Journal of Air Transport Management 17 (2011) 116e119

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Journal of Air Transport Management

journal homepage: www.elsevier.com/locate/jairtraman

Modelling the effects of capacity constraints on air travellers’ airport choice

Marc C. Gelhausen*
German Aerospace Center, Institute of Air Transport and Airport Research, Linder Hoehe, 51147 Cologne, NRW, Germany

a b s t r a c t
Keywords: This paper analyses the effects of limited capacity on air travellers’ airport choice. The analysis is based
Airport capacity constraints on a market-segment specific airport choice model that accounts for limited capacities. The region of
Airport choice
Stuttgart in Germany serves as a case study to examine the impact of limited airport capacity on air
Discrete choice model
travellers’ airport choice. Air travellers’ choice depends on the supply of flights and accessibility of the
airports in their choice set as well as on their preferences and willingness-to-pay. To elaborate the effects
of limited airport capacity, scenarios relating to the capacity situation at airports serving the air travel
demand of the Stuttgart region are analysed. This paper reveals the mutual dependence among airports.
Capacity constraints at one airport cause spill-over effects and thus influence air travel demand served at
other airports. In some cases this may even lead to new capacity constraints elsewhere.
Ó 2010 Elsevier Ltd. All rights reserved.

1. Introduction
Over the next 20 years global revenue passenger kilometres by
air are forecast by the aircraft industry, to increase by about 5% per
year, and between 4% and 5% in Europe (Airbus, 2007; Boeing,
2008). Eurocontrol (2008) expects the number of flights to
increase at an annual rate of 2.2%e3.5% in Europe until 2030,
depending on the future development of various political, envi-
ronmental and economic factors.
Capacity constraints already exist at many airports and are likely
to become increasingly important for the future development of air
transportation. Efforts to physically ease these constraints, and
in particular, adding new runways, take time to implement. In
several European countries, adding runway capacity has become an
almost insurmountable task at many airports, in the face of
concerns over local noise levels and access congestion. Alternative
air traffic management measure such as night curfews and noise
and emission limits can reduce these adverse environmental effects
but only at the cost of lessening the economic efficiency of the use
of the capacity.
If available capacity is less than the demand at the prevailing
prices at an airport, this impacts on the airport choices of air
travellers. We take as a benchmark here the number of travellers
who would use an airport that is uncongested. When there is
congestion, travellers may opt for a flight at another airport where
there is less congestion. In many cases people assume that services
always operate as scheduled; in other words at the prevailing prices
there are no delays due to capacity issues.
There are two factors that affect air travellers with regard to
binding capacity constraints at airports:

Travel disutility relates to the effort required by air travellers to
reach their departure airport. These efforts are significantly less
in a decentralised airport environment with good road and rail
access to airports than in a more centralised configuration with
a lack of suitable alternative airports in a given choice situation.

Whether airport capacity is expandable or not within a
comparatively short time horizon depends on a number of
specific factors including geographical, political, ecological and
economic variables.
As a consequence, there are three basic future possibilities
relating to constraints:

If the travel disutility experienced by an air traveller is high and
capacity expansion is possible, airport capacity expansion is an
option over, at least, the medium time horizon.

If travel disutility is low and capacity expansion is not possible,
some travellers might choose a neighbouring airport.

If both travel disutility is high and capacity expansion is not
possible, demand is reduced and local travel growth restricted.

* Tel.: þ49 2203 601 2463; fax: þ49 2203 601 12463. Germany has a dense network of airports and, therefore, the focus
E-mail address: marc.gelhausen@dlr.de. here is on the second case, where the capacities of neighbouring

0969-6997/$ e see front matter Ó 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jairtraman.2010.11.004
 M.C. Gelhausen / Journal of Air Transport Management 17 (2011) 116e119
airports absorb overflows in air travel. The model, however, can apply
to both an airport system that has sufficient aggregate capacity as
well as one with an aggregate capacity shortage.
2. Modelling capacity constraints in airport choice
The methodology adopted employs a nested logit model
(McFadden, 1974) making use of the following choice attributes:

Access cost, access time and access frequency by, for example
car, taxi, bus, or train.

