ABSTRACT
In late 1980s, Aeroflot operated perhaps the most globally dispersed airline network the world has ever seen (Davies 1992: 86-7). Its international routes stretched around the world: 45 destinations in Europe, 36 in Asia, 36 in Africa, 9 in Latin America, and 4 in the USA and Canada. The carrier’s winged hammerand-sickle logo was seen from Kolkata (previously Calcutta) to Kingston, Bujumbura to Buenos Aires. Two decades later, most of that sprawling network was gone (Figure 6.1). In 2008, a much shrunken Aeroflot, operating from Russia rather than the Soviet Union, served only one city in Latin America (Havana) and only one city in Africa (Cairo). In all, the number of destinations beyond the former Soviet Union fell by about half. In contracting so dramatically, Aeroflot ran counter to the broader trend in the airline industry. Aeroflot has retreated while many carriers have expanded aggressively abroad. The explanation is simple: Aeroflot’s old network, especially the inclusion of places like Bujumbura, was driven by geopolitics. The demise of the Soviet Union left the carrier without the rationale or funds to continue flying to so many far-flung, economically unattractive destinations. Conversely, for many other airlines, the loosening of the links between the airline industry and governments has meant the freedom to expand. Before deregulation, for instance, Delta Air Lines was largely confined to the Southeastern US; by the late 1980s, the carrier had taken advantage of deregulation to literally spread its wings across the US yet it still had a minimal presence internationally – just a dozen points located primarily in Canada and Mexico. Then the spread of liberalization abroad and the sagging fortunes of Pan Am created new opportunities abroad for Delta. By 2008, the carrier flew to 111 destinations outside the US,1 including Moscow (author’s analysis of data in OAG 2008). And in late 2008, Delta merged with Northwest Airlines creating the largest airline in the world (measured by revenue, passenger-kilometers, fleet size, and other criteria), a status once enjoyed by Aeroflot. Aeroflot and Delta, despite the seemingly contrary directions in which they have changed, are both full-service network carriers, the type of airline that is the focus of this chapter. A network carrier is an airline that flies a mixture of
short-, medium-, and long-range routes, operates diverse fleets, and generally has at least one hub. In-flight and on the ground, network carriers tend to offer better services than most other airlines, but ultimately what such a carrier sells is its network. Both Aeroflot and Delta have responded to the new realities of the airline industry by trying to build more economically competitive networks; for one, that has meant an overall contraction, for the other expansion; but the ultimate goal is the same. Although low-cost carriers (LCCs) have drawn much admiring attention in recent years, it is network carriers, especially those with networks stretching around the world, that actually do much of the airline industry’s work. Of the 20 largest airlines, measured by traffic in 2007, 19 were network carriers (Table 6.1). Together, the 19 accounted for just over 50 percent of all revenue passenger-kilometers worldwide (based on Air Transport World 2008d and ICAO 2007). The only LCC to break into the top 20 was Southwest Airlines. LCCs are important and becoming more so. Their rise and significance are discussed in the next chapter. For now, our interest is in network carriers, specifically the geography of their operations, their alliances with one another, the daunting problems many face, and the implications of those problems for those who make their living at more than 10,000 meters.
