DISP 154 37
Guillaume Burghouwt, Menno Huys
Deregulation and the Consequences for
Airport Planning in Europe
The regulatory situation in European avi-
ation has changed dramatically in the
last fifteen years. One of the major ele-
ments of the change has been the dereg-
ulation of the European aviation market.
With deregulation, the bilateral regula-
tion of air services and IATA tariff regula-
tion was gradually replaced by a regula-
tory regime of limited competition. As a
consequence, airlines have developed
new network strategies. Airport planners
have to think differently about the plan-
ning and development of airport site ca-
pacity.
This article addresses two main issues.
First, the change in European aviation
and the consequences for airline network
behaviour. We will look at the new net-
work strategies of European airlines such
as hub-and-spoke networks and global
strategic alliances. Second, the article de-
scribes the new context in which airport
planners operate. It discusses some con-
temporary forms of airport planning such
as the commercialisation of the airport
product, new airport layout requirements
and the case for flexible planning.
1 History
1.1 Bilateral Regulation
From the Second World War on, the
trinity of the national government, the
national carrier and the national airport
characterised European aviation. Indi-
vidual nations negotiated the air serv-
ices between two countries on a bilat-
eral basis: the bilateral air service
agreements (ASAs) (Doganis 1991;
Zacher and Sutton 1996). Governments
reached agreement on the number of
gateways (airports) accessible to each
carrier of each nation, the frequency on
routes between the two countries, the
designated carriers operating the routes
between the two countries and the divi-
2003
sion of seat capacity between the desig-
nated carriers (mostly on a 50/50 ba-
sis). In most cases, the designated carri-
ers were the two national airlines or
“flag carriers” of each country. Tariffs in
ASAs were generally derived from deci-
sions of the International Air Transport
Association (IATA), the organisation of
international airlines, founded in 1945.
However, the bilateral system only ap-
plied to scheduled traffic. Charter oper-
ations were exempted from the system
and were relatively free of restrictions
(Doganis 1991).
During the bilateral period, the Euro-
pean air transport market was heavily
centred around the national airlines and
their respective national airports. Every
European nation had its own national
airline (e.g., KLM, British Airways, Air
France). The network maps created by
these agreements covered the world
with various overlapping star-shaped
configurations. There was little room
for competition since virtually no entry
was possible for new scheduled air-
lines. Besides, ticket prices followed the
IATA conferences. Moreover, the air-
lines were more or less the offspring of
the governments. Most flag carriers
were (partially) owned by their govern-
ments and heavily subsidised. The lack
of competition resulted in high-ticket
prices for scheduled flights. Airlines had
little incentive to reduce costs or im-
prove efficiency.
1.2 Limited Competition
During the eighties, the positive experi-
ences with airline deregulation in the
United States, a lobby of airlines and
consumers in favour of deregulation,
new economic theories and the Euro-
pean unification process opened the
door for deregulation and unification of
the European aviation market [1].
In 1987, the European Council adopt-
ed the first “package” of deregulation
measures, which was the first step to-
wards the creation of a single European
aviation market without any significant
regulatory restrictions on competition
between European airlines. By imple-
menting a second and a third package
in 1990 and 1993 respectively, the EU
aviation market was further deregu-
lated. The process was completed in
1997. Every package reduced the regu-
latory restrictions and widened the op-
portunities for airlines to set air fares
and choose frequency and capacity
and entry and exit routes (Button et al.
1998). In 2000, the fifteen member
states of the European Union, Norway
and Iceland were part of a single
European aviation market (Doganis
2001:42). In 2002, Switzerland also
entered the arena. This gradual replace-
ment of the bilateral regulation of air
services and IATA tariff regulation
brought in a period of limited competi-
tion.
The new phase of competition is lim-
ited because some regulatory barriers
remain. The European Union has the
right to intervene when the market is
structurally out of balance, in the case of
a sustained downward development of
fares and in support of necessary but
unviable routes to peripheral areas
(public service obligation). Moreover,
the multilateral deregulation of the EU
aviation market only applies to the air
services within the EU. For their inter-
continental air services, European air-
lines still depend on the bilateral air
service agreements of the governments
of the respective country of registration.
Therefore, carriers without a designa-
tion in the bilateral treaties cannot set
up an intercontinental network.
Due to these changes in the aviation
industry, the major European airlines
have adopted new network strategies to
cope with the intensified competition.
The adoption of hub-and-spoke net-
works, the formation of global strategic
alliances and the low-cost concept are
the most important of these new strate-
gies. Deregulation and the changing
airline network pattern have signifi-
cantly affected the context in which air-
port planners operate. We will first dis-
cuss the consequences for airline net-
work development and then the chang-
ing context for airport planners. Finally,
we will discuss some of the possible im-
plications for future airport planning
and development.
 DISP 154 38 2003

