Determining Hub Efficiency in Europe, the Middle East, and North Africa: The Impact of Geographical Positioning

M. Nenem () and Emine Gunay ()

Eurasian Economic Review, 2012, vol. 2, issue 2, 37-53

Abstract: In order to extend beyond their natural home markets, airlines compete to obtain the highest share of transit passenger traffic. Therefore, they focus on their geographical advantage in certain regions in order to attract a maximum number of transfer passengers. This study assesses the geographical attraction of existing and promising hubs in Europe, the Middle East and Northern Africa by employing a Cost of Available Seat per Kilometer (CASK) parameter as the reference point. Seven competing cities (London, Paris, Frankfurt, Dubai, Istanbul, Cairo and Madrid), said to be existing and newly emerging hubs, are compared in terms of cost effectiveness. A model comparing the relative superiorities of these candidate cities over one another is developed based on a sample of 4,080 distinct Origin and Destination (O&D) pairs. The basic results, without the attribution of O&D’s total traffic standings, show that Cairo, Istanbul and Dubai are the three best performing hub candidates, respectively. In absolute numbers, Cairo has the larger advantage over the six other candidate cities. However, when the size of the O&D’s are weighted, the best performing cities are founded to be Istanbul, Frankfurt and Cairo, respectively. In this case, Istanbul is determined to be the most efficient hub for the majority of transit passengers. Despite the downturn in the Aviation Industry in 2009, the growth trend both in Egypt Air and Turkish Airlines is a reflection of these airlines’ recent realization of their potential in hub efficiency. Copyright Eurasia Business and Economics Society 2012

Keywords: Hub Efficiency; Emerging Hubs; Aviation Policy; L9; L93 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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DOI: 10.14208/BF03353836

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