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Choice of Aircraft Size - Explanations and Implications

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Author Info

  • Moshe Givoni

    ()
    (Vrije Universiteit Amsterdam)

  • Piet Rietveld

    ()
    (Vrije Universiteit Amsterdam)

Abstract

To keep load factors high while offering high frequency service, airlines tend to reduce the size of the aircraft they use. At many of the world’s largest airports there are fewer than 100 passengers per air transport movement, although congestion and delays are growing. Furthermore, demand for air transport is predicted to continue growing but aircraft size is not. This paper aims to investigate and explain this phenomenon, the choice of relatively small aircraft. It seems that this choice is associated mainly with the benefits of high frequency service, the competitive environment in which airlines operate and the way airport capacity is allocated and priced. Regression analysis of over 500 routes in the US, Europe and Asia provides empirical evidence that the choice of aircraft size is mainly influenced by route characteristics (e.g. distance, level of demand and level of competition) and almost not at all by airport characteristics (e.g. number of runways and whether the airport is a hub or slot coordinated). We discuss the implications of this choice of aircraft size and suggest that some market imperfections exist in the airline industry leading airlines to offer excessive frequency on some routes and too low frequency on others.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 06-113/3.

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Date of creation: 01 Feb 2006
Date of revision:
Handle: RePEc:dgr:uvatin:20060113

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Web page: http://www.tinbergen.nl

Related research

Keywords: aircraft size; frequency; aviation; hub congestion;

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References

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  1. Savage, Ian & Scott, Burgess, 2004. "Deploying regional jets to add new spokes to a hub," Journal of Air Transport Management, Elsevier, vol. 10(2), pages 147-150.
  2. Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.
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  5. Johnson, Tracy & Savage, Ian, 2006. "Departure delays, the pricing of congestion, and expansion proposals at Chicago O’Hare Airport," Journal of Air Transport Management, Elsevier, vol. 12(4), pages 182-190.
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  7. Swan, William M. & Adler, Nicole, 2006. "Aircraft trip cost parameters: A function of stage length and seat capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(2), pages 105-115, March.
  8. Reynolds-Feighan, Aisling J. & Button, Kenneth J., 1999. "An assessment of the capacity and congestion levels at European airports," Journal of Air Transport Management, Elsevier, vol. 5(3), pages 113-134.
  9. Brueckner, Jan K., 2002. "Network Structure and Airline Scheduling," Working Papers 02-0112, University of Illinois at Urbana-Champaign, College of Business.
  10. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  11. Dresner, Martin & Windle, Robert & Zhou, Ming, 2002. "Regional jet services: supply and demand," Journal of Air Transport Management, Elsevier, vol. 8(5), pages 267-273.
  12. Wenbin Wei & Mark Hansen, 2003. "Cost Economics of Aircraft Size," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 37(2), pages 279-296, May.
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Citations

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Cited by:
  1. Flores-Fillol, Ricardo, 2009. "Congested hubs," Working Papers 2072/15844, Universitat Rovira i Virgili, Department of Economics.
  2. Pai, Vivek, 2010. "On the factors that affect airline flight frequency and aircraft size," Journal of Air Transport Management, Elsevier, vol. 16(4), pages 169-177.
  3. Wang, Kun & Gong, Qiang & Fu, Xiaowen & Fan, Xingli, 2014. "Frequency and aircraft size dynamics in a concentrated growth market: The case of the Chinese domestic market," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 50-58.

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