A business model enabling a passenger-distance-improved long-haul network to decrease transport inefficiencies

Abstract

The air transport system faces pressing challenges arising from CO2-emission reduction targets, fragmented passenger needs, and a highly competitive market environment. Aiming for a reduction of CO2-emissions in the long-haul sector, a holistic solution is suggested incorporating both operational and technological innovations in three areas: (1) changes in the air transport network structure, (2) (liquid) hydrogen as energy carrier, and (3) new aircraft and cabin design. To these ends, this paper focuses on the implications resulting from a passenger-distance improved air transport network. Demand pooling is proposed to enable higher load factors, offer more point-to-point connections for passengers, and generate new revenue sources for airlines. Based on a discussion of traditional airline business models, a seat exchange platform named “ShAirline” is proposed, allowing multiple providers to rent out cabin space. The underlying business model is evaluated considering implications for aircraft and cabin design, new passenger services, additional revenue opportunities, passenger journey times, required aircraft, as well as implications for airports. Findings indicate that the proposed seat exchange platform in conjunction with a change in aircraft ownership structure assist in removing inefficiencies across the current long-haul network and help offset barriers connected to the use of novel eco-efficient technologies.

Keywords

• airline alliances
• business model innovation
• cross-airline seat sharing
• decreased flight speed
• hydrogen aircraft
• transportation system