You might be wondering why some airlines, like Middle Eastern carriers, have more than 200 planes and operate from huge airports, while others maintain a modest fleet. Well, that’s because airlines employ two different strategies: the hub-and-spoke and the point-to-point strategies. Most Middle Eastern airlines use the hub-and-spoke model due to their geographic location, while some airlines, like Australian carriers, use a point-to-point one.
The point-to-point model offers passengers a direct route from their starting point to their final stop, eliminating the need for a stopover. Conversely, the hub-and-spoke model leverages a central hub to bridge passengers between various points. In this discussion, we will delve into the differences between the point-to-point and hub-and-spoke models.
The airline industry’s two primary operational strategies, the hub-and-spoke model and the point-to-point model, offer different advantages and considerations. The choice between the two depends on various factors, including economic conditions, aircraft technology, and passenger preferences.
Hub-and-Spoke System
The hub-and-spoke system is a time-honored method that established airlines have used to streamline their operations. In this model, an airline centralizes its flights in a ‘hub’ airport. From here, passengers travel to their final destinations either directly or by connecting to ‘spoke’ cities. This structure allows airlines to maximize coverage with a minimum number of routes. For instance, instead of operating 45 separate routes for ten destinations, an airline can connect these same destinations with just nine routes, making this model a cost-effective solution for the airlines.
The hub-and-spoke model continues to be favored for international flights, particularly among airlines with a single hub airport. The pattern sees travelers from all over the world converge in one central location before dispersing to their respective destinations. This model has proven its worth by aligning with the industry’s requirements and trends at different times, but it has faced some challenges.
Point-to-Point Model
Recent technological advances and changes in passenger preferences have given rise to an alternative approach: the point-to-point model. With this model, passengers fly directly between their departure and destination cities, bypassing the need for a central hub.
Fuel-efficient aircraft have made operating direct flights more economically viable, even on previously marginal routes. Coupled with the rise of low-cost airlines that have perfected the art of minimizing operating costs, the point-to-point model has become a desirable alternative. Furthermore, passengers generally favor direct travel over spending extra hours in airports to change planes. The preference for direct routes has been one of the primary forces behind the increase in point-to-point travel.
An Industry in Flux
The airline industry has traditionally shown flexibility in adapting to changing circumstances. With the impact of the COVID-19 pandemic, we have seen a resurgence of the hub-and-spoke model due to dwindling passenger numbers and financial pressures. However, it’s important to note that these changes are likely temporary. As the industry regains momentum post-pandemic, the demand for point-to-point travel is expected to rebound.
Large airlines such as Air India have been making significant investments in long-range jets like the Boeing 787, Airbus A350, and Boeing 777X. Similarly, Philippine Airlines has also invested in A350-1000s to facilitate an increased passenger volume between Manila and New York. Globally, airlines are gradually expanding their fleets as both Airbus and Boeing ramp up their production. These developments signal a growing interest in the resurgence of the point-to-point model.
In response to this trend, airlines like Emirates are adjusting their strategies. Despite primarily operating under the hub-and-spoke model with Dubai (DXB) serving as their central hub, Emirates is now entering interline agreements with over 800 different airlines worldwide. This strategy will enable Emirates passengers to reach more global destinations through local airlines partnered with Emirates. Conversely, these partner airlines can offer point-to-point flights from their home country to Dubai, from where passengers can connect to their final destination via an Emirates flight.
As competition intensifies within the airline industry, adaptability becomes the key to survival. Traditional methods may no longer suffice, and the ability to pivot between different strategies becomes vital. In some cases, airlines may need to operate under both the point-to-point and hub-and-spoke models, especially if they are based in countries with well-established airports like Changi, Seoul Incheon, Hong Kong Chep Lap Kok, and Taiwan.
Currently, the Philippines is unable to fully implement a hub-and-spoke model due to the overcrowded conditions at Ninoy Aquino International Airport (NAIA). However, with the forthcoming opening of the new Bulacan Airport, local airlines like Philippine Airlines may soon have the infrastructure necessary to effectively operate both the hub-and-spoke and point-to-point models.
First love never dies. I fell in love with airplanes and aviation when I was a kid. My dream was to become a pilot, but destiny led me to another path: to be an aviation digital media content creator and a small business owner. My passion for aviation inspires me to bring you quality content through my website and social accounts. Aviation is indeed in my blood and blog!
