Hubs at risk: Exposure of Europe's largest hubs to competition on transfer city Pairs

Hubs are airports used by airlines as transfer points to get passengers to their destinations. Each of the five largest European hubs – Amsterdam, Charles de Gaulle, Frankfurt, Heathrow, and Madrid – is closely associated with one former national flag carrier. Some concerns exist in Europe that the expansion of the Gulf carriers with their hubs in Dubai, Abu Dhabi and Doha threatens the existence of European hubs regarding transfer city pairs that include at least one long-haul leg. Our paper examines the actual exposure to competition by combining airline schedules data with methodology to measure competitive transfer connections. We provide the percentage of the transfer city pairs of the five largest European hubs that is exposed to competition. Further, we identify the main competitors to each of these hubs. One important result of our paper is that despite the increasing market share of Gulf carriers, the main competition for transfer traffic is still among the five largest European hubs, with Munich and Istanbul being another two strong contenders. Hence, our paper puts into perspective the competitive risk posed by Gulf carriers and their hubs.