Analysis of demand structures on intercontinental routes to and from Europe with a view to identifying potential for new low-cost services

Dieter Wilken, Peter Berster and Marc Gelhausen

Journal of Air Transport Management, 2016, vol. 56, issue PB, 79-90

Abstract: In contrast to short- and medium-distance flights, intercontinental flights by legacy carriers need feeder demand from both passengers and freight, in order to be commercially viable. The origin to destination (OD) demand on intercontinental routes is often only a small fraction of the total passenger volume on that route. Low-cost carriers like Norwegian Air (DY) are more and more interested in serving intercontinental routes, although their business model relies primarily on point-to-point traffic. It is the objective of this paper to describe the demand structure on intercontinental routes – that is, the direct OD demand, the OD demand using transfer services, and the feeder demand at both trip origin and destination – by route type, and to draw conclusions regarding the potential for new services (i.e. in the low-cost segment and on hub-bypassing routes, where a lack of OD and/or feeder demand may form obstacles for carriers attempting to enter the market). The analysis concentrates therefore on routes with relatively small passenger volumes and on a demand model which estimates the passenger volumes in relation to the OD demand and supply factors.

Keywords: Demand structure on intercontinental routes; Direct and feeder demand; OD demand; Stopover demand; Potential for hub-bypassing and low-cost intercontinental routes (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:56:y:2016:i:pb:p:79-90

DOI: 10.1016/j.jairtraman.2016.04.018

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