ARTICLE IN PRESS
Journal of Air Transport Management 12 (2006) 40–46
www.elsevier.com/locate/jairtraman
Air transport and tourism—Perspectives and challenges for
destinations, airlines and governments
Thomas Biegera, Andreas Wittmerb,
a
Institute for Public Services and Tourism, Dufourstrasse 40a, CH-9000 St. Gallen, Switzerland
HSG-Center for Aviation Competence, CFAC-HSG, c/o Institute for Public Services and Tourism, IDT-HSG, University of St. Gallen, Dufourstrasse 40a,
CH-9000 St. Gallen, Switzerland
b
Abstract
Air transport and tourism are interlinked. Tourism is a driving factor for and, in some cases, a stimulator of change in air transport;
most notably the development of new business models such as charter airlines. On the other hand, air transport opened new destinations
and tourism forms such as long-haul excursions. Here these interlinks are analyzed in a system model. For the strategic development of
destinations, a clear airline policy and air access strategy seems to be necessary. For airlines an assessment and understanding of the
business models of destinations is essential. By shaping the external regulative environment of air traffic, government may influence air
traffic as well as tourism.
r 2005 Elsevier Ltd. All rights reserved.
Keywords: Tourism; Air traffic; Business models
1. Introduction
It is too short-sighted to just consider a uni-direction
influence from air transport as a driving factor of tourism.
Developments in tourism, especially new forms of tourism
and new destinations, also affected air transport by
influencing demand. The emergence of attractions such as
theme parks or the requirements of second home owners for
flexible travels to their secondary property have been
important in creating large and regular traffic streams that
in Europe are now supporting some low-cost carriers. New
forms of leisure breaks, like short vacations, visit friends and
relatives (Bieger and Laesser, 2001), have introduced the
need for greater flexibility in the transport system. Here we:
develop a systems model to analyze the interrelation
between air transport and tourism,
develop an analytical framework to analyze these
interrelations based on the most important influential
element of this systems approach,
Corresponding author.
E-mail address: andreas.wittmer@unisg.ch (A. Wittmer).
0969-6997/$ - see front matter r 2005 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jairtraman.2005.09.007
derive conclusions for airlines destinations and policy
makers.
2. Framework
The interactive development of air transport and tourism
can be separated into a number of overlapping phases:
Tourism as a neglected business. Scheduled and regular
air transport began following World War I with postal
services and services for business people. But very early,
in the 1930s, with the emergence of bigger planes such as
the DC2 and DC3, leisure and tourism traffic became an
element of the traffic carried.
Tourism as a secondary activity. In the aftermath of
World War II, with the abundance of large airplanes
available, network and flag carriers relied more on
passenger revenues from tourist traffic. Swissair even
operated in the 1960s, e.g., a winter link from London
directly to the upper Engadin to St. Moritz. New type of
airlines also emerged. Charter carriers, often operating
with DC4, DC6 and similar aircraft opened new
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T. Bieger, A. Wittmer / Journal of Air Transport Management 12 (2006) 40–46
This short chronological analysis shows the strong interlinks between the development of tourism, especially
specific forms of tourism and destinations, air transport
and different models of air service supply. Air transport
has a major quantitative influence on tourism:
Air transport is the main form of transport to many
tourist destinations in some cases it constitutes up 100%
of the international tourism arrivals (Table 1).
The availability of cheap air transport can also be
considered as one of the main driving forces in
international tourism growth. There is a strong correlation between the number of air travels and the
international arrivals of tourists (Fig. 1).
2500
2000
Million
0
Year
Fig. 1. International tourist arrivals and air travels; source: World
Tourism Organization, 2002.
Japan
Taiwan
Australia
New
Zealand
Philippines
Korea
Dominican
Republic
Air transport’s share
of arrivals (%)
100
100
99
99
Cyprus
India
Thailand
84
83
80
Greece
79
Egypt
Singapore
76
74
Puerto Rico
73
98
95
94
Source: Keller, 2002 (based on World Trade Organization, Madrid, 2000).
In well-developed travel markets air transport is now the
main travel mode for overnight stays of more than four
nights. The share of charter flights, however, has been
decreasing. This is seen, e.g., in the Swiss travel market,
which is an affluent country that has a well-established
travel industry (Fig. 2).
