16.781 Planning and Design of Airport

Systems

Planning for a New International Hub in Mexico

City

Alvaro CovarrubiasDecember 10th, 2002

• Air market between North America and Central/South America.

• Competitive analysis of different hubs.• Case studies: airports trying to become

hubs.• A strategy for Mexico City.

Outline

Air Market - Airports

For historical, cultural and geographic reasons, Miami is the maingateway for traffic from Central and South America.

Available Seats to Central and South America

MIA

DFW

IAH

EWR

ATL

LAXJFK

Source: OAG (2001)

Air Market - Airlines

As MIA is a hub for AA, the airline and its partners dominates the traffic between the two regions.

Available Seats to Central and South America

AA

LANTACATAMIBERIA

UNITED

VARIG

DELTA

AEROLINEAS ARGENTINAS

SUMMA

CONTINENTAL

OTHER INDEPENDENT

COPA

Source: OAG (2001)

Air Market – Main Destination in Central/South America

Although Central America represents almost 45% of the AS…

Weekly Seats from North American Gateways

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

GR

UC

CS

EZE

BO

GS

JO LIM

SC

LG

UA

SA

LG

IGP

TYM

GA

UIO

SA

PB

ZEB

AQ

MA

RG

YE

TGU

CLO

MA

OM

DE

LPB

CTG VV

IV

CP

VLN

MV

DR

TBR

EC

Source: OAG (2001)

Air Market – Main Destination in Central/South America

It only represents a 20% of the ASM.The business is in South America.

Source: OAG (2001)

Weekly thousand seats*miles from North American Gateways

020,00040,00060,00080,000

100,000120,000140,000160,000180,000

GR

UE

ZES

CL

LIM

GIG

BO

GC

CS

SJO

GU

AS

AL

PTY UIO

MG

AG

YE

SA

PB

ZEB

AQ

CLO

MA

RM

DE

TGU

CTG

MA

OV

VI

LPB

VC

PV

LNM

VD

RTB

RE

C

Airport

Competitive Analysis – Geographic Location

Evaluate the geographic suitability of hubs, for traffic between the 13 airportswith more ASM from US gateways…

Competitive Analysis – Geographic Location

To 18 of the largest metropolitan areas in the US and Canada.

Results: - MEX would only be competitive for traffic to WestCoast and Texas from Central America, LIM, SCL, EZE.- IAH, DFW and LAX would be the competitors.

Competitive Analysis – Delays/Capacity

• IAH and DFW:– High On-Time performance.– High Capacity to grow. New runways are

going to be built.

• LAX:– Lower than average on-time performance.– Almost impossible to grow.

Competitive Analysis – Design

• DFW: Linear buildings, not good for connections.

• IAH: Hybrid design, regular quality for connections.

• LAX: Finger piers, long separation between international and domestic terminals, no people-mover.

Case Studies

Munich Kuala Lumpur

Construction Gradual, Reactive Anticipatory

Airline’s Strength in Region High Low

Airline’s Alliance Star None

Multi-airport Region No Yes

Rail connection Yes Only from 2002

Domestic Fares Uncontrolled Subsidized

Design Linear structure Midfield x-shaped

Competing Hubs Situation FRA: Capacity constraints ZRH: Swissair’s bankruptucy.

SIN: Blooming BKK: Blooming

Participation of Airline Joint design, funding and operation

None

Air Service Freedoms Extensive Limited

Conclusions

• Search for an alliance to operate the hub.• Build airport gradually, be flexible.• Design for easy connections.• Engage with airlines, try joint operation of

terminals.• Land banking.• Liberalize air service agreements.• Volumes do not allow hub operation and

multi-airports in Mexico City.

Thank you for your attention!

Alvaro Covarrubiasalvaroc@mit.edu