Have you ever wondered how an airline decides to launch a new flight, or why some cities are connected directly while others are not?
Behind every new flight added to an airline's schedule lies a complex design, balancing commercial data, development strategy and operational operations.
From strategy to planning
Route planning follows two basic levels: long-term strategic planning, which concerns the composition and size of the fleet, and short-term operational planning, which focuses on the formation of the flight network, based on available resources, i.e. aircraft and crews.
Performance, that is, the desired profitability and the prospects of each route are key parameters in every case.
Planning is done twice a year, approximately six to 12 months before the start of each season, covering the summer (April–October) and winter (November–March) seasons.
The business model makes the difference
How a company operates directly affects its strategy. Traditional airlines, such as Aegean, Lufthansa, Emirates, use central hub airports, from where they serve multiple destinations with an intermediate stop at the main airport.
On the other hand, low-cost carriers, such as Ryanair, Wizz Air and easyJet, have multiple bases, mainly at secondary, regional airports, and operate direct flights with the aim of creating demand through cheap fares and strong marketing.
In recent years, as low-cost carriers grow and expand their fleets, they have begun to use major airports in capital cities, which shows on the one hand that their model is evolving and changing, but also that major airports are adapting and seeking growth through these companies.
At this stage, low-cost carriers serve over 40% of total passenger traffic in Europe.
Airlines that serve mainly tourist purposes and combine the entire vacation package, such as TUI and Jet2, decide where to operate flights mainly in relation to the agreements they have with tourist accommodations, passenger transport companies and generally where they can create and offer an overall competitive package.
However, in recent years, there has been a trend towards creating dynamic packages even for these companies, where their customers can now choose a destination, airline (not necessarily the same one), hotel and the activities they want to do at a destination.
This trend creates additional pressure on destinations to remain competitive and continuously enrich the tourist experience because the customer will no longer be completely dependent on the airline.
In a rapidly changing environment such as aviation, there is a trend towards convergence of models, and thus more and more companies are following what is called a hybrid model, combining different strategies for greater flexibility.
The criteria for selecting itineraries
Demand is the main parameter. Airlines calculate how many passengers are expected to travel on a flight using passenger flow analysis tools, taking into account three main categories - demand for leisure travel, visits to friends or relatives - especially in destinations with large expatriate communities - but also trips related to business travel or relocation for work/study.
During the summer season, due to higher demand, companies often increase their itineraries, either by adding new routes or by strengthening existing routes with additional flights.
In the case of Cyprus, the majority of flights serve tourist demand, with a significant percentage, approaching 70%, relating to inbound tourism.
At the same time, there are itineraries that mainly concern trips to visit friends and relatives, while some markets primarily serve outbound tourist demand.
The performance of a route - that is, the revenue per passenger per kilometer flown - is equally critical. It is not enough to fill seats, a route must also be profitable.
Companies are looking for destinations that combine high occupancy with high yield, in order to maximise their performance.
Distance also plays a role. The longer the flight, the more operational resources it requires: longer crew hours, more fuel, and a limitation on the number of flights an aircraft can fly in the same day.
This affects destinations such as Cyprus, which due to its geographical location is far from the main European markets.
This disadvantage can be compensated for either through financial incentives to airlines but primarily by creating demand and subsequent satisfactory performance, i.e. allowing companies to sell at competitive, but advantageous, prices for the same.
This is a very important criterion for low-cost or hybrid airlines which sell exclusively to individual passengers (rather than package tours) and their main concern is to ensure that their aircraft are full.
Thus, they often lower prices when the destination does not have much appeal, resulting in losses and very often withdrawing from a market or canceling an itinerary.
At the same time, more and more airlines are focusing on routes that can operate year-round in order to achieve the best possible employment of their fleet and crews.
This is also interrelated with the need to create demand during periods of limited passenger traffic such as the winter months.
Another factor is the restrictions imposed by some airports. Some popular hubs - such as Heathrow in London or Schiphol in Amsterdam - operate on slots, for a set number of takeoffs and landings, which makes it difficult to add new flights.
In contrast, airports such as the ones in Larnaca and Paphos offer greater flexibility, as they do not apply restrictions, allowing greater flexibility to airlines.
In addition, for flights to countries outside the EU, bilateral agreements are required that define flight rights, which must be secured for a route to operate.
Investment with a three-year perspective
A new route does not perform from day one. It often takes up to three years to reach satisfactory occupancy and performance.
For this reason, airlines - especially low-cost ones - are investing in new routes with offers, intensive promotion and incentives, in order to create demand and gradual market maturation.
In conclusion, behind every new flight lies strategy, analysis and planning. It is not just a link on the map, but a business decision with a long-term perspective.
This article first appeared in Greek, in Hermes Airports' Flight Mode online magazine. Click here to view it.
