Hub opportunities arise for smaller airports

AIR policy liberalisation and the continued growth of low-cost carriers (LCCs) are opening up hub opportunities for smaller airports in the region.

According to Steven Fitzgerald, chief executive of Wellington Airport, airlines are increasingly setting up hubs in destinations other than their home country, leading to intense competition among airports to woo these carriers.

Centre for Asia Pacific Aviation executive chairman Peter Harbison said: “Most airports have been effective because they are hubs. This will only work if you have a liberalised marketplace.”

Liberalisation, Harbison added, had opened up new city-pairs that would not necessarily be sustainable for airlines to operate from bigger airports. “Smaller airports, which handle mainly point-to-point traffic, will benefit as this is where the growth is.”

LCCs are also driving passenger growth to new destinations through their budget fares. AirAsia X's hubs in the Pacific are a case in point, said Fitzgerald.

“To become a hub, airports do not need a network airline but an airline with a strong network that offers a range of connections. At the same time, airports must look at passenger hubbing rather than airline hubbing and fill the product gaps in interline services,” Fitzgerald said.