et al. 1998). Direct flights from medium-

sized airports to other medium-sized air-
ports were increasingly replaced by in-
direct flights via central airports or hubs
(see Figure 1). Hub-and-spoke networks
offer airlines advantages on the cost
and demand side in a highly competi-
tive market. The advantages of these
hub-and-spoke systems have been exten-
sively discussed elsewhere (see, Button
2002; Hanlon 1996; Pels 2001).
Spatial concentration and temporal
concentration are the two main features
of the hub-and-spoke network (Reynolds-
Feighan 2001). The hub carrier concen-
trates its network spatially around one
hub or a small number of hubs (see Fig-
ure 1). Reynolds-Feighan (2001) con-
cluded that most large US carriers, such
as United Airlines and Continental, did
Figure 1: Network of Western before (above)
reorganise their networks around a lim-
and after deregulation (below).
Source: Williams, 1994
ited number of central airports.
With respect to temporal concentra-
100
tion, a hub airline operates synchro-
nised, daily waves of flights through its
hubs (Reynolds-Feighan 2000). The aim
of such a “wave-system structure” is to
80
optimise the number and quality of con-
nections offered by an airline (Bootsma
1997). Many US airlines adopted or in-
60
Number of flights

tensified wave-system structures after

deregulation, such as Delta Airlines at
Atlanta Hartsfield (see Figure 2).
40

2.2 Are European Airlines

20
0
6:00 7:70
6:85
Figure 2: The heartbeat of a hub: wave-
system structure of Delta Airlines at Atlanta
Hartsfield in 1999.
Source: OAG
2 New Airline Network Strategies
2.1 Hub-and-spoke Networks:
the US Case
To understand the changing network be-
haviour of European carriers, it is useful
to consider the consequences of airline
deregulation in the United States in
1978. One of the most striking effects of
Forming Hubs?
The question arises whether European
airlines have followed the same network
9:40 11:10 12:80 14:50 16:20 17:90 19:60 21:30
strategy of implementing hub-and-spoke
8:55 10:25 11:95 13:65 15:35 17:05 18:75 20:45 networks by concentrating their route
Time of the day networks in both space and time. As we
will see, large European airlines do op-
erate hub-and-spoke networks. How-
ever, the long-term process of forming
hubs has been limited to temporal con-
centration.
deregulation on airlines was the adop- Recalling the situation of European
tion and intensification of hub-and- aviation during bilateral regulation, na-
spoke networks. Airlines wanted to take tional airlines were, in most cases, the
advantage of the opportunities of the designated airlines in the bilateral air
liberalised market and reorganised service agreements. These airlines oper-
their networks. A number of carriers re- ated from the national airports, also
organised their networks from “point- designated in the bilateral agreements.
to-point” into “hub-and-spoke” networks Hence, European airline networks were,
(Reynolds-Feighan 1998, 2000; Viscusi in contrast to their American counter-
 DISP 154 39 2003

parts, already heavily concentrated in

space before deregulation. These radial
networks were not hub-and-spoke net-
works in a strict sense since air services
were not coordinated in time through a
wave-system structure.
Even under limited competition, the Figure 4: Route network of Régional Airlines
in 1990 and 1999.
national carriers such as KLM, Air
Source: Burghouwt et al., 2003
France and Iberia are bound to these
national airports because their intercon-
tinental services are still subject to bilat- dial, hub-and-spoke system and made more airlines have adopted or intensi-
eral negotiations. KLM cannot simply use of the renovated airport of Cler- fied their wave-system structures at cen-
move its home base to another EU coun- mont-Ferrand. With its new airport lay- tral airports. KLM, for example, reor-
try without losing its portfolio of inter- out, Clermont-Ferrand allowed for very ganised its three to four wave-system
continental traffic rights. As a result, the short minimum connection times of into a more effective five wave-system.
level of network concentration for Euro- about twenty minutes during the four Lufthansa started a wave-system struc-
pean flag carriers has remained re- daily waves of incoming and outgoing ture at the newly constructed airport,
markably high and stable even after Eu- short-haul flights of Régional Airlines. Munich II, alleviating some of the ca-
ropean deregulation (see Figure 3). Major European airlines did, how- pacity problems at Frankfurt. Initially,
Only a few regional airlines reconfig- ever, reorganise their networks in a tem- Air France did not operate any wave-
ured their networks from point-to-point, poral sense. Burghouwt and De Wit system structure at Paris Charles de
criss-cross networks into radially organ- (2003) have concluded that more and Gaulle or Lyon. However, the carrier did
ised hub-and-spoke networks. Régional implement a fully effective traffic pump
Airlines is perhaps the best example of at Charles de Gaulle in March 1996
such a network reorganisation (see Fig- 30 (see Figure 5) and a more modest sys-
ure 4). Régional Airlines and its prede- tem at Lyon in the same year.
cessor Air Vendée used to operate a lin- In contrast to the US airlines, Euro-
ear network. After deregulation, the air- 20
pean airlines had entered the phase of
line reconfigured its network into a ra- spatial network concentration long be-
Number of flights

fore deregulation. In general, these star-

shaped networks were not coordinated
10
in time. Transfer opportunities at central
airports were mostly created “by acci-
0.9
dent.” With the deregulation of the EU
0.8
0 air transport market from 1988 on, a
0.7 6:00 7:80 9:60 11:40 13:20 15:00 16:80 18:60 20:40
second phase of airline network con-
Network concentration

