Codesharing has enabled KLM to increase the city-pairs it offers ninefold in six years, according to Henk de Graauw, the carrier's director strategy and commercial cooperation. Speaking at the Airline Business/ASM Routes 97 forum in Abu Dhabi, de Graauw said that KLM and its partners now serve 90,000 city-pairs. Codesharing now accounts for 1.1 million KLM ticket coupons per year, added de Graauw; the airline carried 12.3 million passengers last year.
In the last six years, KLM's own city-pair count has risen from 10,000 to 15,000. Its European codeshare partners account for a further 5,000, but the bulk of the increase - 70,000 - arises from the Northwest alliance.
Illustrating the power of the Schiphol hub and the importance of its regional feeder partners, de Graauw said that local traffic accounts for only 13 per cent of Eurowings' passengers on its nine routes from Germany to Amsterdam. Intercontinental connections account for 62 per cent of Eurowings' traffic on these routes, and European connections the remaining 25 per cent. Eurowings serves Amsterdam from Hannover, Paderborn, Dortmund, Düsseldorf, Cologne-Bonn, Stuttgart, Nuremburg, Dresden and Leipzig.
The situation is similar, though not as marked, with Abu Dhabi, which KLM serves four times a week via Bahrain. Local traffic accounts for 52 per cent of the total on this route, with 22 per cent of passengers making intercontinental connections, mostly to North America, and 26 per cent connecting to Europe, mainly the UK and Germany.
Working with partners to connect multiple hubs worldwide is an essential part of KLM's strategy and is bearing fruit, said de Graauw. Multi-hubbing is accounting for more business than KLM had expected, he added. On an average flight between Amsterdam and a Northwest hub, a surprising 40 per cent of passengers have itineraries involving a double connection, with the rest of the traffic evenly split between single connections and local traffic. 'No one really thought that the market for the hub would be the person who flies Billund-Amsterdam-Detroit-Denver,' said de Graauw.
In some cases the multi-hub concept is allowing KLM to offer a daily travel option in markets which will not support direct daily services. For example, KLM flies to Mexico City direct on four days each week, but offers a codeshare flight via Memphis on the other three days.
Other recent developments among KLM partnerships include:
* Codesharing with Ansett Australia to Brisbane, Melbourne, Cairns, Perth and Adelaide, replacing expensive and inconvenient circle flights;
* Codesharing with Kenya Airways between Amsterdam and Nairobi using Kenya Airways aircraft from this winter. De Graauw confirmed that KLM will stop many of its own African services and replace them with codesharing flights via Kenya Airways, as well as adding new destinations in this way;
* Developing the Curacao hub operated by ALM, whose passenger traffic rose 12 per cent last year as a result;
* Increasing frequencies between Amsterdam and Northwest's hubs, with Detroit now served three times a day, and Memphis and Minneapolis daily.
In a Routes '97 workshop on regional airlines and hubs, Leon Verhallen, director of passenger marketing at Schiphol, provided further insight into the development of regional feed into the airport. Within the existing regional catchment area of a 300 nm radius, Verhallen said regional routes were developing in three ways:
1 Frequency and capacity increases on existing routes out of Schiphol. For example, Cardiff frequencies have risen from two to five times daily since 1991, while daily flights have risen from three to six at Basle and Eindhoven and from four to six at Bremen.
2 New destinations, such as Dortmund, Aarhus and Groningen.
3 Point-to-point routes bypassing Schiphol. Examples include Base Business Airlines' Eindhoven-Manchester service and TTA's Rotterdam-Hamburg flights. While these detract from Schiphol, Verhallen said they can stimulate some traffic indirectly, by getting passengers used to using their local airport. For example, an Eindhoven resident who usually drives to Düsseldorf might fly from Eindhoven via Schiphol to other destinations once he has become used to using Eindhoven.
The introduction of regional jets is enlarging the catchment area to 500nm, and is also resulting in three types of route development, said Verhallen:
1 New destinations such as Berne, Turin and Dresden are enabling Schiphol to 'raid' other hubs' traffic;
2 Hub bypass routes such as Hamburg-Barcelona and Vienna-Manchester mean that Schiphol loses some feeder traffic;
3 The development of 'Eurohubs' at medium sized airports such as Manchester, Birmingham, Munich and Geneva can both help and hinder Schiphol's development. In some cases traffic may be lost, but in others opportunities are opened up, for example the Swissair/Crossair Amsterdam-Geneva-Valencia connection.
Verhallen says many of Amsterdam's regional routes have grown significantly, mostly on the back of transfer traffic.
Departures to Cardiff more than doubled to 32,000 passengers between 1991 and 1995, of whom nearly 18,000 are connecting.
Traffic on Maersk's Billund route leapt tenfold to 35,000 departures in the same period and will reach 50,000 this year.
Departures to Salzburg with Tyrolean have jumped from 1,500 to 18,500. On the Hannover route, which Eurowings took over at the end of last year, departures have risen 76 per cent to 45,000; all of the growth has been in transfers, which now account for over 80 per cent of traffic in this market.
Many European regional carriers have developed more than one distinct operating concept, says Verhallen, decreasing their reliability on one source of income. Examples include Crossair, which feeds Zürich and Geneva, plans a minihub at Basle-Mulhouse, and caters to origin and destination traffic at Lugano and Berne.
Brit Air has its own network in northwest France while feeding the two Paris hubs on behalf of Air France. Recently renamed Swiss Regional Air Engiadina flies to five European destinations out of Berne, but also has two feeders flights into Zürich and codeshares with KLM into Amsterdam. Tyrolean flies from Austrian regional airports to European cities, while feeding Austrian Airlines at Vienna.
A further example is provided by KLM affiliate Air UK, which is building its own Stansted hub while feeding KLMand Northwest at Amsterdam from UK regional airports.
Northwest and Air UK say they carried 20,000 codeshare passengers in the first four months of their codesharing agreement, which connects UK regional airports with North America via Amsterdam. 'In June, the first month, we were averaging 160 passengers a day over Amsterdam,' says Ian Thornley, Northwest's UK general manager. 'By September the daily average had climbed to 290.'
It is clear that airline alliances, when combined with global hubbing strategies, are beginning to have a real impact on travel patterns. The connecting passenger has become the focus of airlines' marketing efforts worldwide as well as within the US. In the US domestic market, flying via a hub often produces a price discount compared to a nonstop option. But long-haul nonstop services are not available for many passengers who fly from secondary European airports; these travellers represent lucrative, high-yield business.
The experience of the KLM group suggests that attractive hubbing options, with convenient schedules, minimal waiting times on the ground, and superior facilities for transfer passengers, can help airlines to differentiate themselves in the eyes of the customer.
Source: Airline Business
