7 replies to this topic

[Joeco]

Excuse my ignorance, but what is the benefit of setting an airport as a hub? I thought maybe this was required for connecting traffic but that doesn't seem to be the case (at least not across all worlds).

Can someone explain please?

[Superman]

What are the benefits of a hub?
Hubs provide you with connecting passengers (see above) on routes departing/arriving at that hub. However, a hub also doubles your gate rental fees at that airport (due to extra staffing costs).

[TanWeiMing35_]

What if you already have a terminal and you open the hub with terminal? Does it also means extra gate rental fees?

[TanWeiMing35_]

What if you already have a terminal and you open the hub with terminal? Does it also means extra gate rental fees?

[konj1]

Yes, but rent for terminals is already very low, your company won't feel it.

 

Open your hubs and try them, they are a great thing. Airlines without hubs are a nuisance, always having less passengers and crashing prices.

[benem]

I'm not sure that a hub is so convenient.

 

The transfer passenger pay half of the ticket price. And even if allow you to rise prices, have a plane full of "direct" passenger gives you more money even with lower prices to fill the plane.

 

You can use the transfer passengers to offer more seats than demand on a route. Anyway as they pay half of the price, is more efficient, from finances point of view, to stick with the demand and, eventually, sending the plane to another route.

[konj1]

If we're talking about serious companies, you're wrong. It is the most convenient thing you can do in a competitive market if you don't want to keep an eternal price war going on. Going in hub-less price drops can make more money in a short while, but it will come after you because you're not protected if someone else even equalizes, let alone drops the price.

If you leave for "another route" as soon as someone else comes, well that's lame... I can't see it being very rational unless competition is overwhelming, and you're probably stirring more competition without a hub to begin with.

If you're in a mood for that kind of war do go on, but it will make both your and your competitors' life more difficult and annoying and less profitable, unless you enjoy that type of struggle stuff just for fun.

 

From the costs standpoint, you're even more wrong.

In AE, hubs with terminals are dirt cheap, my 200 gate ATL, ORD and CLT terminals with hubs monthly cost COMBINED less than single one of my ATR-72s earns in that month! So math is definitely not on your side.

 

True story, bro.    

[alexSD]

I always make hubs to signalise that that's an important airport for my airline, not  just a destination.