Many of the world’s largest hubs continue to experience significant gains in passenger traffic. While there were 18 airports with over 40 million passengers per annum (mppa) in 2007, this number had risen to a total of 50 airports by 2017. While increased urbanization has certainly fueled this trend especially at hubs located in emerging markets and developing economies, the growth also comes from years of consolidation, hubbing strategies, and capacity discipline by many of the major legacy carriers. One of the upshots of this trend has been an overall reduction in the number of airlines operating in certain markets such as North America, Europe, and Latin America. Many industry pundits have shown that this has created greater airline-market concentration and that the reduced competition is a symptom of the airline mergers which have occurred. The increased hubbing strategies by carriers has also meant that smaller airports (typically those that have fewer than 1 mppa) saw a reduction in air service over a decade.
However, a recent trend has seen passenger-throughput grow not only at the largest hubs but also at smaller secondary airports across markets. In other words, although airports with greater than 40 mppa—mega-hubs—continue to see traffic gains, mid-sized airports are experiencing the largest increases.
There are several reasons for the passenger traffic increases. Market potential for mid-sized hubs and smaller regional airports has improved due to population increases in their catchment areas, mostly communities outside major cities. This has also increased airport competition, with smaller mid-sized airports offering lower user charges to attract carriers. Another reason is that despite the wave of airline consolidation, the low-cost carrier market has helped tilt the scale towards greater competition among carriers, with LCCs establishing operations at secondary or mid-sized airports. Carriers such as Allegiant, Frontier, Spirit and JetBlue have been especially aggressive in the U.S. market context expanding to smaller airports, with Southwest Airlines expanding capacity internationally. United Airlines, an American Legacy carrier, has bucked the earlier trend and has also followed suit expanding domestically to smaller airports. Traffic has gone up significantly at these airports in a relatively short period of time. Some smaller airports that have experienced double-digit growth in 2018 include:
A similar phenomenon is also evident in Europe, where LCCs initially focused on secondary markets. This is apparent in markets like Spain, among others, where smaller airports with at least 5 million passengers per annum experienced double-digit growth in a single year. As well as making under-served routes profitable, major European LCCs such as Ryanair, easyJet and Norwegian have blurred niche markets by growing their capacity quickly and extending their networks to offer flights between secondary airports and major hubs. Norwegian, considered a pioneer in the long-haul low-cost market, now offers nonstop service between Austin-Bergstrom International Airport (AUS) and London Gatwick Airport (LGW). This has helped propel the growth of AUS in 2018.
This question is hard to answer, and the answer varies by market context. Several regional definitions exist as to what constitutes a mid-sized airport or a secondary airport. For instance, according to the U.S. Federal Aviation Administration, airports that have between 0.25% and 1% of overall U.S. traffic are classified as medium-sized hubs. Secondary airports, a related term, is used to describe airports that are under-used compared with much larger hubs or primary airports. The recent surge in passenger traffic gains at mid-sized and secondary airports suggests that a number of airports may no longer fit these definitions. Based on ACI’s classification for the presentation of data by airport size, the category of medium-sized airports typically includes airports which handle somewhere between five million and 25 million passengers per annum.
The year 2017 was marked by rapid rises in passenger traffic at midsized hub airports in all regions of the world. Chart 1 shows that airports in the 5-15 million (smaller mid-sized hubs) and 15-25 million (larger mid-sized hubs) passengers per annum ranges saw passenger throughput grew by 10.2% and 8.9% respectively. These two categories of airports contributed 43% of the entire global traffic increase from 2016 to 2017. Global growth in total passenger traffic was 7.5% in 2017.
In many parts of the world, and especially in the emerging markets of Asia-Pacific, airport operators face capacity constraints which have intensified bottlenecks, flight delays and safety risks. With ACI’s medium-term forecast showing global passenger volume growing 30% from 2017 to 2022, many national governments are facing predicaments in which surges in air transport demand are outstripping available airport infrastructure. In the short term, smaller regional airports have been important in alleviating these rapid surges in demand. The airport network model is a classic example of being able to redistribute traffic efficiently. Important economic synergies are generated between smaller airports and larger airports within a network. Indeed, small airports and airlines act as catalysts in feeding traffic into hub airports for onward journeys to other major national and international destinations. When a larger airport in a network faces capacity constraint, the network’s smaller airports generate traffic that ensures the larger airport’s sustainability, resulting in improved load factors and optimal aircraft utilization by airlines.
In 2017, mid-sized hubs and smaller regional airports saw the greatest gains in passenger traffic, especially in Asia-Pacific and Europe. Chart 2 shows the significance of the growth of the smaller airports. While smaller airports are starting from much lower bases for comparative-growth purposes, they are making sizable absolute gains in passenger throughput. Collectively, airports with more than 1 mppa and less than 25 mppa contributed 57.7% and 60.7% of all passenger-traffic growth for Asia-Pacific and Europe respectively in 2017.
The above article is an adapted excerpt from last year’s 2018 edition of the World Airport Traffic Report. For more detailed analysis and insights on air transport demand, view ACI’s suite of products. With comprehensive data coverage for over 2,500 airports in 175 countries worldwide, ACI’s World Airport Traffic Report remains the authoritative source and industry reference for the latest airport traffic trends, rankings and data rankings on air transport demand.