Darshi Piyathilake-PhD Thesis Final-The role of airports in national civil aviation policies

407 Pages·2017·6.7 MB·English

by  Piyathilake, Darshi

CRANFIELD UNIVERSITY

DARSHI PIYATHILAKE

THE ROLE OF AIRPORTS IN NATIONAL CIVIL AVIATION
POLICIES

SCHOOL OF AEROSPACE TRANSPORT AND MANUFACTURING
PhD in Transport Systems

PhD
Academic Year: 2012 - 2016

Supervisor: Professor Keith J. Mason and Dr. Pere Suau-Sanchez
November 2016

CRANFIELD UNIVERSITY

SCHOOL OF AEROSPACE TRANSPORT AND MANUFACTURING
PhD in Transport Systems

PhD

Academic Year 2012 - 2016

DARSHI PIYATHILAKE

The Role of Airports in National Civil Aviation Policies

Supervisor: Professor Keith J. Mason and Dr. Pere Suau-Sanchez
November 2016

© Cranfield University 2016. All rights reserved. No part of this
publication may be reproduced without the written permission of the
copyright owner.

ABSTRACT
The concept of a hub airport has evolved widening its scope as a national civil
aviation policy-making tool, due to the ability to deliver wider socio-economic
benefits to a country. However, not all airports can be converted into hubs. This
research proposes a methodological approach to structural analysis of the airport
industry, that could be applied to determine the competitive position of an airport
in a given aviation network and devise airport strategies and national policy
measures to improve the current position of the airport. This study presents a
twelve-group taxonomy of airports, which analyses the changing geography of
the airport industry in the East (Asia and The Middle East). Multivariate data have
been used in a two-step Agglomerative Hierarchical Clustering exercise which
represents three airport strategies: namely, degree-of-airport-activity (size and
intensity of operations), network strategies (international and domestic hub), and
the market segmentation strategies (service and destination orientation).
Principal Component Analysis has been utilised as a data reduction tool. The
study confirms the general hypothesis that a sound macro environment and
liberalised approach to economic regulation in the air transport industry are
important for successful hub operations. In addition, it sheds light on the fact that
while the factors of geographical advantage, economic development,
urbanisation, tourism and business attractiveness, physical and intellectual
infrastructure, and political and administrative frameworks, are all basic
prerequisites (qualifiers) for successful hubbing in the region, those factors would
not necessarily guarantee a hub status unless the governments are also
committed to develop the sector and take timely decisions (differentiators) to
allow airports to benefit from the first mover advantage. Application of the
proposed taxonomy was tested on a case study of the major international airport
of Sri Lanka, to provide policy inputs to develop the airport that is currently
identified as being overshadowed by the mega hubs in the region.
Keywords:
Hubs, Airport Classification, Airport Strategies, Principal Component Analysis,
Hierarchical Cluster Analysis, Macro Environment, Traffic Shadow Theory
iii

