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

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. Possible consequences of capacity constraints at airports Travel Disutility Airport capacity fixed? Low YesHigh / No Airport capacity expansion Re-assignment of demand Mixed strategy Restricted growth of demand e.g. DUS e.g. HHN e.g. MGL e.g. HOQ 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. Airport system in Germany – airport choice 19 international airports (2 Hubs) 5 regional airports No. of airports serving a SPR: Minimum 3 airports Maximum 14 airports On average 8 airports 67 % choose nearest airport Some facts from the German Air Traveller Survey 2003: SPR: Spatial Planning Region

9. Airport and access mode choice model

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

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

12. Modelling capacity constraints in airport choice 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.

13. A simple hypothetical example

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

15. Airport choice and access quality

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

20. Thank you for your attention 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