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Recommendations for the development of regional airports and regional airlines in China

author:Civil Aviation Resource Network
Recommendations for the development of regional airports and regional airlines in China

Column statement

This article is the fifth part of the column "Research on the Long-term Development of China's Civil Aviation", in which we think about the development of small and medium-sized airports and regional airports in a goal-oriented manner, and put forward the following suggestions:

1. At the macro level, the insufficient supply of coordinated airport time resources is equivalent to setting an upper limit on the development space of the regional market, and we suggest optimizing the market structure from the supply side, increasing the proportion of flight schedules of small and medium-sized airports and regional airports in coordinated airports, and increasing the proportion of flight schedules of regional aircraft in coordinated airports; In addition, it is recommended to launch a regional pilot project of "air and tourism integration" to explore the feasibility of designing cultural tourism products and planning the route expansion of the airport from the perspective of comprehensive transportation in the entire area.

2. At the airport level, it is recommended to plan the opening of the route network from the perspective of the airline market and the whole industry, and fully consider the business model of the airline; The opening of routes needs to consider the stability of route operation, and it is necessary to conduct a scientific and reasonable assessment of market demand and surrounding competition; It is suggested that airports should reasonably formulate a performance evaluation system for the implementation of route subsidy policies, including performance objectives, evaluation indicators, index assignment and evaluation methods, etc., so as to improve the efficiency of financial fund utilization. It is recommended to establish a sound data analysis system, grasp revenue data, OD data, comprehensive traffic data, passenger attribute data, etc., and establish a comprehensive transportation perspective, industry perspective, airline perspective, and passenger perspective. It is recommended to reasonably introduce capacity based on the principle of matching demand and capacity, make full use of the development opportunities of large-scale operation of domestic regional aircraft, and use regional aircraft to find a relatively advantageous market space under ground transportation competition.

3. At the airline level, it is recommended to find a good regional aircraft base and the corresponding route network construction strategy, and find a good balance between reducing base costs and improving the market coverage of regional aircraft, increasing daily utilization rate and improving efficiency. In addition to Xinjiang, Inner Mongolia, Northeast China and other border areas, it is difficult for other provinces and cities to have the possibility of opening large-scale "branch" routes and forming a network, and most of them will arrange the route network in the form of "point-to-point" or "stopover routes", which has higher requirements for the selection of overnight bases for regional aircraft. Due to the particularity of the flight range and route type operated by regional aircraft, it is suggested that the selection of regional bases should be different from that of trunk aircraft, and the routes should be arranged after determining the base after considering the airport benefits from the macro level, but first determining the possible routes and market benefits of regional aircraft, and then determining the location of regional bases according to the potential route combination.

Other articles in the column:

01

Why is it necessary to increase the proportion of time between regional airports and regional aircraft types at coordinated airports

First of all, let's look at the development goals of each entity from different perspectives: hub airports need to expand the scale of transit and build world-class aviation hubs; Small and medium-sized airports and regional airports need to further increase the scale of their business, increase aviation revenue and achieve sustainable development; Airlines need to improve the overall performance of their airlines, and domestic fleets need to increase daily utilization, reduce costs, and improve profitability.

In addition to domestic to international, the core of domestic = domestic transfer is to improve the radiation capacity of small and medium-sized airports and regional airports, and improve the effective transfer connection of trunk = branch flights. However, at present, the proportion of domestic flight schedules between small and medium-sized airports and regional airports is very small, and the time of coordinated airports is relatively saturated, and it is difficult to increase the number of small and medium-sized airports and regional airports, and the difficulty of regional airports to enter the core trunk airports tends to increase.

Small and medium-sized airports and regional airports can increase the scale of their business, and the destinations that can be selected can be divided into four categories. The first is the long-distance coordination of the airport, which has a certain travel demand, but the flight range is long, and it is necessary to use trunk passenger aircraft to fly, and the focus is to increase the time between the coordination airports; Second, long-distance non-coordinated airports, the demand for such routes is obviously insufficient, the feasibility of direct flights is low, and the economy of access through transit is strong; The third is the coordinated airport in the middle and short distance, the overall travel demand is large, but there is a strong substitution of ground transportation mode, and the use of trunk or regional aircraft can be considered according to the situation; Fourth, the non-coordinated airports in the medium and short distances, the travel demand is more scattered, and the ground transportation is facing a strong substitution, so the regional aircraft can be used to accurately open point-to-point flights in the cities where there is a need.

