reagan to San Francisco, say, via intermediate stops. Moreover, politically influential cities such as Chicago, Los Angeles, and New Orleans obtained exemptions. In the end, the government-al restrictions did not force traffic to grow at Washington/Dulles. Only when United Air-lines decided to make that airport one of its hubs in the 1990s did traffic at Washington/
Dulles grow rapidly.
The British government continuously tried to move traffic out of London/Heathrow and over to London/Gatwick. It unsuccessfully attempted to persuade travelers within Britain to shift their travel patterns, by offering $30 discounts (in terms of year 2012 dollars) in the
regulated fares. It pressured foreign countries to have their national airlines fly into the sec-ondary airport but most successfully resisted second-class assignments to the less popular airport.
Only the strongest government pressures can compel the allocation of airlines and traffic between airports. Thus, the Japanese government closed Tokyo/Haneda and Osaka/Itami to international traffic, forcing service beyond Japan to go to Tokyo/Narita or Osaka/Kan-sai. (This situation was highly inconvenient and the downtown Tokyo/Haneda airport is now again open to international traffic.) The French government largely developed Paris/
de Gaulle by compelling Air France (which it owned) to move all its operations from Paris/
Orly. This move imposed enormous costs on the airline. It had to build and operate du-plicate facilities at both airports. For most of the next 20 years, it lost substantial traffic to foreign competitors who continued to operate at Paris/Orly, which remained the primary airport and had the best connections throughout France. Only an airline with generous gov-ernment financial support could persist in the face of such long-term economic adversity.
Today’s investor owned airlines will not be able to comply with directives that go against the market forces.
The general rule is that market dynamics ultimately prevail. Government efforts to force traffic shifts between airports are impractical, except in limited circumstances. The em-phasis is on the dynamics of the market. The outcomes are often unexpected.
Volatility of Traffic at Secondary Airport
Traffic at secondary airports is typically much more volatile than at the primary airports with the most traffic. One explanation for this phenomenon is that secondary airports re-lieve the congestion at the primary airports. Their traffic grows in boom periods but falls back when traffic returns to the primary airfield during recessions. Another is that a sec-ondary airport often is a base for a startup airline. As these ventures often grow rapidly and then collapse, so does the traffic at the secondary airport. For these and other reasons, traffic at secondary airports often grows and falls rapidly. This feature makes planning dif-ficult and investments risky and potentially unprofitable.
The example of Chicago/Midway suggests the point. As of 1987, it was also the hub for Midway Airlines, a startup that chose to operate out of this secondary airport rather than compete with United Airlines at its major hub of Chicago/O’Hare. When Midway Airlines failed in 1992, traffic at Chicago/Midway dropped over 40 percent, from its high of about 3.2 million enplanements. Within the following 7 years, however, the traffic tripled to 6.2 million enplanements. These kinds of rapid changes make it difficult to create the infra-structure needed when the traffic does occur—and to pay for facilities that have become relatively empty when traffic collapses.
The experience of Chicago/Midway is not unique. Sudden spurts or drops are the com-mon experience of small secondary airports. The traffic at Boston/Manchester, for example,
grew gradually for a decade and then at over 50 percent a year for the next 2 years as a Southwest Airlines moved in. Between 1995 and 1997 Orlando/Sanford grew from 50,000 to over 1 million total passengers. On the other hand, its traffic fell by a one-third between 2009 and 2010, from 1.7 million to under 1.2 million.
Statistically, the traffic at the individual airports in a multi-airport system is much more volatile than it is for the region. Moreover, airline traffic worldwide has become more changeable due to deregulation of air transport industry, as Chap. 4 explains. These facts mean that it is more difficult to plan and manage a multi-airport system than a single air-port for a city. The traffic varies more; planning has to respond more quickly to these rapid changes, and investments are more risky and difficult to justify.
Overall Perspective
Premature ambition to create a major new airport is the cause of many of the difficulties with the development of a second airport. Airport operators worldwide have built facilities at second airports that proved to be too large for many years. They counted on being able to move traffic from the crowded primary airports to the new facilities and were not able to do so. The volatility of the traffic at second airports worsens their difficulties by complicating planning and hurting investments. The next section explains why the difficulties are inev-itable. AsSec. 5.5indicates, airport planners and operators should develop second airports flexibly and incrementally, so that they can avoid these premature, unwise investments.