6:90 8:70 10v50 12:30 14:10 15:90 17:70 19:50 21:30

0.6
Departures Arrivals Wave centre centration started. European airlines
0.5
concentrated their networks in time by
0.4
30
adopting or intensifying wave-system
0.3
structures in their flight schedules, trans-
0.2
forming the carriers into hub-and-spoke
0.1
airlines.
0.0 20
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Number of flights

low-cost 2.3 Global Strategic Alliances

national The airline alliance frenzy of the 1990s
regional
extra-EU 10
was another outcome of deregulation in
European aviation. From a geographi-
Note: A high network concentration index repre-
sents spatial concentration of airline traffic on a limi- cal point of view, three types of airline
ted number of hubs. Low network concentration indi- alliances can be identified. The first
ces represent a spatially deconcentrated, point-to- 0
type, the route-specific alliance, is the
6:00 7:80 9:60 11:40 13:20 15:00 16:80 18:60 20:40
point network. See for a detailed description of the
network concentration index: Burghouwt et al.,
6:90 8:70 10v50 12:30 14:10 15:90 17:70 19:50 21:30
simplest and by far the most numerous.
Departures Arrivals Wave centre
2003. The second type, the regional alliance,
Figure 3: Network concentration indices for Figure 5: Wave-system structure of Air France covers a much wider scale. The third
national, regional, low-cost and extra-Euro- at Paris CDG in 1990 (above) and 1999 (be- type is the global alliance.
pean airlines, 1990–1999 low). Global airline alliances are the most
Source: Burghouwt et al., 2003 Source: Burghouwt & De Wit, 2003 important ones in terms of network ex-

pansion and they have the most far-
reaching consequences for the airport.
The hub-and-spoke networks of two or
more large airlines that operate in geo-
graphically distinct markets, often on
different continents, are linked by their
respective hubs. This means an increase
in the scope and size of the airline net-
works, which normally means an in-
crease in passengers and freight vol-
ume. Alliances can also lead to a re-
duction of costs by producing eco-
nomies of density, size and scope and
by joint purchasing of aircraft. A third
reason for alliance building is reducing
competition, which is most effective
when the partners serve the same
routes. A final reason for forming al-
liances is to bypass the nationality rules
and other regulatory barriers that make
cross-border acquisitions and mergers
impossible for the time being (Doganis
2001; Oum et al 2001).
At present, four strategic global al-
liances can be identified, which make
up about 60 % of the world passenger-
kilometers. The Star Alliance (i.e.,
United Airlines, Lufthansa, SAS) is the
largest one, followed by the Oneworld
Alliance (i.e., American Airlines, British
Airways, Iberia), Sky Team (i.e., Air
France, Delta, Alitalia) and Wings (i.e.,
KLM, Northwest). Until recently, there
was a fifth alliance, Qualiflyer, but it
ceased to exist after the bankruptcies of
Swissair and Sabena in 2001. One
must keep in mind that alliances are
only transitional devices on the rocky
road to full mergers.
It is expected that a period of great in-
stability will occur when the nationality
rules and other constraints are relaxed
during the coming years and cross-bor-
der acquisitions and mergers become
possible. The alliance structures will
change, which affects the future traffic
volumes for airports since every alliance
has its own primary hub. These primary
hubs function as the major transfer
points between the networks of the al-
liance partners on the different conti-
nents. Nowadays, Europe has four pri-
mary hubs (Paris Charles de Gaulle,
Frankfurt, London Heathrow, Amster-
dam Schiphol), each bound to a global
alliance that is responsible for the
DISP 154
greater part of the total number of pas-
sengers. As a consequence of the con-
centration process of the transfer pas-
sengers on these hubs, their market
share in intercontinental seat capacity
rose from 44% in 1990 to more than
50 % in 1999. (Burghouwt and Hak-
foort 2001) The growth potential of an
airport is therefore largely dependent
on the presence or absence of a global
alliance at the airport. Airports that are
not a home-base for a global alliance
partner are condemned to growing at a
modest pace, especially because they
lack the high numbers of transfer pas-
sengers.
2.4 The Low-cost Concept
Sometimes it is said that there are two
ways to make money in the aviation
business. The first is by creating a hub-
and-spoke network with additional al-
liances. The second way is by imple-
menting the low-cost concept, originally
introduced by the US airline Southwest
in 1967.
Ryanair started the low-cost revolution
in Europe, when it began with genuine
low-cost operations on the British Isles in
1991, patterned after the Southwest
model. The real revolution started after
the implementation of the third deregu-
lation package in 1993, which deregu-
lated the international air services
within the European Union. The devel-
opment of low-cost carriers started in the
UK because of the lower labour costs,
the huge London market and the light-
handed regulatory environment (Doga-
nis 2001). Go, Buzz and EasyJet all
started there. Since 1999, after the ex-
pansion in the UK, the low-cost carriers
began increasingly to take a hold on the
continental market. The only exception
is Virgin Express, which started with a
home-base in Brussels in 1994.
With growth rates of 15 to 60 % per
year, the low-cost carriers have rapidly
expanded their market power. The pas-
senger growth of the most important
low-cost carriers is presented in Figure
6. It is expected that the low-cost carri-
ers will expand their European market
share from the present 5% to 25% by
2010.
40 2003
25
20
15
10
5
Virgin Express
easyJet 0
Ryanair 1998 1999 2000 2001 2002
Figure 6: Passenger growth of the three
largest low-cost carriers (in millions), 1998 to
2002.
Source: Annual reports Ryanair, easyJet, Vir-
gin Express
The success of the low-cost carriers is
a result of the business model of these
airlines, which can be defined by three
key elements. The most important ele-
ment is the low operating costs, caused
by low personnel costs (ticket-less sales,
cheap labour), low airport fees (use of
secondary airports), low costs for main-
tenance (single aircraft type) and high
levels of productivity (high daily utilisa-
tion by reducing turnaround time). The
second element is the simple product
(no frills) offered. No free in-flight cater-
ing or entertainment, narrow seats
(higher seating density) and no seat
reservations are the most important fea-
tures of the product. The third element
of the business design is its positioning
in the market. Low-cost carriers offer
high frequency, scheduled, point-to-
point short-haul services, which they
promote with very aggressive marketing
strategies.
3 Increased Volatility
As we have seen, the period of limited
competition in European aviation and
the resulting network strategies of
European carriers have dramatically
changed the context in which airport
planners operate. Two main features
characterise the new context: volatility
and new requirements for airport layout
and functions.
The market environment of European
airports is getting more and more
volatile for a number of reasons. First of
all, deregulation abolished the exten-
sive financial state support to European
carriers. When carriers do not operate
efficiently enough, they simply disap-
pear from the arena or merge with an-
other carrier. The effect on the traffic vol-
ume of the central airports of these car-
riers are widely known in Europe and
the United States. Brussels Zaventem

