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Revenue and operational impacts of depeaking at U.S. hub airports

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  • Katz, Donald S.
  • Garrow, Laurie A.

Abstract

Historically, peaked schedules have been used with hub-and-spoke networks to maximize passenger connection opportunities. Although peaked schedules can generate more attractive connecting itineraries and revenue for an airline, they are costly to operate because additional manpower and equipment resources are needed to serve the peak periods. Several airlines experimented with depeaking their hubs as a way to reduce costs and improve operations in the 2000s. Prior studies have quantified operational improvements and cost savings associated with depeaking; however, none have quantified revenue impacts. We use difference-in-differences methods to quantify revenue and operational impacts associated with depeaking for five U.S. hubs. Results show that depeaking tends to improve operations, but may negatively impact revenue per available seat mile (RASM). In some cases, revenue losses exceed reported cost savings.

Suggested Citation

  • Katz, Donald S. & Garrow, Laurie A., 2014. "Revenue and operational impacts of depeaking at U.S. hub airports," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 57-64.
    • Handle: RePEc:eee:jaitra:v:34:y:2014:i:c:p:57-64
    DOI: 10.1016/j.jairtraman.2013.07.011
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    Cited by:

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    2. Nicole Kalemba & Fernando Campa-Planas, 2018. "The quality effect on the profitability of US airline companies," Tourism Economics, , vol. 24(3), pages 251-269, May.

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