Euro Deregulation Raises Profile Of International Hubs

<I>Amsterdam</I> - Europe has finally lifted its last barrier to full aviation deregulation: Earlier this month, it allowed European Union airlines to fly domestic routes in other EU countries for the first time.

Although no carrier has yet applied to operate such a route, national borders have long been meaningless to travel buyers whose companies are based many miles from their country's principal airport. These buyers are finding it easier and sometimes even cheaper to send their travelers long-haul via hubs outside their home country.

Perhaps the most popular pan-European hub is Amsterdam's Schiphol Airport, where 45 percent of passengers connect from other countries. In contrast, the figure for London Heathrow, the world's busiest airport for international departures, is 33 percent.

"The Netherlands has such a small home market that it has always focused on being a transfer airport,'' said Matt Button, marketing communications manager for KLM UK and Ireland.

Airline Expands Reach

The United Kingdom and Germany are Schiphol's largest markets for connecting traffic, and it is the former that has the largest impact, mainly because of KLM's 45 percent ownership of Air UK-for a long time the fourth-largest U.K. carrier after British Airways, British Midland and Virgin Atlantic. Now it has merged its sales and marketing operations with those of KLM, and the combined force claims to be the second largest in the United Kingdom in terms of sales through business travel agents.

Between them, KLM and Air UK operate flights to Schiphol from no fewer than 21 U.K. airports. Other airlines fly there from another three British airports. In contrast, only eight regional airports have feeder services to Heathrow, so it becomes easy to see why Schiphol is a more attractive option for companies based away from London.

Furthermore, Schiphol has manifest advantages over Heathrow as a connecting airport. It has one terminal and four runways, while Heathrow has two runways and four terminals, leaving most connecting passengers having to struggle from one terminal to another.

As a result, Schiphol is starting to make large inroads into U.K.-originating long-haul traffic. KLM claims that it accounts for 30 percent of all transfer traffic out of Glasgow and more than 50 percent out of Newcastle, in the northeast of England.

Some travel managers believe Schiphol is so superior they even send their travelers east to Amsterdam only to fly west again to U.S. destinations. One such person is Institute of Travel Management chairman Loraine Holdcroft, who also is company secretary for Anglo-Japanese automotive design and development company Ikeda Technology Europe, based in Newcastle. She uses Schiphol as a hub for flights to Ikeda's parent group in Japan and to its sister company in Detroit.

"We use Schiphol wherever possible,'' she said. "With only one terminal, we find it's far less confusing, especially for non-English-speaking staff. When Japanese people come to visit us for the first time, we fly them via Schiphol as a matter of policy."

Part of the reason that Ikeda's Japanese employees prefer Schiphol as a gateway is that the immigration process takes place at Newcastle, where lines are tiny. Arriving at Newcastle via Heathrow means passing immigration at Heathrow, where lines can start to approach JFK or Miami lengths.

The number of flights from Newcastle to Schiphol has just increased from three to four per day, further increasing the airport's appeal. "Admittedly, that is not as many as to Heathrow, but in some cases it can actually be quicker to use Schiphol, especially if you are going to the Far East," Holdcroft said. "Our people are more comfortable using it.''

Regional airports also are much quicker for outgoing British passengers. At Heathrow, it takes about 45 minutes to park and catch the courtesy bus, and minimum checkin time internationally is one hour. At Bristol, in the west of England, it takes around five minute to park and ride, and last checkin is 15 minutes before departure.

Holdcroft also believes there are financial savings to be made in addition to benefits of convenience. "We have an exceptional deal with KLM,'' she said, although she declined to reveal details. "I can save money for this company by using them, and others can also get special deals if they have a mind to negotiate based on volume.''

Nor is Schiphol the only foreign hub that Ikeda uses. Brussels is popular, particularly after Sabena's recent introduction of jet service on its Newcastle-Brussels route. "Sabena flies four times per day from Newcastle and there are some excellent prices,'' said Holdcroft, who tends to use Brussels for onward flights within Europe and Schiphol for long-haul destinations.

Another convert to foreign hubs is Robert Daykin, travel manager for leisure-to-home shopping company Littlewoods International, based in Liverpool. The nearest airport with scheduled international services is Manchester, which has six daily flights to Schiphol.

"We use Heathrow minimally and London Gatwick exceedingly rarely,'' he said. "We often use Schiphol via Manchester because it gives us convenience, quality and choice, and we can save up to 50 percent on business-class fares. With four runways, there are no problems getting off the ground, and there are excellent programs out of Amsterdam to the Orient.''

Littlewoods also uses Copenhagen as a hub from Manchester. Flying to Russia on SAS is half the cost of flying via London, he said.

Elaine White, Germany-based president of business travel consultancy The Global Group, is convinced that Europeans will soon be flying even more via hubs outside their home countries.

"It comes down to what the '90s are all about, and that is service," she said. "Whether you are flying out of your own country doesn't matter any more as long as the price is right and the service is right. We are going to see a lot more competitiveness on the hops to the hubs.