Figure 1.1 World’s Largest Passengers Airports
After deregulation, most of the surviving major carriers tended to construct nationwide hub-and-spoke networks with several hubs to facilitate travel between different regions of the country. The advantages of large airlines were further deepened when nationwide hub-and-spoke networks were coupled to computer reservations systems and frequent flyer programs.
The Chicago Convention of 1944 established the basic geopolitical guidelines of international air operations, which became known as the air freedom rights.
First and second freedom rights are almost automatically exchanged among countries. The US, which emerged from World War II with by far the strongest airline industry in the world, had wanted third and fourth freedom rights to be freely exchanged as well. Instead, these and the other rights have been the subject of hundreds of carefully negotiated bilateral air services agreements (ASAs). In an ASA, each side can specify which airlines can serve which cities with what size equipment and at what frequencies. ASAs often include provisions that also regulate fares and the sharing of revenue among the airlines serving a particular international route.
Yet even in international markets, the extent and degree of state intervention has diminished. An important trend in the past decade has been the proliferation of Open Skies agreements. Open Skies agreements remove most restrictions on the number of carriers and the routes that they may fly between two countries. By the end of 2006, the US, for instance, had such agreements with nearly 80 countries.
Indeed, the US has pursued a very specific strategy playing one country in a region against another, putting pressure on Japan to liberalize its markets for instance by inaugurating Open Skies agreements with Singapore, Taiwan, South Korea and other Asian economies. Potentially the most important Open Skies agreement would be between the US and European Union. Moves in that direction have been stymied by US unwillingness to relax restrictions on foreign ownership of American carriers, among other concerns.
Nevertheless, many more airlines now operate internationally than before the liberalization of the airline industry began in the 1970s. As a result, on intercontinental and transcontinental routes, the former dominance of the 747 has been challenged by longer-range, widebody twinjet (two-engine jetliners) like the Boeing 767, Boeing 777, and Airbus A330. The triumph of widebody twinjets is most evident in the transatlantic market. The transpacific market is more concentrated among a smaller number of gateway cities, and the 747 is still dominant; but there is a clear trend towards fragmentation and displacement of the 747 by smaller aircraft, including ultra-long-range ones like the A340-500.
An important aspect of international airline networks is the recent formation of alliances. Alliances are voluntary agreements to enhance the competitive positions of the partners, particularly where the persistence of restrictive bilateral ASAs make it difficult for an airline to expand on its own. Members benefit from greater scale economies, a lowering of transaction costs, and a sharing of risks, while remaining commercially independent. The first major alliance was established in 1989 between KLM and Northwest Airlines. Today, the largest alliance is the Star Alliance, which was initiated in 1993 by Lufthansa and United Airlines. In 1996 British Airlines and American Airlines formed the oneworld alliance. Members of airline alliances cooperate on scheduling, frequent flyer programs, and equipment maintenance, and schedule integration. Most importantly, they permit carriers to tap markets that would otherwise be beyond their reach. Indeed, each of the major alliances encompasses almost every significant market across the globe, although each is dominated by US and European carriers.
A final important aspect of airline networks is the emergence of separate air cargo services. Traditionally, cargo was carried in the bellyhold of passenger airplanes, and provided supplementary income for airline companies. However, since passengers always had the priority when a plane was overloaded, such air freight services tended to be unreliable. Moreover, passenger aircraft are operated on routes that make sense for passengers, but may not attract much cargo. Today, about half of all air cargo is carried in dedicated freighters, aircraft in which goods are carried both on the maindeck and in the bellyhold.
The rapid expansion of air passengers and air freight flows fostered by globalization has made everything about the world’s great airports bigger. They are bigger in the volumes of traffic they handle, their sizes and the distances that separate them from the cities they serve, their costs and economic impacts, their environmental consequences, and the political controversies they engender.
By the year 2000 the airport terminal had become, strategically, the most important building type in the world. The very importance of airports globally has intensified the local conflicts they provoke. Indeed, a fundamental feature of airports is the degree to which they are set in at several scales:
Regional/National/Global. Airports are the engines of the global economy. They mediate currents of people and goods. For example, one factor propelling the growth of Dubai as an air transport hub is the fact with new ultra-long-range aircraft like the A340-500 any two locations on earth can be linked via a stop in Dubai.
Local. Airports, especially large ones, are defining features of the communities in which they are set. A large airport generates thousands of jobs directly and thousands more via forward and backward linkages.
Of course, the global and local impacts cannot be looked at separately. One positive way in which they come together in the case of airports is the location of corporate headquarters. A number of studies have shown a pronounced tendency for headquarters to cluster in cities with good international air accessibility.
On the other hand, the articulation of airports at several scales creates the potential for significant conflict. For instance, in Chicago, the USD 7 billion O’Hare Modernization Program promises to significantly reduce delay in the US air transport system benefiting travelers from throughout the nation (and even internationally), but the costs will fall heavily on local residents, particularly those living in the 530 residences that will be torn down to make way for the airport’s new and realigned runways.
Pipeline transport
Pipelines are a unique form of transportation used to move liquids, gases, or solid / liquid mixtures over great distances.
Pipeline routes are practically unlimited as they can be laid on land or under water. The longest gas pipeline links Alberta to Sarnia (Canada), which is 2,911 km in length. The longest oil pipeline is the Transiberian, extending over 9,344 km from the Russian arctic oilfields in eastern Siberia to Western Europe. Physical constraints are low and include the landscape and pergelisol in arctic or subarctic environments.
Pipeline construction costs vary according to the diameter and increase proportionally with the distance and with the viscosity of fluids (from gas, low viscosity, to oil, high viscosity). The Trans Alaskan pipeline, which is 1,300 km long, was built under difficult conditions and has to be above ground for most of its path. Pipeline terminals are very important since they correspond to refineries and harbors.
Pipelines are commonly used to transport crude oil. Oil pipelines have been constructed in all parts of the world, primarily in oil-producing regions such as the Middle East, the North Sea, southern Russia, the South China Sea, Texas, Oklahoma, and Alaska. In 1996 there were approximately 320,000 km (approximately 200,000 miles) of pipelines for crude oil or petroleum products. Also in 1996, the latest year for which figures are available, there were 2,053,591 km (1,276,315 miles) of pipelines for natural gas in the United States. Pipelines are also used to transport solids suspended in liquids, such as coal slurry, which consists of powdered coal suspended in water.
Pipelines for major energy resources (petroleum and natural gas) are not merely an element of trade. They connect to issues of geopolitics and international security as well, and the construction, placement, and control of oil and gas pipelines often figure prominently in state interests and actions. A notable example of pipeline politics occurred at the beginning of the year 2009, wherein a dispute between Russia and Ukraine ostensibly over pricing led to a major political crisis. Russian state-owned gas company Gazprom cut off natural gas supplies to Ukraine after talks between it and the Ukrainian government fell through.
Oil and gas pipelines also figure prominently in the politics of Central Asia and the Caucasus.