had to cope with the bankruptcies of its
home carrier Sabena and its Qualiflyer
Alliance partner Swissair (see Figure 7
and Table 1). The airport lost huge num-
bers of passengers, especially transfer
passengers.
Second, airlines are now free to enter
(if capacity is available) and exit routes
as they wish. For intra-European traffic,
carriers are no longer bound to the
bilateral treaties. In theory, airlines
can build up and abandon hubs in
a relatively short period of time – as
happened in the United States after
deregulation. However, for interconti-
nental services, European airlines are
still bound to their country of registra-
tion. Relocation of intercontinental hubs
is therefore less likely in Europe for the
time being [2].
Third, the intensification and adoption
of hub-and-spoke networks by airlines
has increased volatility of airport traffic,
since transfer traffic generated by these
networks (see Table 1) is to a large ex-
tent unpredictable. Airports and the
home carrier compete for transfer traf-
fic. Changes in the quality of the con-
necting service (transfer time, ticket
price, frequency, quality of the hub air-
port) may easily result in declining num-
bers of transfer passengers since those
transfer passengers can travel through
other European hubs (de Neufville
1995; Veldhuis and Kroes 2002).
Finally, volatility is further being stimu-
lated by the increasing importance of
global airline alliances. Secondary air-
ports in networks of global airline al-
liances may lose the greater part of their
Airport 1997
Amsterdam Schiphol 42 %
Copenhagen Kastrup 45 %
Frankfurt Fraport 47 %
Paris Charles de Gaulle 38 %
Brussels Zaventem 25 %
Zurich Unique 37 %
London Heathrow 32 %
Note: Data for London Heathrow 2002 not available.
Table 1: Transfer traffic (percent in total number
of passengers) at major European hubs in
1997 and 2002
Source: Various annual/statistical reports
DISP 154
25
20
15
10
5
0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Brussels Zurich
Figure 7: Number of passengers at Brussels
Zaventem and Zürich Unique Airport, 1993
to 2002.
Source: Statistical Yearbook 2002 Zurich;
BRUtrends 1998 and 2002
transfer passengers to the airport that
functions as the primary hub of the al-
liance network.
De Neufville and Barber (1991a)
studied volatility in airport traffic before
and after US deregulation. They con-
cluded that volatility in airport traffic has
indeed increased due to deregulation
and changing network strategies. As far
as Europe is concerned, Burghouwt et
al. (2003) have concluded that net-
works of national airlines were quite sta-
ble during the first ten years of deregu-
lation. Volatility in airport traffic was
mainly caused by bankruptcies of
regional airlines, the growth of regional
hub airlines (such as Régional Airlines
at Clermont-Ferrand) and low-cost
carriers (such as Ryanair at London
Stansted). Recently, however, volatility
of airport traffic might have increased
significantly due to bankruptcies of ma-
jor European carriers (Swissair, Sabe-
na) and specialisation of hubs within
global alliance groupings.
Increasing volatility demands that the
standard process of airport “blue-print”
master planning be adapted.
4 Volatility Demands
Flexible Planning
Traditionally, the rational comprehen-
sive model was the dominant paradigm
in airport master planning (Dempsey
et al. 1997). A master plan consisted
of a future vision of the architectural/
2002
engineering development of a single air-
42 % port (de Neufville and Odoni 2003). de
46 % Neufville and Odoni (2003), de
53 % Neufville (1991b), de Neufville and Bar-
58 %
ber (1991a), Dempsey et al. (1997),
7%
and Hakfoort and Kreukels (1998) state
38 %
– that the traditional, rational comprehen-
sive master planning is characterised
by:
• Detailed forecasts: detailed forecasts
on future traffic are basic to the plan-
ning and design of an airport. It is assu-
med that planners have access to all ne-
41 2003
cessary information to make a rational
decision and choose the best develop-
ment alternative for the airport.
• Reactivity: the master plan is one res-
ponse to one specific expectation about
the future.
• Inflexibility: the master plan does not
consider alternative futures for the air-
port.
• The role of power: The rational-com-
prehensive model assumes a unitary,
powerful actor. It ignores the role and
preferences of other important stakehol-
ders (e.g., airlines, the public) during
the decision-making process.
However, the changing context in
which airport planners operate has
made traditional airport master plan-
ning inadequate for a number of rea-
sons. First of all, the informational re-
quirements of the rational-comprehen-
sive master planning are unrealistic. In-
creased volatility in airport traffic vol-
umes has resulted in the fact that air traf-
fic forecasts, basic to the traditional
master plan, are almost always wrong
(de Neufville and Barber 1991a; de
Neufville and Odoni 2003; Dempsey et
al. 1997). The future will likely be very
different from the master plan forecast.
A master plan based on a single traffic
forecast and a single future therefore
cannot be justified. Moreover, rational-
comprehensive master planning as-
sumes that all policy alternatives and
consequences are known. But, this is not
correct; planners do not have complete
and unbiased knowledge. Second, so-
cio-economic and political variables
cannot be ignored during the decision-
making process. Due to deregulation,
the balance of power in the airline in-
dustry has shifted from the governments
to the airlines. Hence, the role of airlines
in the decision-making process can no
longer be ignored, nor can the role of
the public, especially in dense metropol-
itan areas.
A leading academic on airport plan-
ning, Richard de Neufville, argues that
traditional master planning needs to
be discarded in favour of dynamic
strategic planning (de Neufville and
Odoni 2003). Comparable planning
concepts are flexible planning (Demp-
sey et al. 1997; Goetz and Szyliowicz