The structure of tourism, in terms of type of destinations or
nature of travels, has also been influenced by air transport
development. The introduction of LCC services, e.g., has
considerably enhanced transport quality to many destinations. In northern Italy, e.g., the advent of low-cost airlines
has opened new tourist markets (Signorini et al., 2002). The
emergence of long-haul charter flights allowed the development of ‘‘exotic’’ destinations such as the Caribbean
Islands, the Maledives and Seychelles (Kaspar, 1993). This
trend has brought with it a significant growth in ‘‘winter
tourism’’ as individuals who have in the past simply seen
skiing as the only available winter option have now
brought warmer, if more distant, destinations into their
vacation portfolios.
3. Systemic models of air transport and tourism
Tourism can be characterized in more than one way:
Air transport’s share
Country
of arrivals (%)
1000
500
Table 1
Air transport’s share of international tourism in specific places for the year
2000
Country
Tourist Arrivals in Mill.
Int. Air Travels in Mill.
1500
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
destinations for traditional markets in the US and
Europe such as the Canary Islands, Hawaii and
Barbados.
Specialization in tourism. With the development of widebody planes, a fresh dimension of tourism and air traffic
emerged. The new generation of aircraft reduced costs
and stimulated even cheaper fares and airlines had to
rely more on the leisure and tourism markets to fill the
additional capacity available. New fare categories, such
as Apex and Superapex fares, laid the grounds for longhaul intercontinental tourism.
Tourism and business traffic combined. The latest
developments have been stimulated by the deregulation
of the air transport industry in from the late 1970s in the
US and from the late 1980s in Europe. New business
models emerged to compete with the flag and network
carriers—the low cost carrier (LCC). With their pointto-point services, often involving peripheral airport and
very cheap prices, this new of air transport has attracted
significant traffic volumes. New forms of tourism, such
as short-stay city tourism and ‘‘residential/second home
tourism’’, have ermerged and traffic involving visiting
friends and relatives has fed this new type of air service.
LCCs have in some cases replaced traditional charter
services on many shorter haul origin–destination pairs.
41
Tourism includes all activities that result when people
travel to, or stay, at a place that is neither their main and
permanent domicile nor their place of work (Kaspar,
1996).
The World Tourist Organization (WTO) defines international tourists as persons who visit another country
than the one that is their usual residence for any other
reason than for working (Inskeep, 1991).
Modern tourism research analyses the interrelation of
different spheres of tourism and embraces the study of such
things as demand, supply and transport within the relevant
environment. The methodology underlying the system
analyses applied to tourism has changed during the last
30 years and followed the developments of system analyses
in general (Bieger, 2004) (Fig. 3).
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Means of transportation to destination
42
56%
Car, motor home,rental car
60%
15%
Railway
2001
1998
14%
12%
Scheduled flight
13%
6%
Charter flight from Swiss airport
6%
1%
Boat/ ship
0%
8%
Bus
5%
2%
Other means of transportation
2%
0%
10%
20%
30%
40%
50%
60%
70%
Shares with regard to all trips
Fig. 2. Means of transportation to Swiss destinations (all trips); source: Laesser and Bieger (2001).
Level
Type of relationship
Example of
authors
Closed systems
Simple, linear causalities,
→ suitable for simple
problems
Open Systems:
basic configuration
Causalities as structural model
which is open to other systems
Open Systems
with interactions
Consideration of interactions,
f
feedback,intensity,
etc., to manage
complicated problems (e.g.paper
computer)
→ complicated problems
• gen.Vester1986
Self referring
systems
Consideration of system
transformation
• gen. a.o.Luhmannn
1984
• Rüegg-Stürm
1999
→ complex problems
Examples of tourism
systems
Implicitp
Hunziker/Krapf
1942
Ulrich 1968
Kaspar 1975
Krippendorf 1986
• Gomez/Probst1996
Bieger/Von Rohr
2000
Fig. 3. Development of system analyses in tourism; source: Bieger, 2002. (Bieger and von Rohr, 2000; Gomez and Probst, 1997; Hunziker and Krapf,
1942; Kaspar, 1975; Krippendorf, 1986; Luhmann, 1984; Rüegg-Stürm, 1999; Ulrich, 1968; Vester, 1986).
Fig. 4 shows the connections and interactions between
air transport and tourism as they are now generally
understood.
