Armchair CEO - Where would you build a hub?
May 19, 2015, 10:26 pm
#1
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Armchair CEO - Where would you build a hub?
Let's say you were building a new airline. You could place your hub at any airport other than London, New York or Tokyo. Where would you build it and why?
May 19, 2015, 10:48 pm
#2
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Singapore. From there, access non-stop to anywhere in Asia, Europe, Australia or the Middle East. And to the US West Coast with the right planes.
Seoul. Non-stop to US and anywhere in Asia.
Seoul. Non-stop to US and anywhere in Asia.
May 19, 2015, 11:40 pm
#3
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FLL (Fort Lauderdale) - Gateway to the Miami area, and to the Caribbean/Central/South America. Large airport with land to grow, unlike Miami International Airport which can't really expand due to being land locked.
HNL (Honolulu) - Tourist destination, plus gateway to Oceania and Asia.
HNL (Honolulu) - Tourist destination, plus gateway to Oceania and Asia.
May 20, 2015, 12:51 am
#5
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You need to provide a qualifier here. Are you talking about total armchair CEO fantasyland, or does one take into account the existing competitive landscape at whichever airport one picks? The former is a pretty pointless exercise; the latter would be a more commercially and strategically interesting question...
May 20, 2015, 12:54 am
#6
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From there, access non-stop to basically almost anywhere in Asia, Europe, Australia, the Middle East, Africa, North America and South America.
May 20, 2015, 2:12 am
#7
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Armchair CEO - Where would you build a hub?
I'd build it in an area close to my bankers where I could raise capital to fund my airline and salary. Then stash my $20 mil a year for 4 years until I "resign". So I guess NY, HK or London would work for me.
May 20, 2015, 2:40 am
#8
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But if you are using the above principles to select a location, why go for a second-tier option when you can go for, for example...
From there, access non-stop to basically almost anywhere in Asia, Europe, Australia, the Middle East, Africa, North America and South America.
From there, access non-stop to basically almost anywhere in Asia, Europe, Australia, the Middle East, Africa, North America and South America.
Jakarta to Bangkok via Singapore is about 3 hours in the air. Through Dubai it's 15 or more. Hong Kong to Kuala Lumpur? Tokyo to Bali? Seoul to Perth? Can you get from Dubai to Sydney non-stop?
Europe is a dead destination in my mind. Not that it's actually dead but that it's not growing and not particularly profitable. Asia is where the growth and the future lies so that's where I'd want to maximize the efficiency of my hub.
With a hub in Singapore you can block an area from Seoul to Sydney to Dubai and get anywhere non-stop. And that's the area I'd want to service with my hub.
May 20, 2015, 2:43 am
#9
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I wouldn't build a hub. Hub-and-spoke operations are complex and expensive, and I wouldn't start up an airline that way. I'd start off with some lucrative point-to-point flights on new, efficient aircraft with quick turnarounds and a low cost base, and build from there, with 'focus cities' rather than hubs as the airline grows. Only if the airline reached a certain size, or a long-haul aspect, would I consider moving to a hub-and-spoke model.
May 20, 2015, 4:07 am
#10
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A brand new airport in a quiet rural area of southeast Asia where land is cheap. Preferably it would be in a country where the existing major airports are dysfunctional and an impediment to growth, and where improving them is impossible. The Philippines would be perfect if the problems of low quality government can be overcome. Competing with Manila Airport as a transfer hub shouldn't be too hard.
May 20, 2015, 5:22 am
#11
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Johannesburg, just for the hell of it. With a fleet of 787 and A350 for long haul routes and 737Max for regional.
I used to play Airline Empires when I had more time on my hands and always enjoyed going on the top 10 leaderboard with my JNB hub.
In all truth, it would never be a world leader with real people, Perth to Rio sure, but how big are those markets really? Even though Africa is a very rapidly expanding market, JNB is too far south to take advantage of it from most points in the world. I think Ethiopian is very well poised right now to dominate that growth since they can both grow the intercontinental routes and also have ADD as a fairly well positioned hub for much of the intra-Africa travel.
I used to play Airline Empires when I had more time on my hands and always enjoyed going on the top 10 leaderboard with my JNB hub.
In all truth, it would never be a world leader with real people, Perth to Rio sure, but how big are those markets really? Even though Africa is a very rapidly expanding market, JNB is too far south to take advantage of it from most points in the world. I think Ethiopian is very well poised right now to dominate that growth since they can both grow the intercontinental routes and also have ADD as a fairly well positioned hub for much of the intra-Africa travel.
May 20, 2015, 5:57 am
#12
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Johannesburg, just for the hell of it. With a fleet of 787 and A350 for long haul routes and 737Max for regional.
I used to play Airline Empires when I had more time on my hands and always enjoyed going on the top 10 leaderboard with my JNB hub.
In all truth, it would never be a world leader with real people, Perth to Rio sure, but how big are those markets really? Even though Africa is a very rapidly expanding market, JNB is too far south to take advantage of it from most points in the world. I think Ethiopian is very well poised right now to dominate that growth since they can both grow the intercontinental routes and also have ADD as a fairly well positioned hub for much of the intra-Africa travel.
I used to play Airline Empires when I had more time on my hands and always enjoyed going on the top 10 leaderboard with my JNB hub.
In all truth, it would never be a world leader with real people, Perth to Rio sure, but how big are those markets really? Even though Africa is a very rapidly expanding market, JNB is too far south to take advantage of it from most points in the world. I think Ethiopian is very well poised right now to dominate that growth since they can both grow the intercontinental routes and also have ADD as a fairly well positioned hub for much of the intra-Africa travel.
In the real world I wouldn't build a hub but focus on p2p flying as I believe it is severely lacking for medium sized markets. I find the new airline, OneJet model to be very interesting and would try something similar.