1997), “marketplace” planning (Caves
and Gosling 1999) and contingency
planning (Hakfoort and Kreukels 1998).
We will call these concepts “flexible
planning”.
Flexible planning is flexible, proactive
and interactive. It is flexible in the sense
that it recognises uncertainty and risk as
an inescapable reality. There are differ-
ent ways to deal with an uncertain fu-
ture. First of all, flexible planning does
not produce a single forecast but multi-
ple traffic forecasts under different sce-
narios. The determination of initial air-
port facility requirements is suitable for
several possible levels and types of traf-
fic in different scenarios. Second, the
new generation of airport planning ac-
knowledges uncertainty because it is in-
cremental and phased: it selects the
most suitable initial development that al-
lows planners to respond appropriately
to future levels of traffic. “Go/no-go”
checkpoints might prepare planners for
the unexpected (Goetz and Szyliowicz
1997). After the initial development,
new information is used to evaluate the
situation again and decide about the
next development stage. Incrementality
demonstrates itself physically as modu-
larity: facilities such as piers and termi-
nals are no longer indivisible entities but
consist of various modules that can be
built up when traffic grows.
Finally, flexible planning deals with
uncertainty because it is characterised
by hedging: some kind of back-up sys-
tem or insurance protects against an un-
foreseen and less favourable develop-
ment (contingency planning). This can
be a financial matter (buying insurance)
but also a technical (e.g., a backup-up
baggage system) or spatial matter
(reservation of land for future develop-
ments).
In contrast to traditional master plan-
ning, flexible planning is proactive. It
seeks to use new opportunities given the
strengths and weaknesses of the airport
instead of waiting for future develop-
ments. Flexible planning is interactive
in the sense that it acknowledges the
preferences of other stakeholders such
as airlines and the inhabitants of the
airport region (Dempsey et al. 1997;
Goetz and Szyliowicz 1997). It has
DISP 154
abandoned the idea that the planning
authority is the dominant actor during
the planning process. Goetz and Szyli-
owicz (1997) add an organisational di-
mension to this concept. Flexible airport
planning needs an appropriate organi-
sational structure that is robust and re-
silient. The organisation should be both
prepared and able to continue working
after unexpected developments.
Flexible planning might be the right
answer to the changes in the European
aviation industry because it builds in
flexibility as an answer to uncertainty.
The study of de Neufville (1991c) on
Sydney Airport has clearly demon-
strated the benefits of a flexible plan-
ning strategy, whereas the extensive
study of Dempsey et al. (1997) on Den-
ver International Airport has proven the
failure of traditional master planning in
a volatile market environment.
However, it is not clear to what extent
European airports have implemented
flexible planning strategies, although
some indications show that elements of
flexibility have been introduced to Euro-
pean airport planning. After September
11 and the SARS outbreak, a number of
airports postponed further development
of piers and terminals, which could be
seen as a form of incrementalism and
phased planning. Amsterdam Schiphol,
for example, decided to build only one
module of the terminal extension instead
of the planned four modules. The picture
is far from complete, however. Given
the increasingly volatile nature of the Eu-
ropean air transport industry, more re-
search on this topic is needed.
5 New Requirements for Airport
Layout and Development
5.1 Hub Airports
The changes in European aviation have
not only resulted in the need for a more
flexible airport planning process. It also
has affected the requirements for the
physical layout of airports. Due to the
adoption and intensification of hub-and-
spoke systems, the function of airports in
general has changed significantly. A
number of central European airports
42 2003
have evolved from origin-destination
nodes to transfer nodes. Hub-and-spoke
traffic has different requirements than
origin-destination traffic. Hub-and-spoke
networks imply a concentration of traffic
in both space and time. From the airline
or alliance viewpoint, spatial concentra-
tion requires a vast daily capacity at
the hub airport. Besides, because hub
airlines use wave-system structures to
facilitate transfers, the hub airport
should also have a large peak-hour ca-
pacity at the runway, the terminal and
the landside infrastructures. Amsterdam
Schiphol, for example, has presented its
plans for a sixth and seventh runway to
stimulate peak hour capacity and make
it possible to use two parallel runways
for both take-off and landing in virtually
every wind direction.
Because airlines compete for transfer
traffic, they will prefer passenger build-
ings that minimise walking distances be-
tween the gates in order to provide
smooth transfers. De Neufville and
Odoni (2003) state that midfield pas-
senger buildings (such as the passenger
buildings at Denver International, Lon-
don Stansted and Pittsburg) are the
preferred form for transfer traffic, com-
pared to the linear building (e.g.,
Munich, Barcelona), the finger-pier
building (e.g., Frankfurt, Amsterdam
Schiphol, London Heathrow) and the
transporter building (e.g., Washington
Dulles). The midfield passenger building
minimises walking distances for transfer
passengers and taxi time for aircraft.
Airports with long minimum connec-
tion times between flights such as Lon-
don Heathrow are generally not very at-
tractive transfer points for passengers.
To ensure the competitive strength of a
hub, the transfer process should also be
reliable and easy. Passengers find trans-
fers within one building more attractive
than between different buildings, for ex-
ample. Although, it must be borne in
mind that the availability of an intelli-
gently managed midfield concourse is
no guarantee for having a hub-and-
spoke airline and a large number of
transfer passengers. In the case of Brus-
sels Zaventem, the airport opened the
most modern midfield pier in Europe
in 2002, but as a consequence of the