Recommendations for the development of regional airports and regional airlines in China

In order to increase the daily utilization rate of regional aircraft, the routes available are divided into three categories. The first is to coordinate the airport to and from the coordinated airport, but it is not economical to use regional aircraft, and there is a mismatch between demand and supply; The second is to coordinate airports to and from non-coordinated airports, and the core is to increase the proportion of non-coordinated time in coordinated airports; Third, non-coordinated airports travel to and from non-coordinated airports, which need to have strong travel demand, moderate flight distance, and weak ground transportation substitution, and the number of cities that meet similar conditions is limited.

Recommendations for the development of regional airports and regional airlines in China

Therefore, preliminary conclusions can be drawn. With the increasing number of small and medium-sized airports and regional airports, only by increasing the proportion of time in the coordination of airports can the business growth of small and medium-sized airports and regional airports be realized, and the transit capacity and transit cohesion of hub airports can be improved, and a relatively economical route network model can be realized, so as to effectively improve the daily utilization rate of regional aircraft and explore a more mature regional aircraft business model.

02

What will happen if the proportion of regional airports and regional aircraft types at coordinated airports is not increased?

With this conclusion in mind, let's think about another logic, assuming that if we do not increase the proportion of small and medium-sized airports and regional airports that coordinate airports, how will the market be oriented.

In the past, the domestic time increment of the main coordination airport was mainly allocated to airports with more than 10 million levels. For example, compared with 2019, 77% of the incremental time of the main coordination airport is allocated to more than 10 million destinations, a total increase of 24.9%, and the growth time of less than 10 million destinations accounts for 23%, a total increase of 22.9%. Because from the perspective of large-scale airports, the allocation of time to large-scale airports is conducive to maximizing time utilization and improving throughput; From an airline perspective, airlines tend to prioritize the time to occupy relatively busy airports for relatively better revenue, while serving as an important strategic resource reserve. This is an inevitable choice under the joint action of the previous model structure, market structure, development stage, market mechanism, etc., but the development stage of China's civil aviation is changing, and there are new changes in the model structure, airport structure, supply and demand relationship, etc.

Under the current market situation, if the incremental time of the main coordination airport is further concentrated in the trunk airport, it will lead to the following problems:

1. The increase in capacity on dry routes has led to oversupply and a decline in route operating efficiency, which is not conducive to improving airline performance. This time, assuming that the total peak hour capacity of each airport increases by 62, if 60% of the incremental time is allocated to the dry route, the average number of takeoffs and landings will increase by 4,680 per week, which is equivalent to an increase of about 10% of the capacity on the dry route.

2. Not increasing the proportion of time between regional airports and small and medium-sized airports is equivalent to setting a lower upper limit for the development of the regional market, and the gap between the business scale of trunk airports and regional airports will be further widened. The number of airports continues to increase, and regional airports lack the necessary time to support, making it more difficult to expand routes to and from large cities, and may even lead to the withdrawal of existing route capacity.

3. Regional airports cannot form economies of scale, route operations are unstable, it is difficult to get rid of the dependence on route subsidies, and subsidy competition leads to increased financial pressure, which is not conducive to improving the efficiency of capital utilization; The price of independent air tickets at regional airports is still high, filtering potential passengers, and airlines are unwilling to increase capacity investment, forming a vicious logical closed loop; The scale of airport business cannot be expanded, and regional airports have been operating at a loss for a long time, and sustainable operation and high-quality development are facing challenges.

4. The mismatch of resources between market demand, time supply and fleet capacity will exist for a long time, with more dry routes and less time on trunk routes, limited market space for branch routes, and limited route scheduling space for regional aircraft.

03 Comprehensive advice on the development of regional airports and regional aviation in China

To sum up, combined with the problems in the development of the regional market that we have raised in the previous article, we put forward suggestions at different levels for bureaus, airlines, and airports for you to discuss:

