The Role of Demand Uncertainty in Airline Network Structure
AbstractIn this paper, we provide another reason that may explain the adoption of the hub-and-spoke network structure in the airline industry. We show that when an airline has to decide on its capacity before the demand conditions are perfectly known, a hub-and-spoke network structure by pooling passengers from several markets into the same plane helps the firm to lower its cost of excess capacities in the case of low demand and to reduce its opportunity cost of rationing in the case of high demand.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Laval - Recherche en Energie in its series Papers with number 99-04.
Length: 12 pages
Date of creation: 1999
Date of revision:
Contact details of provider:
Postal: UNIVERSITE LAVAL, GREEN, DEPARTEMENT D'ECONOMIQUE, QUEBEC G1K 7P4.
Phone: (418) 656-2096
Fax: (418) 656-7412
Web page: http://www.green.ecn.ulaval.ca/
More information through EDIRC
AIRLINES ; NETWORK ; UNCERTAINTY;
Other versions of this item:
- Barla, Philippe & Constantatos, Christos, 1999. "The Role of Demand Uncertainty in Airline Network Structure," Cahiers de recherche 9903, Université Laval - Département d'économique.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.