Accessibility to public transport modes at the trip origin

Access to the airport terminals from parking areas, bus and taxi
stops and train stations

Degree of competition on non-stop flights defined by the
number of airline alliances and independent airlines serving
the same origin and destination.

Existence of non-stop flights and their weekly frequency to the
chosen destination for all flights and specifically for low-cost
flights.
The congested airport choice model approach is to seek to
minimise the loss of the personal welfare of an air traveller caused
by limited airport capacity, assuming, that air travellers adapt to
capacity limits in an economic and rational manner. Thus, the
nature of capacity constraints is integrated into individual choice
behaviour. The main data source for model estimation is the
German Air Traveller Survey (Wilken et al., 2007), which is con-
ducted periodically. About 200,000 passengers are interviewed at
international, and some regional, airports in Germany.
The loss of any air traveller’s welfare depends on the relative
attractiveness of the alternatives in the available choice set, i.e. the
set of possible departure airports. Perceiving alternatives as less
attractive means personal welfare is lower when they have to be
used. However, his loss of personal welfare also depends on the
challenges of accessing and flying from each airport including air
fares. Individuals’ equilibria exist when the necessary efforts to
depart from any airport are equal to the loss of welfare from using
another, less attractive airport.1 It is not possible, therefore, for an
air traveller in equilibrium to increase overall welfare by either
increasing additional efforts and depart from a favoured airport, or
reduce effort and depart from a less favoured airport.
Willingness-to-pay, and airport choice vary according to such
things as the purpose of trips and the characteristics of the traveller.
Market segments are categorised as;

Trips to domestic destinations, either for leisure (DOM L) or
business purpose (DOM B)

Trips to European destinations for private purposes according
to whether they are short-stay (EUR S) or for holiday (EUR H)
reasons.

Trips to European destinations for business reasons (EUR B)

Trips to non-European destinations, either for private (INT L) or
business purpose (INT B)
Table 1 shows the average ratios of willingness-to-pay by
market segment (‘Ratio WTP’), which has been estimated using the
1
Although, of course, in a world with efficient pricing, the prices charged at the
constrained airport would be higher to reflect this constraint and those at the
facility with excess capacity would be lower to reflect this. The differential would,
following simple Wardrop principles, lead to utility being the same for travellers at
both airports. It is axiomatic in this analysis that the airport authorities are not
adopting standard pricing principles at their facilities.
117
Table 1
Ratios of willingness-to-pay by market segment.
Market segment Ratio WTP
DOM L 0.06
DOM B 0.37
EUR S 0.05
EUR H 0.05
EUR B 1.00
INT L 0.19
INT B 0.22
German Air Traveller Survey. The values are normalised on unity 1
for the European business travel segment to aid clarification.
We see that if ticket prices were increased to account for the
capacity constraint at an airport in any given choice situation, the
rise would be about 20 times higher for a business traveller to
a European destination than for a short-stay traveller to a European
destination. These are in effect points on an indifference curve
indicating the comparable levels of welfare for either paying
a higher price and using a more convenient airport, or paying
a lower price and using a less attractive one in terms of service;
perhaps less favourable schedules or worse land access.
The table shows that business travellers are more inclined than
leisure travellers to undertake additional efforts to depart from the
better-served airport by paying higher prices. The market segment
is willing to pay a higher price to use the potentially congested
airport; leisure travellers are more frugal in their willingness-to-
pay. Further, intercontinental air travellers are more prepared to
pay higher ticket prices than choose a less well served different
airport possibly because of the restricted set of viable alternatives,
in this case large airports, and overall cost of such a journey. Busi-
ness travellers exhibit a greater willingness-to-pay because of their
higher valuation of travel time-savings, and there is evidence that
they prefer direct services from major hub-airports for this reason.
3. Analysing airport choice in the Stuttgart region
3.1. Study scope
The region of Stuttgart in Germany is taken as a case study
where there is constrained airport capacity but where there are
also large airports relatively close by. Stuttgart airport (STR) is about
13 km (about 15 min by car) from the centre of Stuttgart with the
airports at Frankfurt (FRA) and Munich (MUC) 197 km (about two
hours by car) and 237 km (about two and a half hours by car) away.
There are some regional airports like Friedrichshafen (FDH,
202 km), Karlsruhe-Baden (FKB, 106 km) and Nuremberg (NUE,
226 km) in the vicinity. However, they only serve a small fraction of
the air travel demand of the Stuttgart region. All airports are at least
accessible by urban railway. Frankfurt, however, is the only airport
with direct high speed rail access by the Intercity Express (ICE).
Travel time from Stuttgart central station to Stuttgart airport is
27 min, and to Frankfurt airport about 100 min. Accessing the
remaining airports by rail is a rather unattractive alternative due to
the lack of direct high speed access.
Stuttgart is a German region with high traffic volumes - partly
due to the large number of businesses located there. About 85% of
air travellers starting trips from the region depart from Stuttgart
airport that in 2009 handled 8.9 million passengers and 125,486
flights (ADV, 2009). The airport has a single runway with a declared
capacity of 42 movements per hour. The 30th peak hour is 40
movements per hour and the 5% peak hour is 32 movements per
hour. It has sufficient capacity to meet existing demand at the
prices being charged, but the situation may change as traffic grows;
118 M.C. Gelhausen / Journal of Air Transport Management 17 (2011) 116e119
it already has 40 movements for one hour on weekdays. Addi-
tionally Frankfurt Main airport is close to its daytime capacity but
an additional runway is to be expected in the next few years.
Munich airport hits capacity limit during peak hours but, otherwise
has sufficient capacity.
Three destinations are used to analyse airport choice by market
segment:

