Aviation connects the Netherlands with the world, but needs to be balanced with other social interests

SEO’s aviation economics team has a broad and long-standing experience in the economics of aviation. Some key examples of our aviation research are our in-house aviation models. In particular, our NetScan connectivity model can map aviation connectivity in detail, while our NetCost model allows us to model the behaviour of travelers and airlines, so as to analyse the impact of sustainability policies, for example. In addition, our aviation team has excellent expertise on freight, intermodality, sustainability, innovation, aviation service areas, and the impact of aviation policy. They conduct research for airlines and airports and for ministries, shareholders, and the European Commission.


How well is an airport connected to the rest of the world?

Airports facilitate accessibility. An extensive aviation network ensures that passengers and cargo can reach the most exotic destinations quickly and at low cost. For this reason, internationally oriented companies prefer to locate near an airport with a large network of air connections. Given the increasing economic importance of accessibility in our globalised world, connectivity also plays an increasingly prominent role in policy discussions.

With our unique NetScan connectivity model, we provide insights into the degree to which airports or regions are connected to the rest of the world and which airlines are responsible for these connections. How good is the offered transfer product for transfer passengers and which airports offer the most connecting flights? Our connectivity analyses depict competitive relationships and at the same time reveal the strengths and weaknesses of aviation networks.

On an annual basis, SEO conducts the Network Quality Monitor and State Guarantees for the Dutch Ministry of Infrastructure and Water Management. In this monitor, the connectivity of Schiphol is compared with that of competitive (transfer) airports in Europe and beyond. We also publish the Airport Industry Connectivity Report annually. Thiss report monitors the connectivity of all airports that are members of ACI EUROPE. In addition, we conduct ad-hoc detailed connectivity analyses for airports and foreign governments.

What are the socio-economic and climate effects of aviation policy and business decisions?

Due to cost increases and capacity restrictions, travel costs for passengers and businesses are rising. At the same time, flight offerings are limited, which has a positive effect on the living environment and the climate. The various effects can be weighed against each other by expressing them in terms of money as much as possible. For this purpose, SEO applies the methodology of the Social Cost-Benefit Analysis (SCBA).

We have unique models to quantify the socio-economic effects of policy or business decisions. Behavioural responses of passengers and shippers and their social effects are modeled using SEO’s own NetCost and NetCargo models. Climate effects of aviation are estimated using an emission model. SEO has extensive experience in the socio-economic effects of expansions in airport capacity. To gain insights into the flights that are most important for a country, we can also estimate the effects at the individual flight level. Additionally, we estimate the effects of flight taxes and other cost-increasing measures.

How does aviation demand develop and when do potential capacity problems arise?

For making well-timed policy or investment decisions, it is important to have insight into future demand development. By comparing the transport forecast with the available capacity, you get an idea of the moment when capacity problems arise.

Our forecasting model takes into account not only economic and demographic developments but also developments within the aviation sector in terms of costs, networks, and business models. The model distinguishes between different aviation markets, airlines, and types of passengers, thus providing a detailed picture of the development of different types of transport at an airport. Emissions can also be linked to the forecasts. The model has been successfully used for airports for their long-term master planning. In addition, our forecasting model provides input for impact studies, where the effects occur over a longer term.

How expensive is an airport compared to its main competitors?

The attractiveness of an airport for airlines and passengers is determined, among other things, by the level of costs. SEO has developed a methodology with which the level of airport charges and government levies of airports can be compared with each other. This gives you insight into the cost levels of different airports.

SEO conducts the Airport Charges and Government Levies Benchmark annually for the Ministry of Infrastructure and Water Management. The analysis can also be part of a broader study into the competitive position of an airport.

What is the size and economic strength of an airport’s service area?

The success of a new air connection is largely determined by the demand from the service area (“catchment area”). Airports can use information about their catchment area in marketing towards airlines.

The SEO Airport Catchment Area Database (ACAD) provides insight into the size and economic strength of the catchment areas of European airports. The database contains a range of variables for each airport, including population size, GDP, employment, number of hotel beds, education level, and more. SEO continuously updates this database. The data can be visualised through maps. We offer the ACAD as a data product. Additionally, based on the data, we also conduct analyses on the market potential of new routes and competition between airports.