DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE

Air Route Development: A survey of current practice and participation of the nations

SUBJECT

AIR AND SPACE LAW

NAME OF THE FACULTY

Mr. JOGI NAIDU

Name of the Candidate

Roll No.

Semester

ALLU. SAI SARAYU

“2018007”

SEMESTER- 7
ACKNOWLEGMENT

I would like to extend my heartfelt thanks to my faculty Mr. JOGI NAIDU SIR , for his constant support
and guidance without which this project would not have been successful despite my efforts.

Also my sincere thanks to Damodram Sanjivayya National Law University, Sabbavaram for providing me
with all the necessary sources and perfectly guiding me in the preparation of my project
TABLE OF CONTENT

ABSTARCT

INTRODUCTION

OBJECTIVE OF ROUTE DEVELOPMENT

IMPORTANCE OF ROUTE DEVELOPMENT

AIR ROUTE DEVELOPMENT SYSYTEM

IMPLEMENTING NEW ROUTES

DIFFERENT ROUTING PATTERNS

AMENDMENTS

CONCLUSION
ABSTARCT

To develop air services and in many cases tourism flows, airports focus their marketing effort on
airlines through a process known as route development. Whilst route development is a well-
known concept within the airport industry it has received limited attention in academic or
industry literature. As a result little knowledge is shared about why airports use route
development, what are the most common methods and what is the general level of involvement.
To fill the gap, this paper investigates airport route development practice using an online survey
of 124 airports worldwide. Findings show that the vast majority of airports are actively involved
in route development for a range of objectives and that the process and level of involvement is
extensive, although this often depends on airport size, location or ownership. Results are
particularly relevant to airports that are less advanced in route development activities and also
those seeking to debate route and tourism development strategies with stakeholders.
INTRODUCTION :-

“Airports were traditionally considered to be public utilities, and focused largely on facilitating
the safe and efficient movement of aircraft and passengers rather than commercial
considerations. Airport operators adopted a fairly passive approach to marketing, doing relatively
little to encourage customers to use their services. However, in many parts of the world, airports
have become more commercially orientated. This, combined with airline liberalization in many
markets, has led I much more sustainable market for airports. As a consequence, at many
airports, marketing has become a central practice, but one which is considered vital for success

Air connectivity is hugely significant not just for tourism development but the economy of a
country in general. According to Oxford Economics visitors arriving by air contribute over 12
billion a year to the tourism industry, generating a further 170,000 jobs;

Route development is now a well-known concept within the airport industry, and has been
accompanied by a growing number of specialist route development consultants. Surprisingly, it
has received limited attention in academic or industry literature. This
means that little knowledge is shared about why airports use route development, what are the
most common methods used, and what resources airports dedicate to it. To fill the gap, this
research investigates airport route development practice based on the findings
of an online survey of 124 airports worldwide. The findings can be used by airport management
to further develop their own route development strategy and to learn from best practice. Whilst
many airport stakeholders can be involved with route development such as regional economic
development agencies, destination management organizations or tourism authorities, and
Chambers of Commerce or other business associations, the focus of this research is on the airport
operator's use of route development.

THE OBJECTIVE AIR ROUTE DEVELOPMENT

Route development has been explained in a number of ways. define it as the “marketing
activities undertaken by airports with the aim of attracting new routes, for example through
participation in route development conferences1, offering incentive schemes, meetings with
airlines, producing bespoke reports for airlines”. Martin states that it “includes the attraction,
initiation, expansion, retention, or any improvement of air service and can include changes in
pricing, frequency, capacity, hub connectivity, or the number of nonstop destinations served”.
These two descriptions demonstrate the wide ranging nature of route development, both in terms
of its objectives and the methods used. This is not fully apparent with the name itself which
arguably suggests a somewhat narrower and simpler approach. The most obvious objective of
1
Thelle et al. (2012, p. 81)
route development is to encourage new airlines to an airport to operate new routes. Indeed,
Kramer, Fowler, Hazel, Ureksoy, and Harig identify the air service development cycle where
new services grow the traffic, which in turn makes the market more attractive and attracts more
services. However, in reality, route development can have a number of different purposes
including attracting new routes with new airlines, but also growing existing routes, attracting
new routes with existing airlines, retaining existing routes and influencing change to existing
routes (e.g. lowering fares, changing schedules, reducing seasonality, upgrading aircraft)
“Whatever the targets be for the creation of airport routes, they have to be reasonable in terms of
the demand that can be created at the airport, the facilities and services offered at the airport, and
the availability of airlines that are willing and able to operate the proposed services'”