ACKNOWLEDGEMENTS
Reflecting on this valuable learning process, I would like to thank everyone who
helped me throughout this journey. Prof. Keith Mason and Dr. Pere Suau-
Sanchez have been sources of inspiration in every possible way that a supervisor
can be. I only have words of appreciation for the opportunities they created, the
time they devoted to this research and to myself, the knowledge they shared that
widened my perspectives on many aspects of this research, their guidance and
patience, enjoyable teamwork, and for making me believe in myself. They are the
best!
I wish to thank Prof. Graham Braithwaite, Prof. Keith Mason and the staff at the
Centre for Air Transport Management, Cranfield University for providing the
opportunity to read for a PhD and the support they gave during my stay in
Cranfield. Special thanks to the internal review panel members, Dr. Efstathios
Velenis and Dr. Romano Pagliari for their valuable comments during the progress
review meetings of this research. Heather Woodfield, the Information Specialist
for Transport and the staff at the Cranfield Libraries are much appreciated for the
support given. I am truly grateful to Dr. Narjess Abdennebi, Chief, Economic
Analysis and Policy section, Air Transport Bureau at ICAO Secretariat and her
staff for the opportunity provided; the World Economic Forum; and various
airports whose list is long, for collaborating to share data for the use of this
research. My appreciation goes to Dr. T.L. Gunaruwan, Prof. T. Joliffe, and Dr.
Michael Cauchi for their valuable inputs on different aspects of this study. I am
thankful to those who provided valuable reviews on parts of this research at the
ATRS 2014 and 2015 conferences. My gratitude to Mr. H.M.C. Nimalsiri, DGCA
Sri Lanka for the first lessons in aviation and the support given throughout my
career.
Love to Cam, my PhD colleague for the friend I found in her. My special thanks
to Charitha & Thanuja, John & Lilly, Prash & Shan, Lakmali & Aruna, Harshani &
Tharindu, Nagen, Chandani, Gayanthi, Ishani, Chanika, and all friends from
Bedford for helping me in every possible way. Respect and love to Amma, Thatta,
Thatti, Akka, Ayya, Akki, Malli, Nangi, my nieces and nephew, and all our families
v
for their patience and always being the source of comfort and emotional support
and to Ammi for crossing the continents to make sure that I complete the PhD.
All my love to my husband whose support can be put into a separate chapter of
this thesis, for the inconceivable sacrifices he made, for the love, patience and
encouragement, and for simply being him. Much love to our cute little bundle of
joy who doubled the happiness of completing this research with his arrival.
vi
TABLE OF CONTENTS
ABSTRACT ........................................................................................................ iii
ACKNOWLEDGEMENTS................................................................................... v
TABLE OF CONTENTS .................................................................................... vii
LIST OF FIGURES ............................................................................................. xi
LIST OF TABLES .............................................................................................. xv
LIST OF ABBREVIATIONS ............................................................................ xviii
1 INTRODUCTION ............................................................................................. 1
1.1 Research background ............................................................................... 1
Air Transport: A policy instrument for economic development and
social welfare .............................................................................................. 1
Airports: A central economic engine ................................................... 4
Development of air transport in the East: Drive towards super-hubs
.................................................................................................................. 10
Drivers of aviation growth in the East ............................................... 13
Unevenness in the air transport development in the East ................ 23
The traffic-shadow effect .................................................................. 25
1.2 Research problem................................................................................... 29
1.3 Research aim and objectives ................................................................. 33
Aim ................................................................................................... 33
Objectives ........................................................................................ 33
1.4 Geographical scope of the research ....................................................... 33
1.5 Research design and structure of the thesis ........................................... 34
1.6 Contribution of the study ......................................................................... 38
1.7 Conclusion .............................................................................................. 40
2 LITERATURE REVIEW ................................................................................. 43
2.1 Introduction ............................................................................................. 43
2.2 Airport business and its impact on the national economy ....................... 43
2.3 Airport competition .................................................................................. 47
Competition between airports to attract new inbound services ........ 48
Competition between airports within the same metropolis or with
overlapping catchment areas .................................................................... 48
Competition for hub status ............................................................... 49
Competition for State aid .................................................................. 50
Competition from other transport modes .......................................... 51
2.4 Air transport networks ............................................................................. 51
Definition of a network ...................................................................... 51
Approaches to airline network theory ............................................... 52
Factors influencing the structure and development of a network ..... 54
2.5 Role of the airport in the network: The nodal functions ........................... 58
Airport (node) classification criteria and measures ........................... 59
vii
Airport typologies: A summary of different airport classifications ..... 69
2.6 The key success factors of a hub airport ................................................ 77
2.7 What makes a competitive aviation industry? ......................................... 79
National competitiveness ................................................................. 79
Determinants of hubbing and aviation competitiveness ................... 83
2.8 Theoretical conclusion and the research gap identification ..................... 98
2.9 Conclusion ............................................................................................ 104
3 RESEARCH DESIGN .................................................................................. 105
3.1 Introduction ........................................................................................... 105
3.2 Research approach............................................................................... 105
3.3 Research strategy ................................................................................. 107
Strategic group theory .................................................................... 107
A strategic group analysis for the airport industry: Classification of
airports in the East .................................................................................. 109
3.4 Research methods ................................................................................ 111
Data collection ................................................................................ 111
Analytical methods ......................................................................... 117
3.5 Sample: Selection of the network of competing airports ....................... 128
3.6 Contributions of the pilot study .............................................................. 131
3.7 Conclusion ............................................................................................ 133
4 ROLE AND FUNCTIONALITY OF AIRPORTS IN THE EASTERN
AVIATION NETWORK ................................................................................... 135
4.1 Introduction ........................................................................................... 135
4.2 Key competitive strategies of airports/hubs .......................................... 135
Size strategy: Degree of airport activity .......................................... 137
Network strategy ............................................................................ 141
Market related strategies ................................................................ 150
4.3 Data and Analysis ................................................................................. 155
4.4 Principal component analysis on the network strategies and
segmentation strategies of airports ............................................................. 160
Procedure ....................................................................................... 160
Interpretation of the principal components: Network and
segmentation strategies of airports ......................................................... 164
4.5 A two-step hierarchical cluster analysis of the network of airports in the
East............................................................................................................. 168
Clusters by degree of airport activity (size) .................................... 168
Clusters based on network and segmentation strategy .................. 173
The proposed taxonomy of airport typologies ................................ 184
4.6 The profiles of airport groups ................................................................ 186
Primary international hubs and gateways to regions ...................... 191
Secondary international hubs and gateways to regions ................. 194
Medium international airports ......................................................... 196
viii