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1-Hub, 2-hub or fully connected network? A theoretical analysis of the optimality of airline network structure

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  • Wang, Xiyan(Jamie)

Abstract

Multi-hub network structures are an increasingly important phenomenon in today’s airline networks. With current theoretical arguments for the single-hub solution leaving little room for the kind of multi-hub networks that exist nowadays, this paper sets up a formal model to explore the optimality of multi-hub networks, with or without competition. It is shown that a single-hub or a fully connected network may not be the optimal network configuration, while a 2-hub configuration may be favored under certain circumstances. In addition, the paper shows that competition can also affect an airline’s optimal choice of network: a 2-hub network can be preferable if a competitor enters the market.

Suggested Citation

  • Wang, Xiyan(Jamie), 2016. "1-Hub, 2-hub or fully connected network? A theoretical analysis of the optimality of airline network structure," Economics of Transportation, Elsevier, vol. 5(C), pages 12-23.
    • Handle: RePEc:eee:ecotra:v:5:y:2016:i:c:p:12-23
    DOI: 10.1016/j.ecotra.2015.09.003
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    Cited by:

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    3. Pels, Eric, 2021. "Product differentiation and network optimality," Transport Policy, Elsevier, vol. 110(C), pages 415-429.
    4. Pels, Eric, 2021. "Optimality of the hub-spoke system: A review of the literature, and directions for future research," Transport Policy, Elsevier, vol. 104(C), pages 1-10.
    5. Wang, Chunan & Jiang, Changmin, 2022. "How do pandemics affect intercity air travel? Implications for traffic and environment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 330-353.

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    Keywords

    Optimal networks; Hub-and-spoke systems;

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