Technology, Business Models and Network Structure in the Airline Industry
AbstractNetwork airlines have been increasingly focusing their operations on hub airports through the exploitation of connecting traffic, allowing them to take advantage of economies of traffic density, which are unequivocal in the airline industry. Less attention has been devoted to airlines? decisions on point-to-point thin routes, which could be served using different aircraft technologies and different business models. This paper examines, both theoretically and empirically, the impact on airlines ?networks of the two major innovations in the airline industry in the last two decades: the regional jet technology and the low-cost business model. We show that, under certain circumstances, direct services on point-to-point thin routes can be viable and thus airlines may be interested in deviating passengers out of the hub.
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Bibliographic InfoPaper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number XREAP2010-14.
Length: 54 pages
Date of creation: Dec 2010
Date of revision: Dec 2010
Contact details of provider:
Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Barcelona, c/ Tinent Coronel Valenzuela, 1-11, 08034 Barcelona
Web page: http://www.pcb.ub.edu/xreap
More information through EDIRC
regional jet technology; low-cost business model; point-to-point network; hub-and-spoke network;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-23 (All new papers)
- NEP-COM-2011-01-23 (Industrial Competition)
- NEP-CSE-2011-01-23 (Economics of Strategic Management)
- NEP-IND-2011-01-23 (Industrial Organization)
- NEP-NET-2011-01-23 (Network Economics)
- NEP-URE-2011-01-23 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Flores-Fillol, Ricardo, 2009. "Airline competition and network structure," Transportation Research Part B: Methodological, Elsevier, vol. 43(10), pages 966-983, December.
- Flores-Fillol, Ricardo, 2010. "Congested hubs," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 358-370, March.
- Lluís Bermúdez & Antoni Ferri & Montserrat Guillén, 2011.
"A correlation sensitivity analysis of non-life underwriting risk in solvency capital requirement estimation,"
XREAP2011-12, Xarxa de Referència en Economia Aplicada (XREAP), revised Sep 2011.
- Lluís Bermúdez & Antoni Ferri & Montse Guillén, 2011. "A correlation sensitivity analysis of non-life underwriting risk in solvency capital requirement estimation," IREA Working Papers 201113, University of Barcelona, Research Institute of Applied Economics, revised Sep 2011.
- Veruska Oppedisano & Gilberto Turati, 2010.
"What are the causes of educational inequalities and of their evolution over time in Europe? Evidence from PISA,"
XREAP2010-16, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2010.
- Veruska Oppedisano & Gilberto Turati, 2011. "What are the causes of educational inequalities and of their evolution over time in Europe? Evidence from Pisa," Working Papers 2011/1, Institut d'Economia de Barcelona (IEB).
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