How Airlines Choose Their Routes and Destinations

We all want Philippine Airlines, Cebu Pacific, and AirAsia Philippines to fly to certain destinations. For example, we wish PAL would fly to Chicago, Rome, Amsterdam, and Frankfurt. There are some who wish Cebu Pacific would fly again to Riyadh and Doha. There are also some who are looking forward to AirAsia Philippines flying to Australia. But the question now lies in how airlines choose their routes and destinations. As much as we want them to fly there, will it make money for the airline?

Let’s not forget that an airline is a business. And if we focus on the Philippines’ local aviation, none of our airlines are state-owned.

Choosing the right routes is a big deal for any airline that wants to stay in the game. Adding new routes can boost profits, but picking a dud could be a money pit.

Questions to Ask

The first thing an airline needs to figure out is if there’s enough demand for a new route. A lot of airlines use special tools to check out who’s flying where. Sometimes, they can even use their own data. For example, if they notice a bunch of people flying from, say, Manila to Doha and then to Rome, a direct route from Manila to Rome might be a winner.

Another thing to consider is the demand. Is the travel demand consistent all year, or is it just a seasonal thing? Does the airline have a plane that can handle the route without burning through cash? Most importantly, can they make money off it?

Another to also consider is how much airlines can charge for tickets. They look at what people are paying for flights with layovers to get an idea of what they might pay for a direct flight. But ticket price isn’t the only thing airlines have to think about. They also have to consider what other airlines are doing. It’s not always about who’s cheapest. Some passengers stick with an airline because they’ve racked up frequent flyer miles. Others just go with what they know.

And that’s not the end of it. There are other things to sort out, like airport facilities, landing slots, and getting the green light from the government. But if an airline really believes a new route will work, they’ll find a way to make it happen.

Demand Forecasting

Before even thinking about starting a new route, airlines need to know how many passengers are likely to hop on board. They use aviation market intelligence tools to sift through tons of data. This data comes from the airline’s own operations and from industry-wide passenger data that shows travel trends. Key data points include fares, routes, airlines, and connections.

For example, let’s say there’s only one daily flight from Manila to New York operated by Philippine Airlines. But passengers also use other airlines for this route, like someone with a frequent flyer status on Korean Air might prefer a flight with a layover in Incheon. Airlines can see all this data, including the cities where passengers connect, the airlines they choose, and the average fare they pay.

Based on the average number of passengers traveling each day between two cities, airlines decide the type of aircraft that would be most suitable. You won’t see a Boeing 777 flying between two cities if only a handful of people travel that route daily.

Hub Connectivity

Airlines usually have one or more hubs where they operate the majority of their flights. The Network Planning team at an airline works to make sure passengers can get to their chosen destination within the airline’s route network. The timing of the flight is crucial here. If a flight is scheduled at a time when there are no connecting flights to other cities, it might not be as profitable.

For instance, flights between two cities are often spread out throughout the day to cater to different types of travelers. Business travelers might prefer early morning flights, so they can return home after meetings.

Aircraft Availability and Limitations

When an airline decides to fly to a new destination, it needs an aircraft for that route. Major airlines with large fleets might have a spare aircraft they can assign. It’s easier to allocate an aircraft for a short domestic flight than for a long international one.

Aircraft limitations like range, capacity, and payload also come into play. A regional aircraft might be suitable for multiple short flights in a day, while a wide-body airplane might be reserved for a long overseas flight.

Keeping an Eye on the Competition

Airlines often open routes that are already operated by other carriers. For example, the Manila to Singapore route has multiple airlines flying it. But sometimes, flying to a smaller city with no competition might be a better option. Larger airlines have the advantage of feeding their flights at their hubs with connecting passenger traffic. Smaller airlines, like Royal Air Philippines, might rely more on local traffic and choose routes not commonly flown by bigger airlines, such as Clark to Hong Kong, and Caticlan to Taipei.

While we do have our wishes for our local airlines to fly to more destinations, let’s not forget that these have to be carefully studied. While a certain route may be good for us, it may be a red flag for the airline in the long run. Proper route planning is a huge investment in terms of money, time, and risk.