The attractiveness of tourist destinations often stems
from their natural resources such as their intrinsic natural
beauty or the local culture combined with the man-made
infrastructure that is available—including hotels, restaurants, shopping centres and entertainment venues. The
elements are often interlinked. Natural resources can make
an excellent basis for the development of infrastructure;
beach resorts, skiing centres, or ecotourism. Infrastructure
can be integrated with the natural resources or local culture
to generate synergies that stimulate demand from tourists
even further.
Tourism demand can be divided into the pure quantity
of demand, the quality of demand in terms of visitor
structure and the structure of visits in terms of length, goal
of visits, etc. There are also important interlinks. The
structure of visitors, e.g., heavily influences the atmosphere
of a certain place.
The likely nature of tourist visits influences the types of
infrastructure that are built. Further, there are external
effects if there are so many tourists that they reduce the
intrinsic quality of the tourist experience; Disneyland, e.g.,
limits entry to ensure lines do not become too long and
many resort areas limit hotel rooms to ensure beaches or
other natural attractions are not overcrowded or damaged.
In terms of air transport, some island destinations limit the
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T. Bieger, A. Wittmer / Journal of Air Transport Management 12 (2006) 40–46
regulative environment
network/alliance
environment
43
social environment
technical environment
Destination
Attraction
quant ity of visitors
economic environment
of homemarket
ecological
environment
political
environment
type of aircraft
economic
environment
airport
quality of visitors
Destination
Atmosphere
frequencies
Destination
Infrastructure
airline
business model
network strucure
structure
of visits
Destination
revenue model/
businessmodel
price level
destination
air transport
Fig. 4. System model of air transport and tourism.
number of flights and their arrival and departure times to
both ensure the local ‘‘environment’’ is maintained. The
‘‘quality’’ of visitors, often measured in terms of their
spending power, is also important and this links in with air
transport provision. The timing and frequency of flights,
together with the nature of the airlines offering services,
can affect the quality of the tourists arriving. On the air
transport supply side, the network structure of the airlines
and especially the position of the destination airport within
these networks can influence a market’s accessible and with
this the fare structure and the types of tourists who will
travel.
Airports, and especially airport infrastructure and
strategy, as well as airlines are important within this type
of framework. Destinations in reasonable proximity of an
airport with high-quality infrastructure—e.g., runway of
more than 3000 m, comfortable departure and arrival
services, etc.—tend, for economic reasons, to attract bigger
airplanes at lower frequencies. The smaller airports, and
those with lower quality services, tend to offer feeder
services by the major carriers and point-to-point services
from LCC and charters—smaller aircraft are the norm.
Whether an airport is served by purely with LCCs pointto-point services or develops to become a hub (or base in
the radial network structures that many LCCs now favour)
largely depends on its location, infrastructure and its home
market. The regulatory environment in which it is provided
as well as technical developments also heavily influence air
transport supply. For example, the development of efficient
regional turboprops and more recent regional jets, allowed
for a new network structure that also included smaller
airports. Regulatory policy towards alliances and crossborder access has also played an important role in the ways
in which airlines have developed in many tourist markets.
There are additional considerations. An airport too close
to a destination is often afflicted by excessive noise that can
reduce the attractiveness of local hotels and beaches and is
hardly conducive to ecotourism. Within our framework,
links between tourism and air transport can be shown
easily. Development of a new attraction based on infrastructure such as a theme park leads to additional short
visits to the area, but this in turn adversely affects the
quality of the facility for visitors. Airlines might react by
increasing the frequencies or changing the type of aircraft
used. Tourist infrastructure of this type might also attract
new types of airlines—e.g., low-cost carriers—that in turn
add even more visitors. On the other hand, the inclusion of
an airport into a strategic alliance network, e.g., as with
Bozano a few years ago, can affect the quality of visitors.
In general, an improvement of an attraction at a
destination draws forth developments of the local airport
that can in turn stimulate multiplier effects that attract
more air services; the airport may even develop into a hub
for a traditional airline or a base for an LCC. As the
multiplier develops, the additional visitors can generate
more local revenues for further tourist infrastructure; Las
Vegas is perhaps the most pronounced example. Virtuous
circles can develop. Vicious circles may, however, develop
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T. Bieger, A. Wittmer / Journal of Air Transport Management 12 (2006) 40–46
if a tourist destination is in decline as it loses its
competitiveness. Network carriers may then be replaced
by LCCs carrying lower quality tourists. Any subsequent
deterioration in the tourist attractions will add to this
downward spiral.