demise of Sabena the excellent transfer
opportunities remain largely unused
(BIAC, 2003). Since transfer traffic is
highly unpredictable, the passenger
buildings should have some flexibility in
their use, for example, they can be ex-
tended easily when traffic grows. Devel-
opment space has to be available next
to existing airport facilities.
5.2 Low-cost Airports
Of course, not all hub airports fit the de-
scription in a strict sense. Only 22 out of
461 EU airports with scheduled services
had some kind of wave-system structure
in 1999, while about 40 airports were
hub airports in the sense that they pro-
vided more than ten indirect connec-
tions per day but they did not have a
clear wave-system structure (Burghouwt
and de Wit 2003). The rest of the air-
ports can be considered non-hub air-
ports.
An interesting group of airports
among the non-hub airports are the
home-bases of low-cost carriers. The on-
going low-cost revolution has had seri-
ous consequences for these airports. Re-
gional airports benefit the most from the
low-cost revolution because they can of-
fer low-cost airlines remarkable opportu-
nities for growth: they are uncongested
and charge relatively low airport fees.
The expansion of Ryanair’s operations
at Brussels South (Charleroi) and at
Frankfurt-Hahn are good examples of
booming low-cost operations from a re-
gional airport. The point-to-point opera-
tions make the specific facilities for easy
transfers unnecessary and the low-cost
carriers are certainly not willing to pay
for an expensive hub infrastructure. The
price tag for making the airport suitable
for low-cost carriers includes providing
the necessary infrastructure and facili-
ties. These facilities include single storey
terminals, lower (and cheaper) service
levels, quick turnaround times and high-
speed check-in facilities.
5.3 Commercialisation
The changing network behaviour of air-
lines has also changed the management
structure of airports, which seems to
have serious implications for the func-
tioning of airports. During bilateral reg-
DISP 154
ulation, airports were seen as public util-
ities with public service obligations. The
management of the airport was rela-
tively simple. Providing infrastructure for
national purposes was the core task and
only a few business skills and compe-
tencies were required.
Under limited competition, however,
airports have to meet the needs of the
new airline customers (such as hub car-
riers, alliances and low-cost carriers)
and passengers to compete in a volatile
marketplace. One of the strategies air-
ports used to fight the increasing com-
petition and uncertainty was to modify
and diversify their product. So, during
the 1980s the commercialisation of the
airport industry began to gain momen-
tum. The commercialisation process in-
troduced a more business-like, market-
orientated approach to the manage-
ment of airports (Jarach 2001). The in-
creased focus on non-aeronautical or
commercial revenues, the more proac-
tive role of marketing and the introduc-
tion of new business skills like financial
management and quality management
are visible indications of the commer-
cialisation of airports (Graham 2001).
The rise of the airport city can be seen
as the result of the differentiation and
commercialisation strategies of the air-
port site as a way to spread the risks
and reduce the dependence on the
aeronautical revenues. The largest air-
ports of Europe are increasingly being
integrated into the regional and high
speed train networks, which makes them
focal points of landside transport. Be-
cause of their central network position
on the airside (mega hub) and their
landside connections (multimodal inter-
change node), these airports become
an attractive development pool (Cofar
2001). In particular, the primary hubs
of Schiphol, London Heathrow and
Frankfurt are turning into powerful cen-
tres of urban development by concen-
trating various functions at the airport
site like office buildings, shopping
malls, casinos, hotels, conference halls,
etc. (Burghouwt 2002). At these pri-
mary hubs, the commercial activities
have brought in up to 50 % of the air-
port’s profits (Güller and Güller 2001).
The Schiphol Group especially presents
43 2003
itself as being in the business of “creat-
ing airport cities” (Schaafsma 2001).
Triggered by the necessity of finding
additional financing, other than public
funds, for the building of additional in-
frastructure, airport privatisation be-
came a reality in the 1990s. Privatisa-
tion reduces the need for public sector
investment and gives access to commer-
cial markets. Privatisation can also im-
prove efficiency and accommodate fur-
ther commercialisation of the airport in-
dustry. On the other hand, it is feared
that the needs of the community and air-
lines will be neglected and that airports
will become natural monopolies after
privatisation (CPB 2000). In Europe,
only some of the airports in the United
Kingdom have been fully privatised to
date (Humphreys 1999). The airports of
Zurich, Vienna, Copenhagen, Rome
and Frankfurt are partially privatised.
Privatisation of airport authorities in
many countries were planned for the
beginning of the 21st century, for
example, in the Netherlands (Schiphol
Group) and Belgium (BIAC), but have
been postponed as a result of the pres-
ent-day uncertainties in the rather unsta-
ble aviation sector.
6 Conclusion: Towards a New
Generation of Airport Planning?
Due to the deregulation of the European
airline industry, airlines have become
market-driven entities. Governments, air-
lines and airports are no longer a trinity
in bilateral air service agreements. Bi-
lateral regulation has now been trans-
formed into a situation of limited com-
petition. Airlines have adopted new net-
work strategies to cope with the intensi-
fied competition. The adoption and in-
tensification of hub-and-spoke networks
by airlines and global alliances as well
as the low-cost concept are among the
most important of these strategies.
The new network strategies have had
some significant consequences for the
context in which airport planners oper-
ate, especially regarding the new air-
port layout requirements and the in-
creased uncertainty for airport planners.
We have discussed some of the possible

