IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v128y2025ics0969699725001115.html
   My bibliography  Save this article

The impact of network optimization on airline financial performance: Evidence from China domestic routes

Author

Listed:
  • Zhou, Yueer
  • Ma, Wenliang
  • Xu, Yuchao
  • Wu, Xiangru
  • Li, Linbo

Abstract

Network structure is a crucial strategic factor influencing airline revenue. A hub-and-spoke network can reduce airline costs due to economies of scale; however, it may lead to passenger leakage when alternative transportation modes are available. On the other hand, a point-to-point network offers greater convenience for passengers but is generally less profitable for airlines. This paper develops an optimization algorithm (Self-Regulated Ant Colony Optimization) to design a hybrid airline network that can simultaneously optimize route design and frequency setting. Then, applying a case study of the airline network of China Southern Airlines, we find that the designed hybrid network generates better financial performance, manifesting as higher revenue and larger load factors compared to the original network. At the same time, the airlines' operating time is significantly reduced. The results also indicate that, following network optimization, airlines tend to use smaller aircraft. Finally, we identify the characteristics of the suspended and newly generated routes after optimization. This paper has important policy implications for airline operations and network design.

Suggested Citation

  • Zhou, Yueer & Ma, Wenliang & Xu, Yuchao & Wu, Xiangru & Li, Linbo, 2025. "The impact of network optimization on airline financial performance: Evidence from China domestic routes," Journal of Air Transport Management, Elsevier, vol. 128(C).
  • Handle: RePEc:eee:jaitra:v:128:y:2025:i:c:s0969699725001115
    DOI: 10.1016/j.jairtraman.2025.102848
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699725001115
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jairtraman.2025.102848?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:128:y:2025:i:c:s0969699725001115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.