4. Business models as a key factor
The destination subsystem is largely driven by the
configuration of its attractions. Attractiveness in this
context is based on a combination of the general atmosphere in the location and quality of accommodation and
services and by the natural resources and social environment in the area; the strategic success factors of the
destinations (Pümpin, 1986). It is essentially these features
that attract tourist expenditure and, with it, local incomes.
There are destinations that rely heavily on their basic
resources, especially places of natural beauty such as the
Iguac- u Waterfalls. Very often there is a large variety of
tourist service offered to exploit such resources and the
resultant incomes are widely spread across a range of
tourist services.
A second type of destination relies more on the quality of
the man-made services themselves with the natural features
being exploited more as a commodity; beach and ski
resorts may be seen to fall into this category. This type of
resort usually gets most of its revenues through accommodation, entertainment and activity facilities. There are
two different subtypes of these destinations. There are
more centrally managed destinations where a company is
given legal rights to control and coordinate the whole
service chain; it is thus possible to have an integrated
service chain that allows for coordinated revenue systems
with hotels rooms at low prices and the profit being made
from supplementary services such as transportation or
local amenities. Decentralized management generally
means independent small companies. A third type of
destination can involve an even higher level of commoditization; e.g., a lot of second homes may dominate,
implying a decentralized ownership structure. These
destinations can be seen as individualistic and atomistically
organized.
There also further differences in this final category, e.g.,
between the centralized forms of destinations where there is
no active management of the second homes and situations
where there is central professional management and renting
out of second homes (Bieger et al., 2005a, b). Typically,
North American resort destinations can be considered as
largely centrally organized, but there are some that rely
mainly on traditional hotel business and others on private
second homes. There are, in other words, a variety of
business models.
A business model is a simplified plan of how companies
create their value added in networks (Bieger et al., 2002a, b,
c) and there exist different types of structural approaches
to business modeling (Amit and Zott, 2001). Bieger
et al. (2002a, b, c) differentiates the two extreme types
of destinations using an eight-dimensional classification
(Table 2).
These business models of destination behaviour rely on
assumptions about different structures of visitor streams.
Decentralized destinations dominated by second homes,
e.g., produce steady visitor streams spread throughout the
week because they often embrace short-time holidays.
Centrally managed hotel-dominated destinations, on the
other hand, often still rely on traditional week-to-week
Table 2
Different business models of destinations
Customer groups benefit
Communication
Revenue model
Model of growth
Core competence
Useful networking partner
Coordination model
Source: Bieger, 2002.
American ski resorts; the example of Intravest
Traditional destinations
High-income, wealthy babyboomer
Sport resort with focus on golf, ski and nature
experience
Clear establishment of the single local brand like for
example
Whistler, the brand of single mountains like for example
Blackcomb for ambitious snowboarder and skier
Consequent internalization of indirect returns; up to
50% of consolidated group return from sales of
property
Creation of customer-relation programs; purchase new
destinations and mountains
Design of resorts, promotion of innovative forms of
property (time share)
Tour operators, travel agencies; airlines as feeder
Wide target group
Wide definition of the benefit of nature experience,
recovery, sport and culture
Decentralized, fragmented marketing
Internal network through hierarchy/ownership (all
essential suppliers of hotels, cable cars and ski schools
are in possession of a company); external network on
the basis of clear negotiated contracts
Classic, particular allocation of partial benefits (hotel
prices, mountain railway prices)
Decentred regular customer programs of individually
companies
Partially local culture
Strong dependence on internal and external network
partners
Internal network through market or partially implicit
contracts, external network through market or partially
explicit contracts
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low cost
resort
re
destination
se
second
homebased
charter
resort
re
destination
hotel
hot based
decentraly
d
managed
resort
re
destination
hotel
ho based
cetraly
ce
managed
re
regional
carrier
degree of
commoditization
degree of network complexity/
commodidization
organized inclusive tours for their business. Large intermediaries, mainly tour-operators, have a heavy influence
on this type of tourist structure. Attraction-based destinations also rely on strong visitor streams but also flexibility
throughout the week; the large increase in international
‘‘conferencing’’ adds to this when destinations are also
important business locations. The tourist industry in such
places relies on this mixed business and leisure traffic.