1. For the bureau, it is recommended to increase the proportion of flight schedules of small and medium-sized airports and regional airports at coordinated airports, and increase the proportion of flight schedules of regional aircraft types at coordinated airports. Due to the scarcity of time resources at the coordination airport, the time resources of the coordination airport is one of the core production resources of civil aviation transport (the time of small and medium-sized airports and regional airports is much less valued), and the supply-side reform is the implementation of market structure adjustment by the Civil Aviation Administration, reflecting the powerful measures and feasible ways of policy orientation. Personally, I suggest that, in addition to individual international hub airports, the proportion of small and medium-sized airpoints and regional airpoints should be increased to open up the market development space of small and medium-sized airports and regional airports, promote the construction of the mainland's "trunk branch and full network" route network, promote the construction of a more economical route network model in the mainland, and promote the coordinated development of the regional economy; It is recommended to increase the proportion of regional aircraft in the time of coordinating airports, so as to provide more space for regional aircraft to operate "trunk and branch routes", so as to achieve market demand, time supply, and fleet capacity matching (some trunk and branch routes have average operating efficiency, and the total cost of trunk aircraft is relatively higher). However, the specific mechanism for achieving this result involves the provisions of the time management method, which needs to be further refined.

2. For bureaus and local governments, it is recommended to launch a regional pilot project of "air and tourism integration". The cultural tourism industry is one of the key levers for the prefecture-level cities where regional airports are located to achieve dislocation development and complementary advantages with the central cities. The integrated development of regional aviation and tourism is a necessary measure to avoid the further siphoning of prefecture-level cities and promote the coordinated development of regions. For regional airports, the support of local tourists for the civil aviation market is limited, and expanding the scale of the tourism market for foreign tourists is not only the development goal of the local tourism industry, but also the core way of the development of most regional airports. It is suggested that the bureau and local governments should try to pilot the regional pilot of "air and tourism integration" to explore the feasibility of designing cultural and tourism products and planning the route expansion of the airport from the perspective of comprehensive transportation in the entire area, so as to alleviate the problems of insufficient passenger source and homogeneous competition at the airport. Taking data as the core element of civil aviation and tourism market management, based on the collection, investigation and analysis of tourism data, as well as the mining and inventory of tourism resources, a series of highlight products that attract tourists are planned.

3. Facing the airport. First, from the perspective of the airline market and the whole industry, the opening of the route network should be planned, and the business model of airlines should be fully considered, for example, some countries will establish common market interests and strategic goals by attracting airlines to invest in the local cultural and tourism industry; Second, the opening of routes needs to consider the stability of route operations, and it is necessary to conduct a scientific and reasonable assessment of market demand and surrounding competition, so as to avoid ineffective investment of resources, and also avoid a large number of existing routes being shut down and new routes to obtain subsidies; Thirdly, considering the imminent reform of the fiscal and taxation system, it is suggested that the airport should reasonably formulate a performance evaluation system for the implementation of the route subsidy policy, including performance objectives, evaluation indicators, index assignment and evaluation methods, etc., so as to improve the efficiency of financial fund utilization. Fourth, establish a sound data analysis system, grasp revenue data, OD data, comprehensive traffic data, passenger attribute data, etc., and grasp a more comprehensive comprehensive transportation perspective, industry perspective, airline perspective, and passenger perspective through data, so that the route can open general data to speak, rather than relying on feelings to speak, the subsidy mechanism and subsidy strength are reasonable and well-founded, so as to grasp and understand the characteristics of passengers' needs, and make market strategies and decisions; Fifth, fully study the economic characteristics of regional aircraft, the synergy between regional aircraft and market development, the bigger the model is not the better, it is recommended to reasonably introduce capacity with the principle of matching demand and capacity, make full use of the development opportunities of large-scale operation of domestic regional aircraft, and use regional aircraft to find a comparative advantage market space under ground transportation competition.

4. For airlines. It is recommended to find a good regional aircraft base and the corresponding route network construction strategy, and find a good balance between reducing the base cost and improving the market coverage of regional aircraft, increasing the daily utilization rate and improving the efficiency. In addition to Xinjiang, Inner Mongolia, Northeast China and other border areas, it is difficult for other provinces and cities to have the possibility of opening large-scale "branch" routes and forming a network, and most of them will arrange the route network in the form of "point-to-point" or "stopover routes", which has higher requirements for the selection of overnight bases for regional aircraft. Due to the particularity of the flight range and route type operated by regional aircraft, it is suggested that the selection of regional bases should be different from that of trunk aircraft, and the selection of regional bases should not be prioritized by considering the airport benefits from the macro level to determine the base and then arrange routes, but priority should be given to determining the possible routes and market benefits of regional aircraft, and the location of regional bases should be determined according to the potential route combination.

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Recommendations for the development of regional airports and regional airlines in China

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