THE IMPORTANCE OF ROUTE DEVELOPMENT

Air connectivity is hugely significant not just for tourism development but the economy of a
country in general. According to Oxford Economics visitors arriving by air contribute over 12
billion a year to the tourism industry, generating a further 170,000 jobs; Clearly, air route
development is important for tourism but also the wider economy.2
Airline route development or route planning serves as a significant role to airline industries which
has been analyzed and evaluated ideally and carefully to calculate cost and determine the benefit to
double ensure that it will increases the profitability of airline schedules. Significant factors must
been taken into consideration when an airline is planning to add new routes or cities to its existing
network in order to find an appropriate new route successfully and ensure maximum effective
profitability. Such factors may including current route competition and market demand, examine
the capabilities of airports, forecast of market stimulation, economic trend of airline expected
catchment area, market share cannibalism and airline strategy.

Proper development of air routes and good effective air connectivity enables flows of trade,
investment, labour, knowledge and tourists that ultimately support economic growth by
providing new opportunities, improving productivity and increasing competition. These benefits
can then extend directly and indirectly across all sectors of our economy

AIR ROUTE DEVELOPMENTS SYSTEM :-

“In favor of airport development in the direction of draw innovative services, route construction
is an important feature. It is also a central airline planning feature aimed at extending airspace
network and/or moving resources to better possibility

2
Airport route development: a survey of current practice Halpern, N. and Graham, A. , Tourism Management, 46,
p. 213-221
Route development is an essential function for airports planning to attract new services. It is also
a core function of airline planning that aims to expand airspace networks and/or shift resources
to better opportunities.

Planning new routes between airports

Route planning is the process of identifying and evaluating the feasibility new routes for
airport by a given airline. Recently, some numbers have been shared on the success rates of new
routes. This rate is defined as the percentage of newly developed routes that remain in service
one or two years after inauguration. As this rate increases, it indicates that the airline has the
capability to properly anticipate new route performance in the short term. One would expect that
this rate is on the high side, given that most airlines deploy internal and external consulting
resources to study route feasibility before their deployment. Unfortunately, this has not been the
case.

Implementing a new route

Based on the demand and revenue estimation, and on fleet type availability, the flight frequency
and seat capacity can be determined. Accordingly, cost estimation can be performed – crucial for
route implementation.

This cost typically includes terminal fee, gate-use fees, rental fees, landing fees, cost per
enplaned passenger (CPE), fixed-base operator (FBO) charges, and charges for other services.
Given the estimated revenue and cost of the route, the calculation of profit margin is
straightforward. It should be noted that while the route could be profitable, an airline might
decide not to consider it at the current time, if they believe there are other routes that could yield
higher profit margins.

Implementing a new route, in most cases, requires additional attention and support to make sure
that the new route is meeting the planning expectations. In the early phases of the route
implementation, it becomes important to observe the route performance including fares, trend of
bookings by time and point of sale, customers feedback on service, media coverage, response of
competing airlines, and feedback from sales agents.  

As needed, adjustment in service pricing might be required to attract and stimulate demand as
needed. Airlines 3should be ready to respond to any competitive actions from competing airlines
such as sales campaigns or capacity increases. 

3
The practice of airport and airline route development. Ahmed Abdelghany, Ph.D., Associate
DIFFERENRT ROUTING PATTERNS

. There are three major types of routing patterns:

The Hub and Spoke System

In situations where the volume of traffic is sufficient, the hub and spoke routing system that is is
widely considered to be the most satisfactory and effective pattern. The hub and spoke involves
the operation of non-stop direct flights which lead to low operating costs (McShan & Windle,
1989). The absence of intermediate stops may result in high passenger load factors. If this is
case, it would be easy to match the capacity with demand.