The air transport subsystem of the tourist industry can
also be structured according to business models of the
airlines. In general, airline business models can be divided
into network carriers (which may be broken down into
attraction
a
based
destination
de
network
n
carrier
strong fit
Fig. 5. Matching business models of airlines and tourist destinations.
45
subsets; main or core carriers of alliances, and regional or
sub-regional carriers), charter airlines and LCCs, as well as
newly developing special segment carriers cater, e.g.,
exclusively business travelers.
Different types of airline business models lead to a
difference in the traffic carried, and ipso facto to the nature
of the visitor stream (Fig. 5). Network carriers usually lead
cater to large numbers of average-paying customers with a
mix of business and leisure travellers in their hubs. They
often rely on strong inbound or outbound home markets,
although there are exceptions to this such as KLM.
Regional carriers often serve more remote midsize or
smaller destinations using smaller planes that provide less
capacity, but because of their relatively high fares they
generally move higher income (better quality) passengers.
Charter airlines, increasingly because of competition from
LCC on short-haul routes, operate on medium- and longhaul routes. The nature of their product often leads to
quantitatively large, but relatively inflexible, traffic
streams. The emergence of new quality classes on charter
planes can be explained as an attractive new segment to
their type of service. LCCs attract a mixed traffic; low fares
being important to many tourists with high price elasticities, but high frequency also being important to business
travellers with high travel time elasticities.
Comparing business models of destinations and airlines,
it seems feasible that in not all cases is there a synergy
Table 3
Business models of airlines and their impact on tourism flows
Business model
Network/hub airlines
Regional airlines
Low-cost carriers
Charter airlines
Success factors
Extensive market coverage/
market share and growth (due
to network effects)
Alliances
Serving niches
Simple processes
Tour operation relation/
integration
Flexible cooperation with
alliances
Cost efficiency
Domination of regional
markets
Search for niches
Cost efficiency
Cost effectiveness
Strong traffic flows
Integrated capacity
management
Driven by search for routes
with self-generating, strong
traffic flows
Driven by tour operators
interest in markets and
integration of the value
chain
Tourism flows (mass
tourism) as main and
often only product
Concentration on strong
tourist destinations
Driving factors at the
moment
Weight of tourism
Perspective of business
model
Perspective for tourism
Ability to adopt good and
homogeneous processes and
quality
Search for markets and
market share
Tourist flows as a secondary
product to get market share
and size
Consolidation, division of
markets leads to a reduction
of services to peripheral
destinations
Concentration on best-paying
segments
Better fit of capacities to wellpaying segments (smaller
planes, more frequency)
Side product for small groups
of tourists
Source: Bieger et al. (2002).
Regional tourism flow (in the
upscale segment) as
important part of the business
Concentration of business to
niches
Tourism just part of general
traffic flows, no special
attendance
Own structures of airports,
routes and markets
Closer cooperation with
alliances
Close cooperation with
regional incoming operators
and marketing organizations
Maybe in the very long run
blocked space for marketing
through tour operators
Individually marketed
seats
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T. Bieger, A. Wittmer / Journal of Air Transport Management 12 (2006) 40–46
between them. Table 3 provides an overview of some of the
key overlaps. Destinations offering important natural or
man-made attractions (such as historic cities) are traditionally served by network carriers that find them a suitable
base for their mixed traffic streams. On the other hand,
destinations with large number of decentralized managed
second homes, and thus a need for flexible traffic
connections, provide a good market for LCCs; witness
Nice and the northern Italian towns. Traditional hotel
destinations provide a good basis for charter services, and
especially in exclusive segments, for network carriers and
regional airlines.
5. Perspectives for policy makers, airlines and destinations
The development of air transport and tourism relies
heavily on each other; and this can lead to both positive
and negative outcomes. This interrelationship between
airlines and tourist destinations is taken into account,
either implicitly or explicitly, in the business models
adopted; they take time to study each other’s models. In
some cases airlines get involved in the planning and
development of tourist destinations, e.g., in advertising
initiatives and the planning of airport access facilities. The
tourist destinations often have an incentive to invest in
local airports that can allow larger aircraft to land and in
all-weather-conditions.
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