Dusseldorf (DUS) for domestic air trips

London (LHR) for European air trips

New York (JFK) for non-European air trips
Flight plan data is from Official Airline Guide (2009) covering
Frankfurt, Munich, Nuremberg and Stuttgart airports that offer
non-stop services to Dusseldorf; of which only Frankfurt has
no low-cost services. Frankfurt, Munich and Stuttgart provide
non-stop services to London, with the flight frequency being
significantly higher from Frankfurt and Munich, than from Stutt-
gart. Non-stop flights to New York are only available from Frankfurt
and Munich airports.
3.2. Impact of airport capacity constraints on passengers’ airport
choice
Fig. 1 shows the market served by the airports in the Stuttgart
region relative to what Stuttgart airport is able to serve. A value of
100% on the y-axis is the traffic of the Stuttgart region to Dusseldorf,
London and New York; the sum of all market segments. The
“demand potential” of Stuttgart airport is defined as the number of
air passengers who actually depart or would depart from this
airport if there were no capacity constraints. For example, a value of
90% on the x-axis means that Stuttgart airport is only able to serve
90% of potential demand at current prices; leaving the remaining
10% to use alternatives. A value of 100% corresponds to a scenario
without any capacity constraints. Frankfurt airport is assumed to
operate at its capacity and, thus, cannot absorb any surplus from
Stuttgart. All other airports are assumed to have spare capacity to
cope with the excess. The market share of Stuttgart airport
90%
80%
70%
Market share per airport
60%
50%
40%
30%
20%
10%
0%
100% 95%
Share of demand potential Stuttgart airport is able to serve
Frankfurt
Fig. 1. Market share by airport in relation to unsatisfied demand potential at Stuttgart airport.
decreases from about 85% in the case of no capacity constraints, to
43% if the airport can only handle 50% of its potential traffic with
the excess primarily served by Munich airport. Its market share
rises from 3% to a maximum of 38% if Stuttgart airport can only
handle 50% of its potential traffic. The traffic share of Karlsruhe-
Baden, Friedrichshafen and Nuremberg varies between 1% and 10%
depending on the capacity constraints of Stuttgart and increase
only a little as these capacity constraints tighten. The main reasons
for this are their remote locations and lack of non-stop flights.
However, if both Frankfurt and Munich airports were at their
capacities, and could not absorb surplus traffic from Stuttgart
airport, then the market share of Karlsruhe-Baden airport would
rise from 3% to a maximum of 40%. If Stuttgart airport can only
handle 50% of its potential traffic the market shares of Nuremberg
and Friedrichshafen airports would stay roughly constant.
The results are as one would expect. There is a distinct ranking
of the airports in terms of attractiveness from the point of view of
air travellers from the region. The more an airport suffers from
capacity constraints, the more remote airports, and those with
a less attractive flight schedules, benefit. Moreover, airports that do
not initially suffer from a capacity shortage, but are already oper-
ating near their capacity, may become capacity constrained as
traffic diverts.
Turning to the different types of air traveller, Fig. 2 shows that it
is leisure passengers, especially those travelling to Dusseldorf and
London, that are crowded out if capacity shortages at Stuttgart
airport increase. If the airport can have only less than 55% of its
potential traffic, almost no leisure passengers travelling to Dussel-
dorf and London choose it. By comparison, in a situation without
capacity constraints virtually all of them depart from Stuttgart
airport. Likewise, the share of leisure passengers travelling to New
York who use Stuttgart airport falls from 51% to 7%. The sharp
decline in the shares at Stuttgart airport is a result of an unwill-
ingness to pay, combined with the availability of an attractive and
non-congested, alternative airport; Munich airport is situated
further away than Stuttgart, but there are almost three times as
many non-stop flights and twice as many low-cost flights to Dus-
seldorf and more than twice as many non-stop flights to London.
90% 85% 80% 75% 70% 65% 60% 55% 50%
Munich Stuttgart Friedrichshafen Karlsruhe-Baden Nuremberg
 M.C. Gelhausen / Journal of Air Transport Management 17 (2011) 116e119 119

