Airline's choice of aircraft size - Explanations and implications
When facing a growth in demand, airlines tend to respond more by means of increasing frequencies than by increasing aircraft size. At many of the world's largest airports there are fewer than 100 passengers per air transport movement, although congestion and delays are growing. Furthermore, demand for air transport is predicted to continue growing but aircraft size is not. This paper aims to investigate and explain this phenomenon, the choice of relatively small aircraft. It seems that this choice is associated mainly with the benefits of high frequency service, the competitive environment in which airlines operate and the way airport capacity is allocated and priced. Regression analysis of over 500 routes in the US, Europe and Asia provides empirical evidence that the choice of aircraft size is mainly influenced by route characteristics (e.g. distance, level of demand and level of competition) and almost not at all by airport characteristics (e.g. number of runways and whether the airport is a hub or slot coordinated). We discuss the implications of this choice of aircraft size and suggest that some market imperfections exist in the airline industry leading airlines to offer excessive frequency on some routes and too low frequency on others.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 43 (2009)
Issue (Month): 5 (June)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
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.:
- Wenbin Wei & Mark Hansen, 2003. "Cost Economics of Aircraft Size," Journal of Transport Economics and Policy, University of Bath, vol. 37(2), pages 279-296, May.
- Savage, Ian & Scott, Burgess, 2004. "Deploying regional jets to add new spokes to a hub," Journal of Air Transport Management, Elsevier, vol. 10(2), pages 147-150.
- Borenstein, Severin & Netz, Janet, 1999. "Why do all the flights leave at 8 am?: Competition and departure-time differentiation in airline markets," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 611-640, July.
- Dresner, Martin & Windle, Robert & Zhou, Ming, 2002. "Regional jet services: supply and demand," Journal of Air Transport Management, Elsevier, vol. 8(5), pages 267-273.
- Sarkis, Joseph & Talluri, Srinivas, 2004. "Performance based clustering for benchmarking of US airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(5), pages 329-346, June.
- Inglada, Vicente & Rey, Belen & Rodriguez-Alvarez, Ana & Coto-Millan, Pablo, 2006. "Liberalisation and efficiency in international air transport," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(2), pages 95-105, February.
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
- Kenneth Button & Jonathan Drexler, 2005. "Recovering Costs by Increasing Market Share: An Empirical Critique of the S-Curve," Journal of Transport Economics and Policy, University of Bath, vol. 39(3), pages 391-410, September.
- Brueckner, Jan K., 2002.
"Network Structure and Airline Scheduling,"
02-0112, University of Illinois at Urbana-Champaign, College of Business.
- Pitfield, David & Caves, Robert E., 2000. "Airline Strategies For Aircraft Size And Airline Frequency With Changing Demand And Competition: A Two-Stage Least Squares Analysisfor Long Haul Traffic On The North Atlantic," ERSA conference papers ersa00p500, European Regional Science Association.
- Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.
- Reynolds-Feighan, Aisling & Button, Kenneth J., 1999.
"An Assessment of the Capacity and Congestion levels at European Airports,"
ERSA conference papers
ersa99pa241, European Regional Science Association.
- Reynolds-Feighan, Aisling J. & Button, Kenneth J., 1999. "An assessment of the capacity and congestion levels at European airports," Journal of Air Transport Management, Elsevier, vol. 5(3), pages 113-134.
- Douglas, George W & Miller, James C, III, 1974. "Quality Competition, Industry Equilibrium, and Efficiency in the Price-Constrained Airline Market," American Economic Review, American Economic Association, vol. 64(4), pages 657-669, September.
- Martin Dresner & Robert Windle & Yuliang Yao, 2002. "Airport Barriers to Entry in the US," Journal of Transport Economics and Policy, University of Bath, vol. 36(3), pages 389-405, September.
- Swan, William M. & Adler, Nicole, 2006. "Aircraft trip cost parameters: A function of stage length and seat capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(2), pages 105-115, March.
- Wei, Wenbin, 2006. "Impact of landing fees on airlinesâ€™ choice of aircraft size and service frequency in duopoly markets," Journal of Air Transport Management, Elsevier, vol. 12(6), pages 288-292.
- Madas, Michael A. & Zografos, Konstantinos G., 2008. "Airport capacity vs. demand: Mismatch or mismanagement?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(1), pages 203-226, January.
- Jan K. Brueckner & Yimin Zhang, 2001. "A Model of Scheduling in Airline Networks: How a Hub-and-Spoke System Affects Flight Frequency, Fares and Welfare," Journal of Transport Economics and Policy, University of Bath, vol. 35(2), pages 195-222, May.
- Wei, Wenbin & Hansen, Mark, 2005. "Impact of aircraft size and seat availability on airlines' demand and market share in duopoly markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(4), pages 315-327, July.
- Fernandes, Elton & Pacheco, R. R., 2002. "Efficient use of airport capacity," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(3), pages 225-238, March.
- Wei, Wenbin & Hansen, Mark, 2006. "An aggregate demand model for air passenger traffic in the hub-and-spoke network," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(10), pages 841-851, December.
- Greer, Mark R., 2008. "Nothing focuses the mind on productivity quite like the fear of liquidation: Changes in airline productivity in the United States, 2000-2004," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(2), pages 414-426, February.
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:43:y:2009:i:5:p:500-510. See general 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: (Dana Niculescu)
If references are entirely missing, you can add them using this form.