3. Results (2)UK regions’ gateways to Asia-Pacific and BRIC

3. Results (2)UK regions’ gateways to America

3. Results (2)UK regions’ gateways to Africa and the Middle East

!

4. Conclusions1. The strong hub competition in Europe and the lack of new route developments

may damage Heathrow’s position as a world-class connecting gateway in the coming years.

a) In absolute terms, more connecting UK passengers travel through Amsterdam or Dubai than via Heathrow.

b) Heathrow benefits from its massive traffic generation to remain the most central gateway for the overall UK air transport market.

2. UK regional airports have significant dependence on foreign hubs in many destinations.

a) Three quarters of the connecting traffic from UK regions to Asia-Pacific and the BRIC countries depends on non-UK hubs.

b) Heathrow only remains as the main gateway to North America and the Middle East.

3. A few policy considerations.a) Network coverage and pricing strategies seem to play an important role in capturing market

share.b) Fifth-Freedom does not offer a total solution, but some mid-tier European airports have

been successful in boosting their connectivity to particular intercontinental destinations.c) Regions can turn threads into opportunities: The role of foreign airlines in secondary

airports.

Thank you very much for your attention

p.suausanchez@cranfield.ac.uk

@peresuau

@CranfieldCATM

Back-up slides

The airport as a location factor for firms

Knowledge concentration and diffusion

The value chain and transport costs

General attractiveness of the region

1. Airports as engines of economic development

Air transport is essential for the diffusion and concentration of knowledge

1. Air transport is the only transport mode that allows the efficient exchange of tacit knowledge at the global scale (Shin and Timberlake, 2000).

Learning-by-interactingFace-to-face, trust,…

2. There is a correlation between the supply of air services and the existence of added value activities in a region. (Button et al., 1999; Breuckner, 2003; Greene, 2006; Alkaabi and Debbage, 2007; Bel and Fageda, 2008)

A 10% increase in the number of non-stop intercontinental flights is translated into a 4% increase in the location of headquarters.

Technological sectors: Pharmaceutical firms, microelectronics, aeronautics, optics and precision instruments, etc.

Knowledge intensive sectors: Financial firms, R&D firms, design firms, advance medical centres, educational institutions, etc.

1. Airports as engines of economic development

Methodology (II)• Fifth-freedom traffic

• Search for relatively rare “beyond” sectors (OAG)• Only non-EEA airlines• Cross-reference it with our MIDT dataset• Passengers in all markets using “beyond” sectors are included.• Indirect (od) connectivity: importance for local passengers• Overall results are disaggregated by geographical markets.

DXB LHR (Qantas)

SYD

ITINERARIES OF UK REGIONAL PASSENGERS TO/FROM WORLDWIDE REGIONS (MAY 2013)

European Economic Area (plus Switzerland)

WORLD

Rest of Europe (non-EEA)

North America

BRIC

Asia-Pacific

Africa

Middle East

Latin America and Caribbean

LEGENDDirect flightTransfer via South East England hubsTransfer via alternative EEA hubsTransfer via rest of world hubsNote: The size of the pie charts is proportional to the market size.

3. Results (2)UK Regional access to international markets

• Limited contribution, both in absolute and relative terms• Few examples of substantial local benefits• Secondary airports and hub bypassing

Airport 5th-freedom od passengers

Contribution to od markets per destinationNorth

AmericaLAC Africa Middle

EastAsia-

PacificHeathrow 37,280 1.3% - 0.1% 4.5% 1.7%Frankfurt 17,642 4.9% 0.7% 0.3% 2.1% 0.1%Amsterdam 15,385 - - - 1.0% 8.7%Brussels 13,949 13.0% 1.0% 0.9% - -Paris CDG 9,684 1.4% - - 0.1% 0.4%Rome Fiumicino 5,550 - - - 1.3% 1.8%Barcelona 4,685 - 7.0% - - 0.4%Vienna 4,279 - - - - 6.7%Zagreb 3,830 - - 6.5% 1.2% 37.5%Manchester 2,795 - - - - 0.6%Madrid 2,134 - 0.5% - 1.7% 0.3%Sofia 1,765 - - 2.0% 0.3% 9.1%Stockholm 1,580 - - 9.8% - -Riga 536 13.5% - - - -

3. Results (3)Impact of 5th-freedom traffic on international traffic