impacts of the new context for airport
planning practices. The case for the
midfield passenger building, the need
for a more flexible planning model and
the commercialisation and diversifica-
tion of the airport product may be the
most important aspects of a new gener-
ation of airport planning.
The fact that airport planners are
nowadays confronted with a very unsta-
ble market environment deserves atten-
tion. Investments in airport capacity
are high-cost, long-term developments
whereas airlines’ network behaviour
is increasingly dynamic. Examples from
the United States (Denver International
Airport) and Canada (Montreal Mira-
bel) have clearly demonstrated the fail-
ure of traditional airport master plan-
ning approaches where detailed fore-
casts of future traffic volumes are central
to decisions on future developments and
master plans are of a high “blue print”,
centralised character.
A new generation of airport master
planning is therefore needed. This new
generation of airport planning adopts
flexibility in order to cope with a highly
unstable market environment. The ques-
tion remains as to what extent European
airport authorities have already adopt-
ed flexible planning approaches. More
research is needed to answer this ques-
tion. It is certain, however, that the
changes in European aviation have had
a structural impact on airline network
behaviour. The context in which airport
planners operate has changed forever.
DISP 154
Notes
[1] See Button (1998), Doganis (1991), Na-
yar (1995), Dagtoglou (1994) and Williams
(1994) for a detailed description of the
deregulation process.
[2] Recently, however, the EU transport minis-
ters have opened the door for one bilateral
treaty between the EU and the United States.
This bilateral will replace the umbrella of air
service agreements of the individual member
states.
References
BIAC (2003): Annual Report, Brussels Airport
Zaventem 2002. BIAC, Zaventem.
BOOTSMA, P. D. (1997): Airline Flight
Schedule Development; Analysis and Design
Tools for European Hinterland Hubs. Utrecht,
University of Twente.
BURGHOUWT, G. and J. R. HAKFOORT
(2001): The European Aviation Network,
1990–1998. In: Journal of Air Transport
Management 7(5): 311–318.
BURGHOUWT, G. (2002): De onweerstaan-
bare opkomst van de airport city. In: Ge-
ografie (September 2001).
BURGHOUWT, G., J. R. HAKFOORT and J.
R. RITSEMA VAN ECK (2003): The Spatial
Configuration of Airline Networks in Europe.
In: Journal of Air Transport Management
9(5): 309–323.
BURGHOUWT, G. and J. DE WIT (2003):
The Temporal Configuration of European Air-
line Networks. Air Transport Research Soci-
ety Conference, Toulouse.
BUTTON, K., K. HAYNES and R. STOUGH
(1998): Flying Into the Future. Air Transport
Policy in the European Union. Cheltenham,
Edward Elgar Publishing Limited.
BUTTON, K. (2002): Debunking Some Com-
mon Myths about Airport Hubs. In: Journal of
Air Transport Management 8(3): 177–188.
CAVES, R. E. and G. D. GOSLING (1999):
Strategic Airport Planning. Amsterdam, Perg-
amon.
COFAR (2001): Airport City and Regional
Embeddedness. Project Interreg IIC, Theme
2.3. Paris, IAURIF Prins DC.
CPB (2000): Schiphol: een normaal bedrijf?
Den Haag, Centraal Planbureau.
DAGTOGLOU, P. D. (1994): Air Transport
and the European Union. Essays and Com-
ments. Deventer, Kluwer.
44 2003
DEMPSEY, P. S., A. R. GOETZ and J.S.
SZYLIOWICZ (1997): Denver International
Airport; Lessons Learned. New York, Mc-
Graw-Hill.
DOGANIS, R. (1991): Flying Off Course.
The Economics of International Airlines. Lon-
don, Routledge.
DOGANIS, R. (2001): The Airline Business
in the 21st Century. London, Routledge.
GOETZ, A. R. and J. S. SZYLIOWICZ
(1997): Revisiting Transportation Planning
and Decision-making Theory: the Case of
Denver International Airport. In: Transporta-
tion Research A 31(4): 263–280.
GRAHAM, A. (2001): Managing Airports:
an International Perspective. Oxford, Butter-
worth-Heinemann.
GÜLLER, M. and GÜLLER, M. (2001): From
Airport to Airport City. Barcelona, Litogama.
HAKFOORT, J. R. and A. J. M. KREUKELS
(1998): Planologische theorie en de
besluitvorming rondom Schiphol. Colloquium
Vervoersplanologisch Speurwerk, Amster-
dam.
HANLON, P. (1996): Global Airlines. Com-
petition in a Transnational Industry. Oxford,
Butterworth-Heinemann Ltd.
HUMPHREYS, I. (1999): Privatisation and
Commercialisation. Changes in UK Airport
ownership patterns. In: Journal of Transport
Geography 7: 121–134.
JARACH, D. (2001): The Evolution of Airport
management Practices: Towards a Multi-
point, Multi-service, Marketing-driven Firm.
In: Journal of Air Transport Management
7(4): 119–125.
NAYAR, B. R. (1995): Regimes, Power and
International Aviation. In: International Orga-
nization 49(1): 139–170.
DE NEUFVILLE, R. and J. BARBER (1991a):
Deregulation Induced Volatility of Airport
Traffic. In: Transportation Planning and Tech-
nology 16: 117–128.
DE NEUFVILLE, R. (1991b): Understanding
and Using Forecasts. Foreword to Passenger
Forecasts for Logan International Airport.
Boston.
DE NEUFVILLE, R. (1991c): Strategic Plan-
ning for Airport Capacity: an Appreciation
of Australia’s Process for Sydney. In: Aus-
tralian Planner 29(3): 174–180.
DE NEUFVILLE, R. (1995): Designing Airport
Passenger Buildings for the 21st Century. In:
Transport Journal 111(May): 83–96.
 DISP 154 45 2003

