OPTIMAL HUB STRUCTURE DESIGN

The success of a hub depends on its structure. A bank- or wave structure is the commercial heart of a hub operation and highly determines its efficiency and commercial impact. Seemingly minor details can have high impact on the profitability of the network.

The wide implications create a huge threshold for changing a hub structure. Yet, if well prepared, such may well be the key to a substantial profit improvement.

Hub design with us includes:

• How to define the number and timings of banks ?
• What is the best internal structure of a bank ?
• Which routes to allocate to which banks and how to balance local- and transfer markets?
• When does a hub reach critical mass and become economically viable?
• How to optimize the bank structure on a slot restrained hub ?
• When is a rolling hub a realistic option? 

In Schedule Consult you'll find an experienced and well equipped partner to make sure that this fundament of the network is solid.
This is one of our main specialties and we have developed successful structures for several airlines, even in very complex situations where many thought further improvement to be impossible.

NUMBER OF BANKS AND THEIR TIMINGS
A hub structure organizes all arrival and departure timings at the hub. Thus, the constellation of banks is the main driver for the commercial offer, network efficiency, airport workload, load-factors and fleet utilization.
The variation of possible structures is large. Our Bank Structure Generator, an operations research optimization model, is an important tool to weigh the most important characteristics of the hub. It brings down the number of options to less than a hand-full.
These are subject of further elaboration and compare. Thus the commercial and economic details give final confirmation about the optimal structure. 

INTERNAL STRUCTURE OF A BANK 
One of the hidden complexities of a hub structure is the internal structure of the banks. This internal structure reflects a trade-off between connecting times, airport workload and fleet utilization.
An important factor in this choice is the strategic orientation of the hub: Is there a clear prioritization in types of connections?
Other factors are the competitive elapsed times and the operational capabilities at the hub. In our projects we never take the latter for granted, because a better offer to the markets can very well compensate extra investment in the operation.

The internal structure of a bank has great implications for ground handling. It also defines commercial possibilities. The Bank Structure Generator also helps to assess the sensitivities of company profits for these aspects and thus helps to create a balanced workload for the airport.

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ROUTE ALLOCATION

Last but not least benefit of the Bank Structure Generator is that it defines which flights to allocate to which banks in order to achieve maximum profitability. Just enter all potentially perceived flights and the model will pick the best pakage.

CRITICAL MASS
Too many airlines have suffered from operating a hub under critical mass, either as a result of a too ambitious approach or as a result of too much conservatism.
It is crucial that the hub structure and the size of the airline are on par with each other. The correlation between bank mass and connectivity is exponential. Too much banks will spread the flights too thin, thus ditching connectivity.
At the other end, reluctance to grow may unnecessarily stall the profitability of new banks.
Such missteps can be very costly and have even caused companies to demise. Hub structure design together with Schedule Consult ensures that you avoid the booby-traps of sub-critical mass.

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SLOT RESTRAINED
Optimizing a hub on slot restrained airports is so complex that some airlines simply give up on it.
We have proved that our zero-based approach opens new perspective, even in one of the most suffocating slot regimes of the world (ZRH). So there is no need to rest your case.
In our approach, slots are just another airport restraint, just like gate availability, the costs of peaking and punctuality risks.

ROLLING HUB
A trend among majors like American Airlines and even Lufthansa is to apply principles of a rolling hub.
The idea is not new. Just like a hub can operate below critical mass and suffer low load factors, a hub can also choke in its success. When airlines keep on piling flights on top of successful banks, odds are that certain flights will be too full to accommodate the extra traffic. Bad money easily drives out good money and easing the peaks is a good remedy.
Schedule Consult's profitability assessment of transfer flows helps you to determine whether choking is a serious threat to your hub.

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