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A note on optimal airline networks under airport congestion

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  • Fageda, Xavier
  • Flores-Fillol, Ricardo

Abstract

We extend the monopoly case without congestion in Brueckner (2004) by examining network choice in a duopoly where airport congestion can occur. Airlines prefer hub-and-spoke configurations, even if this implies higher congestion costs. Airlines may be inefficiently biased towards hub-and-spoke networks.

Suggested Citation

  • Fageda, Xavier & Flores-Fillol, Ricardo, 2015. "A note on optimal airline networks under airport congestion," Economics Letters, Elsevier, vol. 128(C), pages 90-94.
  • Handle: RePEc:eee:ecolet:v:128:y:2015:i:c:p:90-94
    DOI: 10.1016/j.econlet.2015.01.023
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    References listed on IDEAS

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    1. Daniel, Joseph I, 1995. "Congestion Pricing and Capacity of Large Hub Airports: A Bottleneck Model with Stochastic Queues," Econometrica, Econometric Society, vol. 63(2), pages 327-370, March.
    2. Jan Brueckner & Ricardo Flores-Fillol, 2007. "Airline Schedule Competition," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(3), pages 161-177, May.
    3. Flores-Fillol, Ricardo, 2010. "Congested hubs," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 358-370, March.
    4. Jan K. Brueckner, 2002. "Airport Congestion When Carriers Have Market Power," American Economic Review, American Economic Association, vol. 92(5), pages 1357-1375, December.
    5. Jan K. Brueckner, 2004. "Network Structure and Airline Scheduling," Journal of Industrial Economics, Wiley Blackwell, vol. 52(2), pages 291-312, June.
    6. Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2000. "A note on the optimality of airline networks," Economics Letters, Elsevier, vol. 69(3), pages 429-434, December.
    7. Daniel, Joseph I. & Harback, Katherine Thomas, 2008. "(When) Do hub airlines internalize their self-imposed congestion delays?," Journal of Urban Economics, Elsevier, vol. 63(2), pages 583-612, March.
    8. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "On the optimal distribution of traffic of network airlines," European Economic Review, Elsevier, vol. 56(6), pages 1164-1179.
    9. Flores-Fillol, Ricardo, 2009. "Airline competition and network structure," Transportation Research Part B: Methodological, Elsevier, vol. 43(10), pages 966-983, December.
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    Cited by:

    1. Fageda, Xavier & Flores-Fillol, Ricardo, 2016. "How do airlines react to airport congestion? The role of networks," Regional Science and Urban Economics, Elsevier, vol. 56(C), pages 73-81.

    More about this item

    Keywords

    Airline networks; Network efficiency; Airport congestion;

    JEL classification:

    • 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
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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