Spotlight on Megahubs

OAG’s chief analyst, John Grant, explains why Megahubs are nothing without their regional connectivity.

Everyone wants to be “mega”. It’s a sign of importance, position, value, and sometimes wealth, and airports are just the same, they love to be Megahubs; or at least some of them do.

The term Megahubs may have been around a few years, but its more formalised usage and recognition came into focus with the launch of OAG’s Megahub Index report in 2015, which helped solidify the term in industry and public discussions about air travel.

Now heavily used in the aviation sector, the performance and growth of Megahubs is tracked on an annual basis. But what makes a successful Megahub?

Incredible connectivity and networks

In addition to handling more 50 million passengers and tonnes of cargo per annum, the very largest airports in the world are also major economic generators.

The very best such Megahubs combine both a wide range of destinations served and, in most cases, that means more than one hundred plus connecting markets and more often than not connected with a high degree of daily frequency.

Indeed, the annual OAG Megahubs report counts both factors as key variables in our connectivity algorithm, and it’s clear that airports falling into this prestigious category are always looking for an edge over their rivals.

Becoming a Megahub requires a huge investment, the support of local airlines from both the legacy and low-cost sectors, close partnerships with key regulatory authorities, a commercial mindset and a degree of geographic luck; the right place, right time mantra is crucial.

But above all of those factors the most important criteria for a successful Megahub is people, and a growing population with an emergent middle class with increasing disposable income is the perfect combination.

In their 2019 Global Market Forecast, Airbus predicted that there will be ninety-five Megahubs by 2038 with cities such as Lagos, Rio de Janeiro and Philadelphia joining the elite club.

Increasing automation and AI

Handling increasing passenger volumes, extra ATMs and all the operational complexity of modern-day travel requires constant investment in technology and, in more recent years the use of AI where possible.

Biometric technology is now common-place at most airports, new initiatives such as remote aircraft and airbridge parking are being trialled in some locations and it’s only a matter of time before Megahubs will have to accommodate passenger drones with high value corporate executives wanting airside rapid transfers as their time becomes more precious.

Megahub airports are continuously undergoing redevelopment, frequently seeking to squeeze more and more capacity from existing terminals or runways.

That balance between contact piers and immediate connectivity, or bussing operations and compromising connectivity, requires airports to embrace the latest technology and innovative strategies while also investing in significant redevelopment.

This is a careful balance, especially if over half or three-quarters of your traffic is connecting and may spend little or nothing on the airports retail offering.

However aspirational, nationalistic or big the budget – sadly – not every airport can be a Megahub. And indeed, many would probably prefer not to even aspire to such visions and instead create their own valuable market position.

In 2024, there were over 1,100 airports worldwide that averaged more than ten flights a day, and approximately 4,200 airports that handled some scheduled flights in a year.

Therefore, Megahubs account for a very small percentage share which highlights that each airport has a role to play in the world of aviation. So, if you either cannot or do not want to be a Megahub, are there alternate positions and opportunities to develop? Absolutely!

Regional connectivity can be a powerful position

The world is a big place and while long-haul connectivity is important, it only caters for a proportion of the market and the majority of flying is within a domestic or regional market.

Airports such as Panama and Casablanca – with the support of the local carriers – have developed really focused networks of connectivity across specific markets that both create those valuable supporting volumes, and in many cases above average revenues, as they connect the more obscure and therefore higher yielding traffic flows.

In both cases, the typical sector lengths for the airlines operating are between two to five hours which allows for efficient crew and fleet utilisation without creating expensive night stop patterns for crews, and in many cases, low weekly frequency services rather than daily services are operated.

Instead of a continuous eighteen or twenty-four hours of high pressure, airports experience intense peaks of about two hours, occurring two to four times a day, which ensures necessary connectivity and offers travellers an excellent connecting experience.

While over time there is inevitably a need for some infrastructure development, the daily construction site characteristic of Megahub airports is avoided allowing both airport operators and airlines to focus on maximising their revenues and assets.

There is absolutely nothing wrong with being regionally focused, in fact it’s a great position to have, but can the same be said of a segment specific airport?

Segment specific airports

Where once airports were all the same, we now have Megahubs, regional hubs and now segment specific or segment airports.

The last twenty years has seen the development of numerous airports dedicated purely to the low-cost airlines, either because they had the long-term capacity to accommodate the demand or because various regulators have directed traffic to that airport facility.

Certainly, the opening of London Stansted was a happy coincidence with the rapid development plans of Ryanair who certainly would not have had access to the levels of capacity they required at London Gatwick for example.

While London Stansted has in recent years attracted some prestigious legacy airlines, it is Ryanair’s base, and the mere mention of their name sends a shudder through some carriers who might otherwise have an interest in operating from the airport.

For the airport operators, of course, the skill in accommodating the low-cost airline passenger is in maximising the non-aeronautical revenue streams, and while some travellers may complain about the barrage of retail products on offer, for the majority spending cash in the airport is part of the holiday experience.

Specialist low-cost airports have developed in all of Europe’s major markets and the ‘model’ is rolling out in Asia and the Middle East and their presence will only increase in the coming years.

Segment specific airports have also created great, and in many cases, incontestable positions based around a combination of geography and seasonal weather conditions or events.

Greek Island airports are the extreme of such segment facilities, catering for the mass summer sun market but almost closing operations from November to April as the final tourists depart.

Airports such as Rovaniemi in Finland’s Lapland region have created a whole leisure product around a few seasonal weeks of the year, initially based on day trips but now increasingly involving three or four-day packages that have sent passenger numbers soaring.

And in Christchurch, New Zealand, the seasonal advantages of a southern hemisphere summer and vast range of perishable products have created a market in which both cargo and passenger airlines add significant capacity in what is an off-peak period elsewhere.

All of which proves that for each airport in the world there is a need to both understand your market and cater for that markets needs as cost effectively as you can.

Being big or even mega may be nice although it does create daily headaches, but it’s equally nice to be close to your local market and customers and maybe even have time for a coffee with that frequent flyer you see every week.

And ultimately, at the end of the day, where would a Megahub be if it didn’t have connectivity from that regional hub or that niche local airport which makes all the difference to their connectivity ranking. Small can be beautiful and important!