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BITRE | Report 1153.2.1 Flight frequencyAs discussed in Chapter 2, flight frequencies offered by an airline in response toa market change are implicitly constrained by its existing aircraft fleet in the shortterm. Aircraft size and fleet size are often linked to the presence of economies ofscale. Economies of scale are cost advantages accruing from larger scale operations.Theoretically, as an airline expands, the average cost of production falls. However,expansion beyond a certain point may subject an airline to the onset of diseconomiesof scale.For an aircraft of any given size, costs per passenger fall as more seats are filled. In asituation where an airline is not in a position to appropriately match the aircraft sizewith the characteristics of demand, it is possible for the airline to fly bigger planes onroutes with few passengers. However, it may need to reduce flight frequency to fillenough seats to cover costs and make a profit. While airlines need to trade off theseeconomies with flight frequency, passengers on the other hand prefer a wider rangeof travel options. Maintaining the benefit of economies of scale could mean tradingoff the quality of services which may subsequently affect the demand.In Figure 3.7a, regional air routes were disaggregated into those with an average flightfrequency of three or more return flights a week and those with fewer than threereturn flights a week. The number of air routes with an average of less than threereturn flights per week has always been higher than those with an average of morethan three return flights per week (Figure 3.7a). However, the gap between thesetrends has reduced significantly between 1989 and 2005. As shown in Figure 3.7a, thenumber of air routes with an average of less than three return flights per week hasfallen sharply since 1990, while the number of air routes with an average of at leastthree return flights per week has remained relatively stable.In Figure 3.7b, air routes were further disaggregated according to the followingfrequency groups:• once a week or less• two to four return flights per week• five to six return flights a week• one to four return flights daily• more than four return flights daily.An examination of Figure 3.7b reveals that regional air routes with an average of oncea week or less return services accounted for most of the decline in the number ofregional air routes over the years.68