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Impact of capacity constraints on airport choice of air travellers

Paris, 13.12.2007. Impact of capacity constraints on airport choice of air travellers. Dr. Marc Ch. Gelhausen. Agenda. Introduction Airport and access mode choice model A hypothetical example Conclusions. Introduction. Why consider capacity constraints in airport choice?.

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Impact of capacity constraints on airport choice of air travellers

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  1. Paris, 13.12.2007 Impact of capacity constraints onairport choice of air travellers Dr. Marc Ch. Gelhausen

  2. Agenda • Introduction • Airport and access mode choice model • A hypothetical example • Conclusions

  3. Introduction

  4. Why consider capacity constraints in airport choice? Limited airport infrastructure: • Runways • Terminals • Night curfews • … Reduction of available capacity of an airport to handle passenger demand

  5. Why model capacity constraints in airport choice specific? • Air fares do not reflect the capacity situation at airports fully, at least over a short time horizon • In an equilibrium of air fares and airport capacities, the first choice of an air traveller regarding the departure airport is not necessarily met • Air fares are often not included in airport choice models due to data problems Most airport choice models assume unconstrained airport capacities

  6. Low Re-assignment of demand Mixed strategy e.g. DUS e.g. MGL Travel Disutility Restricted growth of demand Airport capacity expansion e.g. HOQ e.g. HHN High / No Yes Airport capacity fixed? Possible consequences of capacity constraints at airports • Three consequences: • Re-assignment to other airports • Capacity expansion • Lost demand Importance of high speed trains! e.g. CGN – FRA

  7. Airport choice and future avenues • State of the art: Show the dependence between airport and access mode characteristics and airport choice • Model currently employed by Deutsche Bahn AG (Gelhausen 2006) • Innovation: Inclusion of capacity constraints at airports to show dependence between airport choice, airport & access mode characteristics and capacity constraints at airports • Additional output: Number of air passengers to reassign to neighbour airports because of capacity constraints

  8. Some facts from the German Air Traveller Survey 2003: • 19 international airports (2 Hubs) • 5 regional airports • 67 % choose nearest airport • No. of airports serving a SPR: • Minimum 3 airports • Maximum 14 airports • On average 8 airports Airport system in Germany – airport choice SPR: Spatial Planning Region

  9. Airport and access mode choice model

  10. „Key aspects“ Abstraction from specific alternatives Nested logit-model Synthetic price concept Airport and access mode choice model Generally applicable model Consideration of capacity constraints

  11. Forecasting philosophy of a nested logit-model Traveller: „Which alternative is the best for me?“ Access cost, access time, flight plan, ... Evaluation of alternatives by means of utility Lack of observability, measurement errors, … Forecaster: „ Which alternative is most likely the best for him?“ Choice probabilities Summing up over homogenous populations Market segment specific market shares of all alternatives

  12. Idea: The higher the loss in personal welfare (utility) from alternative to alternative, the higher the efforts to get a “slot” for the best alternative, e.g. by early booking or paying higher prices. Approach: Capacity at airports is filled up in this manner simultaneously across market segments, trip origin and trip destination. Realisation: Increase so-called “synthetic price” to decrease airport attractiveness and thus redistribute excess demand until capacity constraints are met. Modelling capacity constraints in airport choice

  13. A simple hypothetical example

  14. Berlin Barcelona Dallas Airport choice in the Cologne region Market segments: • Private / Business • Domestic, Europe, Intercont Cologne Access (car, train etc.) Flight Cologne Trip origin Berlin Trip destination

  15. Airport choice and access quality

  16. Airport choice constrained Airport choice – unconstrained and constrained Airport choice unconstrained

  17. Sensitivity to capacity constraints per market segment • Sensitivity is much higher for domestic (190/30)* and European (216/236/11)** travel than for intercontinental (59/49)* travel. • Sensitivity is much higher for private than for business travel. • However, sensitivity depends also on the level of attractiveness of an airport  the higher the attractiveness, the less the sensitivity. • However, demand is distributed among more airports with especially small airports increasing their market share significantly. * (Private/business) ** (Short stay/holiday/business)

  18. Increase of travel time as one reason of airport constraints Value of travel time in Euro • Further negative effects: • Increase of travel cost, flight plan, etc.

  19. Decreased competition at constrained airports Consequences of capacity constraints at airports Spill-over effects and thus leading to capacity constraints at further airports Demand is distributed among more airports, with small remote airports benefiting Conclusions Reduction of welfare for air travellers (e.g. increase of travel time)

  20. Contact: Dr. Marc Ch. Gelhausen DLR - German Aerospace Center Air Transport and Airport Research Linder Höhe 51147 Köln/Germany Marc.Gelhausen@dlr.de Tel: +49 2203 601 2463 Thank you for your attention

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