100%

90%

Market share of Stuttgart airport 80%

70%

60%

50%

40%

30%

20%

10%

0%
100% 95% 90% 85% 80% 75% 70% 65% 60% 55% 50%

Share of demand potential Stuttgart airport is able to serve

DOM L - Dusseldorf DOM B - Dusseldorf EUR S - London EUR H - London
EUR B - London INT L - New York INT B - New York

Fig. 2. Market share of Stuttgart airport by market segment in relation to unsatisfied demand potential.

Non-stop flights to New York, however, are only available from
Munich and Frankfurt. Finally, the assumption that Stuttgart airport
will only be able to serve half of its potential traffic is rather unre-
alistic, at least for the near future. This assumption serves only to
show the underlying mechanism and, thus, underlines the effects of
limited capacity on passengers’ airport choice by market segment.
Business travellers generally exhibit a higher willingness-to-pay
than leisure travellers and their airport choice depends, more on
a lower access time and the availability of an attractive flight
schedule, than on lower ticket fares. Their airport choices, there-
fore, remain comparatively stable in the light of capacity cons-
traints at Stuttgart. The share of business travel to Dusseldorf and
London, departing from Stuttgart airport, remains well above 90%,
and intercontinental business travel to New York using stop-over
flight is reduced from 81% to 45% because there are more non-stop
flights from Munich to New York.
The segment-specific market shares from Munich are almost
inversely related to Stuttgart airport. Munich absorbs virtually the
whole surplus traffic from Stuttgart airport (Fig. 1) because of the
ready availability of non-stop flights, and because Frankfurt is
already operating at its capacity. The distribution of passengers
from Frankfurt does not vary much with regard to any capacity
shortage at Stuttgart. The majority of passengers from the Stuttgart
region departing from Frankfurt travel to New York or London and
this does not vary much with regard to the capacity of Stuttgart
airport.
4. Conclusions
Under a decentralised airport system, capacity constraints do
not just affect the airports that have the most severe constraints but
also lead to spill over effects and changing demand patterns at
other facilities. As congestion builds up at one airport, others
previously less attractive because of their locations or their flight
schedules, may take more traffic. The extent of crowding-out of
passengers at airports with a capacity shortage depend on their
willingness-to-pay, and the availability of attractive alternative
airports. The study confirms that leisure passengers usually exhibit
a lower willingness-to-pay than business travellers and are crow-
ded out.
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