How Incheon Airport Maintains its Status as the “Hub in Northeast Asia”

“We are going to Cebu, Philippines via Incheon.”

There was a time when Japanese passengers visited Incheon Airport more than they did airports in Japan. In Japan, Tokyo has Narita International Airport for international routes and Haneda Airport mostly for domestic routes. It took 2 hours to go to Narita International Airport from Haneda Airport in order to transfer to an international route.

Due to this inconvenience, Japanese people living in other areas flocked to Incheon Airport, instead of Narita International Airport. As a result, the Japanese government felt threatened and responded by opening the New Haneda Airport. The Japanese government could not let its people use an airport in Korea to go overseas and used a strategy that encouraged them to go to Haneda with convenient transportation to go abroad. The reason why the Japanese government had no choice but to use this strategy while worrying about whether it may undermine the competitiveness of Narita International Airport was that it attempted to compete with Incheon Airport, which was rising as a hub airport in Northeast Asia.

Likewise, the competition has been going on between airports in neighboring countries to get ahead as a hub airport. This post will look at what efforts Incheon Airport is making in order to maintain its status as a hub airport in Northeast Asia and attract more passengers!

‘JV’ BETWEEN AIRLINES ATTRACTS PASSENGERS!

In the previous post, we pointed out the importance of flight networks on various routes as a qualification for hub airport. A flight network is an asset accumulated by airlines through various efforts over a long period of time, and it is not easy to widen the network in a short period of time. What could happen if airlines with different networks joined hands? That is another story.

▲Source: Korean Air

In 2018, close cooperation between two airlines caught a lot of attention. This was a joint venture (JV)* between Korean Air and Delta Air Lines. Under this JV, both airlines operate in terms of fare and schedule as if they were one airline and share profits and costs in Pacific routes connecting North America to Asia. In other words, Korean Air’s 77 routes in Asia and Delta Air Lines’ 271 routes in North America establish a system connected by Incheon Airport as a hub.

It refers to the highest level of cooperation in the airline industry where two different business entities operate certain routes together and share profits.

 

Code share, which many of you may have heard of, allows a partner airline to sell a portion of seats on another airline’s flight, but under a joint venture. In other words, an airline can use all the seats on a partner’s flight. In addition, while alliances such as SkyTeam and Star Alliance just share miles or lounges, joint ventures not only operate together, but they also share costs and profits. For instance, as the joint venture between Korean Air and Delta Air Lines was approved, consumers could book and use all routes of Delta Air Lines just like they did Korean Air. Furthermore, they can earn the same amount of Korean Air’s SkyPass miles from boarding Delta Air Lines’ flights.

(1) How does the JV benefit passengers?

  1. There are more flight schedules from which to choose.
  2. There are more direct flight options.
  3. You can earn the same amount of Korean Air’s miles from boarding Delta Air Lines’ flights.
  4.  It reduces transfer time and makes transferring easier.

As both airlines adjusted their flight schedules efficiently, passengers had more options from which to choose in terms of Incheon-North America flights, creating an absorption effect of Incheon Airport in terms of transfer demand from passengers who used other airports in Asia.

(2) How does the JV benefit airlines and Incheon Airport?

The JV has been beneficial for both airlines and Incheon Airport. For one year of the JV, Korean Air increased the number of North America routes by 2.9% (2,563,386 → 2,636,689 flights), Southeast Asia routes by 6.8% (4,126,488 → 4,408,655 flights), and Japan routes by 1% (2,58,0643 → 2,605,429 flights). During the same period, Delta Air Lines also operated 2,168 flights in North America routes, 11% more compared to before the JV (1,953).

As the number of connecting flights between Korean Air and Delta Air Lines increased, so did the number of transfer passengers in Incheon Airport. In the past year, the airport accommodated 2,870,517 passengers, 240,000 (9.1%) more from 2,630,669 a year earlier. In fact, after Delta Air Lines closed routes to Osaka, Bangkok, and Taipei via Narita International Airport in Japan to cooperate with Korean Air, the number of transfer passengers in these routes via Incheon Airport increased by 5 times.

INCREASE PASSENGER CAPACITY BY EXPANDING “SLOTS”!

Everyone wants to fly at a similar time. Many people want to get out fresh in the morning and enjoy the afternoon at their destination. For a long flight, they want to depart at night and sleep during the flight. It is not easy to wake up early in the morning and there are not many transportation options at late at night, not to mention that it is also physically demanding.

Though airlines want to operate only during golden times from 8:00-9 a.m. or 6:00 to 9:00 p.m. during which people often fly, there is a reason they cannot. This is because the total number of flights is determined for each airline during a particular time. These is called “slots. To prevent traffic congestion, an airport allocates slots to airlines in order to adjust their take-off and landing schedule. The more slots there are, the bigger the airport’s capacity.

To solidify Incheon Airport’s position as a hub airport in Northeast Asia, it is important to continuously secure slots. It is not easy to secure slots. It is important to secure slots both in arriving and departing airports in order to fly an airplane, and additional slots are allocated depending on physical infrastructure such as runways, air traffic control systems, and passenger terminals as well as human resources.

Incheon Airport increased its number of slots from 43 to 63 after finishing the Phase 2 Construction Project in 2008. After opening Terminal 2 in 2018, Incheon Airport’s number of slots has increased up to 70 per hour. Currently, Incheon Airport’s physical infrastructure is designed to accommodate up to 90 slots per hour, but it must not exceed 39 slots for departure and 40 slots for arrival. These numbers are calculated based on Incheon Airport’s transportation capacity in terms of runways, aprons, customs, immigration, and quarantine (CIQ), and air traffic control. Incheon Airport’s CIQ capacity per hour amounts to 7,285-7,785 arriving passengers and 9,600 departing passengers.

The official term set forth by the Ministry of Land, Infrastructure and Transport in its regulation is aircraft operating time. In practice, however, the term “slot” is often used. Slot refers to an opening in a computer or device into which you can insert a circuit board or memory card. This term is also used in the airport in the sense that you can insert it into a flight schedule.

 

The concept of slot originated from the United States. According to the Korea Transport Institute, as demand for flights skyrocketed in 1969, the US applied slots to restrict landings and take-offs at five airports: O’Hare International Airport, Ronald Reagan Washington National Airport, LaGuardia Airport, John F. Kennedy International Airport, and Newark Liberty International Airport. This was because passengers experienced huge inconveniences as flights were delayed due to congestion. Since then, slots were introduced at major airports in Europe, and now most airports use slots in accordance with the requirements of the International Air Transport Association (IATA).

From the joint venture between airlines to increase passenger demand to a strategy to expand slots for flights per hour by expanding the airport’s infrastructure, today we have looked at Incheon Airport’s noticeable efforts to increase connectivity as a hub airport while securing various routes and time slots so that passengers choose Incheon Airport.

Even though flight demand is stagnant around the world due to COVID-19, we hope you are looking forward to the future of Incheon Airport, which flies further as a hub airport in Northeast Asia, when flight demand recovers!

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