DE NEUFVILLE, R. and A. R. ODONI (2003): Drs. Guillaume Burghouwt

Airport Systems. Planning, Design and Man- Faculty of Geographical Sciences
agement. New York, McGraw Hill. Department of Urban and Regional Planning
Utrecht University
OUM, T. H., C. YU and A. ZHANG. (2001):
Heidelberglaan 2
Global Airline Alliances: International Regu-
NL-3508 TC Utrecht
latory Issues. In: Journal of Air Transport
The Netherlands
Management 7: 57–62.
G.Burghouwt@geog.uu.nl
PELS, E. (2001): A Note on Airline Alliances.
In: Journal of Air Transport Management 7: Drs. Menno Huys
3–7. Faculty of Geographical Sciences
REYNOLDS-FEIGHAN, A. (1998): The Im- Department of Urban and Regional Planning
pact of US Airline Deregulation on Airport Utrecht University
Traffic Patterns. In: Geographical Analysis Heidelberglaan 2
30(3): 234–253. NL-3508 TC Utrecht
The Netherlands
REYNOLDS-FEIGHAN, A. (2000): The US M.Huys@geog.uu.nl
Airport Hierarchy and Implications for Small
Communities. In: Urban Studies 37(3):
557–577.
REYNOLDS-FEIGHAN, A. (2001): Traffic Dis-
tribution in Low-cost and Full-service Carrier
Networks. In: Journal of Air Transport Man-
agement 7(5): 265–275.
SCHAAFSMA, M. (2001): Planning Schiphol
Airport City. Flughafen- und Raumentwick-
lung. In: B. SCHOLL and E.-A. BUDAU. Karls-
ruhe, Institut für Städtebau und Landespla-
nung, Universität Karlsruhe: 7–15.
VELDHUIS, J. and E. KROES (2002): Dynam-
ics in Relative Network Performance of the
Main European Hub Airports. European
Transport Conference, Cambridge.
VISCUSI, W. K., J. M. VERNON and J.E.
HARRINGTON (1998): Economics of Regu-
lation and Antitrust. Cambridge, MIT Press.
WILLIAMS, G. (1994): Airline Industry and
the Impact of Deregulation. Cambridge,
Cambridge University Press.
ZACHER, M. W. and C. J. SUTTON (1996):
Governing Global Networks: International
Regimes for Transportation and Communica-
tion. Cambridge, Cambridge University
Press.

View publication stats