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Airlines and Airport Ground Access: Current Arrangements and Future Opportunities

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Airlines and Airport Ground Access: Current Arrangements and Future Opportunities Airlines and Airport GroundAccess: Current Arrangements and Future Opportunities Krista Rhoades Shomik Mehndiratta Mark Hansen Working Paper UCTCNo. 399 TheUniversity 9f California TIansportation Center Universityof California Berkeley, CA94720 The University of California Transportation Center The University of California Center activities. Researchers Transportation Center (UCTC) at other universities within the is one of ten regional units region also have opportunities mandatedby Congress and to collaborate with UCfacul~ established in Fall 1988 to on selected studies. support research, education, and training in surface trans- UCTC’seducational and portation. The UCCenter research programsare focused serves federal RegionIX and on strategic planning for is supported by matching improving metropolitan grants from the U.S. Depart- accessibility, with emphasis mere of Transportation, the on the special conditions in California Departmentof RegionIX. Particular attention Transportation (Caltrans), and is directed to strategies for the University. using transportation as an instrument of economic Based on the Berkeley development,while also ac- Campus, UCTCdraws upon commodatingto the region’s existing capabilities and persistent expansionand resourcesof the Institutes of while maintaining and enhanc- TransportationStudies at ing the quality of life there. Berkeley, Davis, Irvine, and Los Angeles;the Institute of TheCenter distributes reports Urban and Re#onal Develop- on its research in working merit at Berkeley;and several papers, monographs,and in academicdepartments at the reprints of publishedarticles. Berkeley, Davis, Irvine, and It also publishes Access, a Los Angeles campuses. magazinepresenting sum- Faculty and students on other mariesof selected studies. For University of California a list of publicationsin print. campusesmay participate in write to the address below. Universityof California TransportationCenter 108Nawl Architecture Building Berkeley,C..~fomia 94720 Tel: 510/643-7378 FAX:510/643-5456 Thecoaten~ of this report reflect the viewsof the authorwho is responsible for the facts andacc~xacy of the d_Atapresented herein. The contents do not aeeors~yreflect the official viewsor policiesof the State of Cnlifor~or the U.S. Departmentof Trampoaafion.TI~ report doe, s not constitmea ~dard, specification,or regulation. Airlines and Airport Ground Access: Current Arrangements and Future Opportunities Krista Rhoades Shomik Mehndiratta Mark Hansen Institute of TransportationStudies Universityof California Berkeiey, CA94720-1720 Working Paper April I994 UCTCNo. 399 The University of California Transportation Center University of California at Berkeley PREFACE AND ACKNOWLEDGEMENTS This report documents research performed for the State of California, Department of Transportation, under contract #65H998 -MOU78. The attthors wish to acknowledge the many people who granted interviews for this project. They include airport officials, airline station managers, and airline headquarters personnel, as well as other researchers at ITS. Weare particularly grateful to the airport and airline personnel, who volunteered tJ, me from their very busy workdays to answer our--often naive-- questions patiently and thoughtfully. The contents of this report ret:’lect the views of the authors, who are responsible for the facts and accuracy of the data presented herein. The contents do not necessarily reflect the official views or policies of the California Department of Transportation. This report does nol constitute a standard, specification, or regulation. ii TABLE OF CONTENTS Preface and Acknowledgements ................................... ii Table of Contents ............................................. iii 1. Introduction ................................................ I 2, Airline Involvement in Ground Access: An Overview of Current Activity .. 3 Routing and Scheduling .................................... 3 Information/Reservations ................................... 6 Operation of Services ...................................... 9 3. Airline Involvement in Ground Access: Theoretical Perspectives ........ 21 Introduction ............................................ 21 Strategic Aspects of" Bundling ............................... 24 Economic Ramifications of Bundline .......................... 31 4. Surveys Airline Surveys .......................................... 34 Airport Survey .......................................... 44 5. Conclusions ............................................... 52 6. References ............................................... 55 Appendix 1 - Interviews ........................................ A1-1 Appendix 2- Initial Airli~,e Study ................................ A2=I Appendix 3- Airline Station Manager Survey ....................... A3-1 Appendix 4 - Airline Survey (Headquarters Level) ................... A4-1 Appendix 5- Airport Survey .................................... A5-1 Appendix 6 -Intermoclalism in the Freight Transportation Industry ....... A6-1 °oo 111 CHAPTER 1. INTRODUCTION One of the most critical issues facing the airport system today is ground access. Nearly every airplane trip begins and ends with the use of an automobile. It is estimated that over 90 percent of airline passenger trips to or from the airport are by private automobile or taxi. This estimate is almost 100 percent at the medium or smaller airports since these communities tend not to have comparable alternatives to the automobile. It is recognized that airport ground access is a major issue and in some cases a constraint to airport development or airside capacity. In order to accommodate the future growth of the air transportation industry, innovative approaches to moving pas,;enger to and from airports should be explored. A partial solution to the airport ground access problem could be through the airline industry itself. For most trips, the airlines’ responsibility only includes the air segment of the journey. The surface transportation portion is left for others. This may not., however, be an optimal arrangement. On the one hand~ significant opportunities to coordinate the delivery and marketing of ground access and air transport services may be lost. In addition, the current system may not sufficiently encourage airlines to consider the impacts of their service and scheduling decisions on the ground transportation system. This report examines the possibility of expanding the role of airlines in facilitating ground access for their passengers. The paper is divided into three parts. The first section discusses the historic and current involvement of airlines in providing ground access services as well as scenarios in which the airlines’ responsibility can be expanded. The second part provides an economic perspective on the airline ground access roles. The third part contains an overview of the airline and airport surveys which were conducted to evaluate the role and opinions of the air transportation industry on the issue of airport ground access. 2 CHAPTER 2. AIRLINE INVOLVEMENT IN GROUND ACCESS: AN OVERVIEW OF CURRENT ACTIVITY Introduction The initial research focused on the development of an adequate knowledge base of airline participation in airport ground access. This was accomplished through examination of trade literature (a list of references is contained in Section 5), expert interviews with individuals knowledgeable of airport ground access issues (see Appendix I), and surveys of both airline and airport representatives (Section 3). Scenarios whJich airlines’ roles in providing ground access services might be expanded were developed from this research and are discussed under the following three headings: Routing and Scheduling involves airlines giving greater consideration to the ground access implication:s of decisions such as what points to serve and when to schedule flights. Informati0n/Reservations refers to airlines expanding their current flight information and reservations capabilities to encompass ground access services. Provision of Services involves airlines becoming directly involved in supplying ground access services, w:hether by operating the services directly, capitalizing them, or developing ties with ground access service providers similar to those they have established with commuter air carriers. Roating and Scheduling Offering Services To Places Not Often Provided By Air (Excursion/Seasonal) To aid in the reduction of congestion pertaining to airport ground transportation, airlines could provide services to ground destinations not often provided by air. Instead of having passengers end their air travel at the major airports, the airlines could take passengers closer to their destinations. This would be particularly useful in resort type areas such as ski resorts, vacation resorts, or any other major activity center. Some examples of these types of services are provided by Pakistan International Airlines (PIA). This airline flies approximately 45 major expeditions per year into Himalayan base camps to accommodate the trekkers and mountain climbers that regularly visit Pakistan. To accommodate passengers during Pakistan’s Eid holiday, a family holiday similar to Christmas in the United States, PIA added thirteen domestic flights to distribute their passengers upcountry. The airline also flies two 1981-vintage de Havilland DH-6 Twin Otters to remote destinations within the country. PIA feels an obligation to serve these remote areas, although not this is not profitable, to provide the residents
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