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"Roland Perry" wrote in message
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In message , at 20:21:52 on Tue, 17
Dec 2013, tim...... remarked:
Intra UK transit pax are not the problem. It's the perceived need to
steal pax from other European carries at major European "hubs", that
is

I was researching flights to SA the other day and it is 20% cheaper
to fly LHR-FRA-CPT with LH than it is to fly FRA-CPT

OTOH it is 20% cheaper to fly FRA-LHR-CPT with BA than it is to fly
LHR-CPT.

So the reason that LHR needs to be a hub is because BA (apparently)
can't fill a plane from LHR to CPT without "bribing" pax from Germany
to fly via London.

You really don't understand yield management, do you?

Yes I do

It's about selling the highest priced fares to people who insist in
direct flights,

and the cheapest ones to people who book early

then filling the remaining seats with people on feeders from nearby.
The result maximises revenue, even if some people get cheaper flights
as a result of agreeing to be those indirect passengers.

That's fine, but it's no reason to insist you need a hub so that you
can fill a plane that you have artificially made less full than it
might have been




You're both wrong.

as I already pointed out

the author of the report agrees with me so he must be wrong as well

tim




I haven't found that yet in the report or the appendicies. Can you
please point me to it?

It was repored in the newspaper, must have been the Telegraph as that's
the only one that I read at work

here it is

http://www.telegraph.co.uk/finance/n...hort-list.html

"Although two options have been short-listed for a possible third runway
at Heathrow, Sir Howard said the commission is not convinced that London
would be best served by one big hub airport"

tim


Firstly my "you're both wrong" comment applied to yield management.

Thank you for the Telegraph link. In many places around the world hubs are
defined by the fact that one (occasionally two e.g. Chicago O'Hare) airline
has a dominant position *and* schedules flights in such a way that
connections across the hub can be seen as a series of "waves" with flights
coming in from one direction and a little later a wave going on to other
destinations. It's not the only definition but it's the most prevalent, in
my view.

Heathrow is a hub but perhaps not in quite the same way. Yes, BA bring in
people from all sorts of places and carry them on to further destinations
(so Heathrow is their hub) but they also bring a lot of people to London as
a destination. In the case of BA it's also the case that their hub isn't
simply long to short haul (or vv). Flights from Africa and the Gulf feed
transatlantic services and Africa also feeds the far east . But BA isn't
the only airline hubbing at Heathrow. Star Alliance also have a hub and,
for example, South African feed into United. Part of the reason BA bought
British Midland was to disrupt the feed BD provided to other Star carriers.
There is also an interline hub at Heathrow with some of the smaller short
haul airlines feeding into the long haul services of all the major airlines
without needing to be members of an alliance. BA may be the dominant
airline and have the biggest hub at Heathrow but when you compare it to the
position of (say) Lufthansa at Frankfurt or Munich it's a different traffic
mix and when you consider something like the United hub in Denver you're in
a completely different world.

It's almost possible to define Heathrow as schizophrenic and I'm not clear
whether we're reading the comments from the report correctly or not. I'm
still reading the report and that may clarify things for me. One thing I
am fairly clear on is that BA needs the connecting traffic that it hubs over
Heathrow. It's partly about being able to pull in a mix of currencies from
sales in different countries (their Treasury is quite sophisticated at
managing currencies), partly about being able to pull in higher fares by
connecting one flight (be it short or long) to a long haul and partly about
being able to serve cities that would otherwise not generate sufficient
traffic to warrant a flight to/from Heathrow. It's also about being able
to meet the needs of corporate customers who will have deals with BA on the
basis of providing traffic not just between a city and Heathrow but between
several city pairs which may be Heathrow or connecting over Heathrow.