The hub and spoke philosophy suggests that the airline can operate services more frequently
between hubs, as it could feed traffic into the hubs from the spokes, and vice versa. The main
advantage for the passengers is access to a traffic system with many and frequent departures to
various destinations. The hub and spoke method has been adopted by many airlines, but
particularly in the United States. There, it has been developed in order to expand the number of
routes from central hubs, like Chicago, Detroit, Denver, etcetera

The Triangular System

In a triangular system, there may not be enough traffic from the outlying points B, C, D and E to
absorb the total aircraft capacity4. For this reason, it may be necessary for the airline to combine
two or more points on one service. This routing pattern produces the triangular pattern, as
illustrate figure A

This routing may also allow the airline to enhance its frequency to higher levels. The triangular
pattern could be feasible if particular carriers would make use of larger capacity aircraft.

Linear Pattern

The linear pattern involves the acquisition Airline Schedules Planning and Route Development
13 or use of Fifth freedom rights and a combination of Third / Fourth and a Fourth / Third
freedom rights.

4
Airline Schedules Planning and Route Development
This routing pattern may result in high operating costs. The combination of different points in the
same service could make it difficult for the airline to match traffic and capacity over the different
sectors. This issue may lead to lower load factors. On the other hand, it may enable airlines to
provide services to major destinations since they are transporting passengers from more than one
originating point. In such a situation, the airline has the ability to board and land passengers at
different points along the route.

AMENDMENTS OF AIR ROUTE DEVELOPMENTS IN INTERNATIONAL LEVEL

•With that imminent air traffic as well as travel trends both foreseen and not, airlines, aircraft
manufacturers, airports, and governments in short, the entire aviation industry face new
challenges .

•The most pressing is how to prevent a doubling in air traffic from doubling the environmental
impact of air travel in the coming decades. Discussions and proposals had been under way for
years, when, last October, 68 countries whose air traffic comprises nearly 90 percent of
international aviation signed on to the Carbon Offsetting Reduction Scheme for International
Aviation (CORSIA)”.

•Put forward by the International Civil Aviation Organization part of the United Nations
CORSIA is a statement of intention to achieve carbon -neutral growth, starting as early as
2022, with 2021 levels as the baseline. In other words, in the years beyond 2021, emissions
would remain capped at 2021 levels, with gradual changes that can vary from country to country
in order to account for unique circumstances, including the needs of developing markets”.

•CORSIA will operate by exchanging emission "units," a form of market for carbon
commodities. Thus, though aviation growth would be "carbon neutral" in principle, that can also
be accomplished by reductions in Carbon dioxide emissions in several other fields instead of
straightforwardly in airspace.”

•Climate change aside, airlines and plane manufacturers have another reason to keep their
emissions low cost. More carbon emissions are the result of higher fuel consumption. Lower fuel
consumption and airlines will see higher profit margins.5

•“Fuel, says Sean Newsum, Boeing’s director of environmental strategy, “constitutes somewhere
from 30 to 40 percent of an airlines typical operating costs'.

5
The practice of airport and airline route development, Ahmed Abdelghany, 2017
CONCLUSION

This paper offers a much needed review of practice of airport route development because while
route development is well known term with in the airport industry, there has been little study on
the subject in academia or industry. This paper shed some light on the priorities of airport route
growth, the most common approaches used, and the general level of participation through the
results of an online survey of 124 airports world wide.

The vast Majority of airports are now actively involved in route creation and that the process and
degree of involvement is usually very comprehensive, although this also depends on the
characteristics of the airport, such as its size, its geographical location and the way it operates.
The strategic focus of the airport and the market climate under which the airport operates are also
likely to rely on it”.
“The observations lead to both the difference in the body of knowledge, but they can also be
used by airport management to further improve their own route development strategs and to
learn from industry best practices.6 This would be particularly relevant for airports which is
much less developed in abnut then route planning operations. lt will also be applicable to airports
looking to address route regarding tourist strategies through the investors
“Some of the findings found in the survey are very helpful and will definitely assist airports in
their internal discussions about how they coordinate and handle their route creation operations. lt
is also beneficial during strategic discussions to be explained to the shareholders of airports”.
“Up until comparatively recently, route development was primarily considered to be an airline
function, and airports largely responded to requests from airlines rather than proactively seeking
their business. Few airports practiced the art of route development .This analysis describes that
airports having obviously reached a new phase in the field of route development focused on
intellectual ability and focused and amazing services, specifically own sales, and an increasing
and committed team of airport route development staff. This relatively new area of airport
management is likely to spread and continue to evolve as more airports worldwide seek to
develop their provision of air services and expertise in route development.

6
Halpern & Graham (2015) TM