What is Hub and Spoke system and why do airlines use them?

Hub and spoke model

Have you ever wondered why you have to transit or stop over in another airport before you reach your final destination? This happens more frequently for destinations further away from your point of origin. If you thought, "it is just for the aircraft to fill more fuel", you are just scratching the surface. Yes, this is one aspect but today majority Airlines have acquired commercial aircraft that are capable of flying 16-17 hrs in a stretch. The reason behind these stopovers which is prominently observed with full service carriers is what we will unfold today by understanding the Hub and spoke model used by the big players in aviation. Airlines worldwide operate flights through a network of destinations with a specific base airport(s).

This model operates with one airport as a central point (Hub) where passengers from different destination lands. These passengers are then connected through different aircraft to multiple end destinations. For example, rather than connecting a passenger from Amsterdam to Bali directly, this passenger would be transported to a hub by an airline from Amsterdam and then transferred to another flight who will be now accompanied by other passengers who have come from different origin but travelling to the same destination which would be Bali. This method helps airlines to operate in a more predictable way.

The benefits to using this model are as follows:

1. Control over operations

Concentrating operations in a single hub would help the airline manage ground services, crew can be based in the same city there by reducing logistical difficulties. Helps a lot when it comes to maintenance factor, as all aircraft would eventually land back in to the base which leaves room for better inspection and procurement of advanced infrastructure, this also allows for reduction in costs for man power and machinery outstation. As services get centralized, utilization of third party vendor contracts stands to a minimum.

2. Increased aircraft utilization

The hub and spoke model helps airlines reduce idle time and provides efficient rotation. When passengers from different origins join in at the hub, there is a wave of people who are being pooled into a single aircraft that takes them to the final destination. This improves per seat occupancy especially for long haul flights. Maximum seats filled plus efficient utilization of planes even on a small scale can generate high profits.

3. Flight schedule flexibility

Flights arriving and departing at similar times provide room for tight connections. Airlines can manage to provide passengers from arriving flights to departing flights with minimal transit time. They can increase or decrease frequency on certain secondary or Spoke routes without disrupting the rest of the network. It is easier to merge two departing flights if there is an under-bought flight or swap an aircraft with another without major delays to the overall system.

4. Efficient use of strategic alliances

Hub and Spoke model makes it easier for partner airlines associated with One World, Star Alliances etc to code share flights and coordinate schedules where in, one airline might fly passengers into a specific hub and then can use the primary airline in partnership to transfer them to their desired destination. For example, a regional carrier in India can fly passengers to a hub in the middle - East where they connect with another national full service airline for long haul flights to the point of destination

5. High occupancy, Low Fares

When multiple people from smaller cities are connected to the hub to reach a popular destination, Larger aircraft are used. Probability of filling all the seats in the aircraft is high in this case. Adding to that, if the number of aircraft used for this purpose is efficient, airlines end up profiting out of this whole deal. Result? Lower fares. Airline now has enough margin to provide competitive prices to the customer with lower operating cost. This makes air travel more accessible to the people. 

 

To conclude, the Hub and Spoke model has revolutionized how the airline industry operates globally. As i mentioned earlier, this is widely used by full service carriers who operate at a very large scale. It is a framework that allows an airline to concentrate operations, expand their reach and achieve greater control over cost structure. While we discussed the positive side of this model, it is important to know that, like anything else in this world, there are disadvantages to this system. An airline can try to execute this with high accuracy but a certain level of unpredictability and limitations should always be accounted for. Remember, this model relies heavily on the operating efficiency of the hub and if there comes a time where the day to day is disrupted, that can cause chaos in operations across the network. 

There are multiple airlines that use another system known as the Point to Point model which is mostly used by regional airlines within a country. However, this model has faded away in the past decade or so. As my intention to start this blog was to research and understand every aspect of this industry, this lesser used system should not be left untouched.

Join me on the next blog, as I uncover the Point to Point system used by Low-Cost carriers generating sky high profits.

Stay tuned.