To churn or not to churn: why airlines drop routes

Eddie Gerald/Alamy via Reuters

When an airline announces a new route or increases flight frequency, the decision is not taken lightly. A final decision only comes after rigorous market analysis, assessment of likely profitability and, of course, tests against available resources. 

Adding new routes is a sign of growth for airlines, while new destinations mean more choice for passengers and airports – or so the thinking goes. 

But what happens when routes are dropped? And, more importantly, why are such decisions made and how much say does an airline have?

The network churn concept 

Some airlines apply the concept of network churn to their thinking. Like any other product, keeping the offer fresh is important, they reason. 

If airlines have limited resources, operate from airports that are congested, or predominantly serve leisure markets, then it can be advantageous to “churn” destinations. Airlines also churn when they identify their weakest performing routes and replace them with new destinations where they see opportunity. 

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Take this summer. While the overall number of airport pairs – the departure (origin) and arrival (destination) cities – offered by Middle Eastern airlines is roughly the same (at 1,603, against 1,592 in 2019), the totals mask big changes in destinations offered – and scrapped. 

To be exact, 459 airport pairs have disappeared. That represents a near 28 percent churn in only six years. It’s a remarkably high number of routes to drop, which reflects the challenges of operating in the region. 

Uncontrollable factors 

Airlines respond to market conditions and to the political climate between countries. Take the example of Qatar and Saudi Arabia. In the summer of 2019 there were no direct services between the two countries. Yet this summer – with a change of relationship – there are 4,930 scheduled flights spread across eight routes.

Responding to global events and opportunities is a sign of professionalism among regional airlines

Or look at the opening of services between Tel Aviv and the UAE in the summer of 2021. This resulted in several airlines launching services and collectively operating more than 2,100 flights last summer, up from zero in three years.

Sadly, factors outside the airlines’ control this summer will see that market and its various airport pairs decline considerably, as risks heighten.

Every day airlines assess the operational risk of their network, adjusting schedules at short notice where necessary.

The past few weeks have seen numerous carriers suspend services to Baghdad and Tel Aviv in light of increasing tensions. For some, these have been short-term cancellations, while others have dropped services for the foreseeable future. 

On other occasions, politics can create lucrative opportunities. The cessation of airline services from Europe to Russia resulted in a narrowing of options for those needing to travel. This represented an opportunity for both UAE-based airlines and their Turkish competitors.

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Since summer 2019 an additional six destinations have been added in Russia including routes such as Abu Dhabi-Moscow Sheremetyevo and a Sharjah-Ufa service.

In total 4,500 scheduled flights are planned this summer, up from 1,600 in summer 2019. Fuelled by plenty of last-minute travel, average fares between the UAE and Russia have been high. This is a welcome source of profit for local airlines. 

Fashion can also play an important role. Throughout the pandemic the Maldives, for example, remained an open access destination from most markets. That openness, combined with investment in new properties, is paying off.

This summer will see services from the UAE to the Maldives double compared to summer 2019. Successful marketing by the Maldives Tourism Board and a steady stream of bucket list holidaymakers have provided handsome opportunities for carriers operating from both Dubai and Abu Dhabi.

Commercial support 

Incentives are important. A case in point is the Saudi connectivity programme, which is now delivering results.

Airlines are operating 383 airport pairs, up from 349 in the summer of 2019 and 340 last summer, including routes such as Jeddah-Asmara, Jeddah-Brussels and flagship services to Guangzhou and Beijing. 

With a mix of new low-cost and legacy airline services it will be interesting to see how these routes develop. 

In contrast, withdrawing marketing or commercial support impacts the range of airports served by airlines.

For example, a daily Qatar Airways service from Cardiff to Doha has not returned to form post-pandemic. The Welsh government heavily supported the service to the tune of £500,000 a year, but the route has not returned, although a recent £200 million cash injection to Cardiff Airport offers some hope.

Qatar Airways has dropped other destinations including Windhoek, Pisa, Mombasa and Malta, all of which may have been reliant on commercial support. 

The constant ebb and flow of new routes makes the airline industry exciting.

Responding to global events and opportunities is a sign of professionalism among regional airlines. Ultimately, not every route can operate forever and, over time, some will churn. 

So when you see the next big announcement of a new route from an airline, just ask yourself what has been dropped to make that happen.

John Grant is partner at the UK consultancy Midas Aviation