Hub and Spoke
02-02-2006, 07:36 AM
#1
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Hub and Spoke
What does everyone think of the hub and spoke system. In my opinion, if you want to move passengers from some obscure point A to some point C, the most efficient way is to route them through point B, the hub.
For as long as I can think of (10,20,30 years), just about every airline has had some sort of a hub and spoke system. While low cost carriers have a few point to point routes, they still mainly have a hub and spoke system. Southwest is the only airline I can think of that uses mainly point to point routes.
The reason why I ask this question is because I was reading Southwest's January operational preformance, and while their load factor was up 4% for january, it was up from 58%, by far the lowest load factor in the industry. Would Southwest be a better and more efficient airline if they used a hub and spoke system?
For as long as I can think of (10,20,30 years), just about every airline has had some sort of a hub and spoke system. While low cost carriers have a few point to point routes, they still mainly have a hub and spoke system. Southwest is the only airline I can think of that uses mainly point to point routes.
The reason why I ask this question is because I was reading Southwest's January operational preformance, and while their load factor was up 4% for january, it was up from 58%, by far the lowest load factor in the industry. Would Southwest be a better and more efficient airline if they used a hub and spoke system?
02-02-2006, 08:10 AM
#2
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Originally Posted by ryane946
What does everyone think of the hub and spoke system. In my opinion, if you want to move passengers from some obscure point A to some point C, the most efficient way is to route them through point B, the hub.
For as long as I can think of (10,20,30 years), just about every airline has had some sort of a hub and spoke system. While low cost carriers have a few point to point routes, they still mainly have a hub and spoke system. Southwest is the only airline I can think of that uses mainly point to point routes.
The reason why I ask this question is because I was reading Southwest's January operational preformance, and while their load factor was up 4% for january, it was up from 58%, by far the lowest load factor in the industry. Would Southwest be a better and more efficient airline if they used a hub and spoke system?
For as long as I can think of (10,20,30 years), just about every airline has had some sort of a hub and spoke system. While low cost carriers have a few point to point routes, they still mainly have a hub and spoke system. Southwest is the only airline I can think of that uses mainly point to point routes.
The reason why I ask this question is because I was reading Southwest's January operational preformance, and while their load factor was up 4% for january, it was up from 58%, by far the lowest load factor in the industry. Would Southwest be a better and more efficient airline if they used a hub and spoke system?
737s only: Saves money, but insufficient range for international. also too large of an aircraft to economically serve Yuma, AZ or San Louis Obispo, CA.
One Class: Simplifies and speeds boarding, permiting quick turns. Does not appeal to high $$$ travelers.
Easy Airports: Serves only airports with weather and traffic conditions which allow for minimal delays (SNA vice LAX, OAK vice SFO, etc).
Basically what they do is find city pairs that offer a sweet spot for their operations, and move in. A few cities are so dense w/ SWA that they sort of function as a mini-hub (PHX, LAS, etc).
The hub & spoke system by contrast is designed to provide full service to/from small, medium, large, and Internation destinations. LCC's are only a bargain if they happen to serve the cities where you want to go. Also if you fly for business and build up frequent flyer miles on SWA, you get a free vacation in Vegas or Cleveland. Those same miles on a legacy could get you to Milan or Barcelona and/or first class upgrades.
SWA's current growth and success is driven by their fuel hedge, not by any performamnce factors. They are good in their niche, and smart enough to stay there (it is a pretty big niche).
02-02-2006, 01:21 PM
#3
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the problem I have is the dependency the airlines have with the hub and spoke system. They're just putting all of their eggs in one basket. To me it's just like investing. If if things are good, they're good, but if things are bad, they're horrible.
One of the big advantages that Southwest has against the Hub and Spoke is the utilize the smaller destinations to a much greater extent. All airlines have to pay at each airport for the gates and employees hourly. A hub and spoke airline might only have two flights per day into a smaller city, whereas Southwest generally has many more flights than that because of the many different direct destinations offered. Thus they are getting the most they can out of their resources.
I think the biggest problem with hub and spke however, is what I mentioned the first time, which is the high risk involved. The airlines just aren't diversifying they're routes enough.
One of the big advantages that Southwest has against the Hub and Spoke is the utilize the smaller destinations to a much greater extent. All airlines have to pay at each airport for the gates and employees hourly. A hub and spoke airline might only have two flights per day into a smaller city, whereas Southwest generally has many more flights than that because of the many different direct destinations offered. Thus they are getting the most they can out of their resources.
I think the biggest problem with hub and spke however, is what I mentioned the first time, which is the high risk involved. The airlines just aren't diversifying they're routes enough.
