1. Department of Air Transport, Cranfield University MSc in Air Transport Management 2009-2010 MSc Thesis Presentation Rationalising Airline’s Multi-hub Strategy:A Study of Network Performance and Competitive Impact Wenkan (Ken) LI 7 Sep 2010 Supervisor: Dr. Chikage Miyoshi
2. Presentation Outline Chapter 1: Introduction Introduction - Research Aim & Objectives - Research Questions Methodology - Overall structure - the HCI model Findings - Network Performance - Competitive Impacts Discussion - A Proposed Multi-hub Strategy Research Originality and Limitations Research areas, aim, objectives and questions Chapter 2: Airline Network Chapter 3: Multi-hub Network Bring in contemporary multi-hub issue, A proposed multi-hub matrix Airline network fundamentals, literature review Chapter 4: Hub Connectivity Indicator Model The construction of the Hub Connectivity Indicator (HCI) model Chapter 6: Network Performance Multi-hub strategy’s impact on hub connectivity (quantity & quality) Chapter 5: A Strategic View of Multi- hub Case study rationale, case background introduction: ANA Narita-Haneda multi-hub network Chapter 7: Competitive Impact Multi-hub strategy’s impact on airline’s market position Chapter 8: Discussion and Conclusion Discussion on thesis findings, study originality and future research direction Figure 1: Thesis Structure
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4. What the major drivers or factors contributing to the emergence of multi-hub?
5. What are the characteristics and structure of multi-hub?
6. What is the network performance of multi-hub in close proximity, particularly hub connectivity?
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8. Methodology | the HCI model Figure 3: The Hub Connectivity Indicator (HCI) Model Non-stop flight time Perceived travel time No. of hub involved in transfer Availability of direct service Direct distance Indirect distance Routing Factor Time Factor Minimum Connecting Time Maximum Acceptable Connecting Time Viable Connections Threshold Flight schedule Quantity of Viable Connections (QVC) Quality of Connectivity Index (QCI) Hub Connectivity Indicator (HCI) Source: author 2010
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10. The positive effect of HND international services has been immaterial at the time being, but with great potentials (see scenario)
11. Alliance and code-shares partner contribute to the improvement as wellRemark: data includes flights operated by ANA and its partners to and from NRT-HND; scenario is based on 2010 schedule with additional ten weekly U.S. bound international flights at HND. Source: author based on the HCI model
12. Findings | network performance of multi-hub | new HND routes Figure 5: connectivity of new HND international routes Remark: data includes new HND international flights operated by ANA in 2010. Only connections involving either inward or onward connecting with those flights are counted. Source: author based on the HCI model
13. Findings | network performance of multi-hub | partner’s analysis Figure 6: alliance & code-shares partner’s contribution to ANA’s network performance (2010) Remark: * = Star Alliance partner. Data includes flights operated by ANA and its partners to and from NRT-HND. Only connections involving one segment operated by partners are counted. Source: author based on the HCI model
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15. Competitive positioning maps in Asian inter-continental transfer marketsFigure 7: Asia – North America & Pacific transfer market Figure 8: Asia – Europe transfer market Source: author based on the HCI model
16. Discussion | a proposed future ANA multi-hub strategy Figure 9: a proposed future ANA multi-hub strategy NRT-HND Multi-hub Strategy NRT Asian gateway Inter-continental services Asian non-hub routes Asian hub to hub routes HND Hub for Japan Inter-continental services Japan domestic routes Source: author 2010
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18. The HCI model can provide transfer/connection details broken down to flight level
19. Together with other airline’s cost/yield data, HCI could contribute to the revenue management and pricing strategies
27. Appendix : Hubs in the Great Tokyo Area Source: author based on ANA’s annual report 2009 and airports’ websites
28. Appendix : New slots allocation at Haneda (HND) Before Oct 2010 30,000 day flights: 6:00 ~ 23:00 Short-haul routes within Asia 300,000 slots 3 runways 60,000 will be allocated by 2010 Start in Oct 2010 Long-haul routes to Europe and U.S. 30,000 night flights: 23:00 ~ 6:00+1 + 110,000 Additional new slots starting from Oct 2010 4th runway 24-hour open 50,000 will be allocated in or after 2011 410,000 slots Total NO. of slots at HND starting from Oct 2010 Source: author based on ATI News
