What exactly is sixth-freedom traffic and why are some airlines more successful than others?
In aviation terms, the sixth-freedom is defined as the carriage of passengers between two nations by the airline of a third country, but via its home base. In other words, passengers who board an Emirates flight in London, transit at Dubai, and carry on to Cape Town would be classified as sixth-freedom travellers.
Back when IATA had rigorous control of commercial aviation, the trade body disliked sixth-freedom traffic because it distorted some of its members’ interests by creating unfair advantages for certain carriers. Only since liberalisation of the market with low-cost carriers entering in the mid 1990s has the term become respectable.
Sixth freedom benefits travellers and airlines: travellers get more choice and keener fares, while airlines earn extra revenue and support for long-haul networks. Just look at the number of UK points served by the Netherlands carrier KLM – travellers based in Norwich, Leeds and Southampton wouldn’t have nearly as good global connectivity were it not for KLM.
Ticket prices tend to be less expensive because a sixth-freedom airline has to incentivise customers to make a flight change. However, encouraging travellers to make an en route change is not easy, as passengers prefer to fly direct. Some airlines are more successful than others. Why? To be successful, airlines need to have a strong network and a geographical location astride the main aerial routes. That would include airlines in Europe, the Middle East, the Gulf and Asia, which explains why KLM, Singapore Airlines (SIA) and Emirates are sixth-freedom masters. I place them in that order because KLM is considered the instigator, with SIA joining in the early 1970s and Emirates following in the mid-1980s.
At the losing end are carriers in Southern Africa, Australasia or Latin America, who are not located on global through routes. The US could be a sixth-freedom player were it not for the strict visa rules even for transit passengers.
The percentage of passengers travelling via the sixth freedom varies from market to market, route to route, and destination to destination. For commercial and political reasons, no airline will openly discuss sixth-freedom traffic. Neither will airports. London Heathrow, for example, will tell you how many passengers board SIA for Singapore, even though they know that many travellers will continue beyond Singapore.
Similarly, a greater number of Emirates’ passengers boarding at a regional airport would be travelling beyond Dubai, compared with those starting their journeys from London.
A home threat
Why the secrecy? All governments protect their national airlines, and a sixth-freedom carrier is viewed as a ‘threat’ by the home airline. For example, when SIA wanted to launch a route between Manchester and Singapore its application received opposition from British Airways. BA knew that if SIA could fly from Manchester, the latter would be carrying travellers not just to Singapore but also to onward points in Southeast Asia and Australasia. This would abstract traffic from BA’s services at Heathrow.
The matter became political. MPs in the northwest and local businesses all supported SIA because of the economic prosperity it would bring. So SIA’s application received the green light and, with BA showing no interest in starting a Manchester-Singapore route, this was the correct decision.
In Germany, Lufthansa is similarly protective over its domestic routes. Emirates for example can serve no more than four destinations in the country. Dubai’s national airline wants to serve Berlin but the German government refuses to allow this unless Emirates were to sacrifice one of its other four destinations.
Another great benefit of the sixth freedom is the ability to target certain markets in line with currency values and expected demand. For example, if a Southeast Asian airline realises it can earn more revenue from taking travellers from China or Japan to Australasia it will adjust its schedules and/or aircraft type to meet that demand. In such a case, Europeans taking the ‘Kangaroo Route’ would be the losers because they may find an inferior aircraft being deployed at the time they want to travel.
Another benefit is the way that BA, alone of its European rivals, can fuel its extensive North American network thanks to its connections beyond London. Likewise, with currency fluctuations one might find some European carriers serving certain countries rather than others depending on currency values. Sixth-freedom rights must be considered a win-win for customers and airlines alike.