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Airline's choice of aircraft size - Explanations and implications

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  • Givoni, Moshe
  • Rietveld, Piet

Abstract

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.

Suggested Citation

  • Givoni, Moshe & Rietveld, Piet, 2009. "Airline's choice of aircraft size - Explanations and implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(5), pages 500-510, June.
  • Handle: RePEc:eee:transa:v:43:y:2009:i:5:p:500-510
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    Cited by:

    1. Givoni, Moshe & Rietveld, Piet, 2010. "The environmental implications of airlines' choice of aircraft size," Journal of Air Transport Management, Elsevier, vol. 16(3), pages 159-167.
    2. Fu, Qiang & Wang, Nuo & Shen, MingQi & Song, NanQi & Yan, HuaKun, 2016. "A study of the site selection of a civil airport based on the risk of bird strikes: The case of Dalian, China," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 17-30.
    3. Kölker, Katrin & Bießlich, Peter & Lütjens, Klaus, 2016. "From passenger growth to aircraft movements," Journal of Air Transport Management, Elsevier, vol. 56(PB), pages 99-106.
    4. Fukui, Hideki, 2012. "Do carriers abuse the slot system to inhibit airport capacity usage? Evidence from the US experience," Journal of Air Transport Management, Elsevier, vol. 24(C), pages 1-6.
    5. D’Alfonso, Tiziana & Jiang, Changmin & Bracaglia, Valentina, 2015. "Would competition between air transport and high-speed rail benefit environment and social welfare?," Transportation Research Part B: Methodological, Elsevier, vol. 74(C), pages 118-137.
    6. Zhang, Qiong & Yang, Hangjun & Wang, Qiang & Zhang, Anming, 2014. "Market power and its determinants in the Chinese airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 64(C), pages 1-13.
    7. Fukui, Hideki, 2014. "Effect of slot trading on route-level competition: Evidence from experience in the UK," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 124-141.
    8. Flores-Fillol, Ricardo, 2010. "Congested hubs," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 358-370, March.
    9. Evans, Antony & Schäfer, Andreas, 2011. "The impact of airport capacity constraints on future growth in the US air transportation system," Journal of Air Transport Management, Elsevier, vol. 17(5), pages 288-295.
    10. Aliya Ussinova & Isabelle Laplace & Chantal Latgé-Roucolle, 2017. "An Analysis of the Impact of Larger Aircraft (A-380) on Flight Frequency," Post-Print hal-01599423, HAL.
    11. Wan, Yulai & Ha, Hun-Koo & Yoshida, Yuichiro & Zhang, Anming, 2016. "Airlines’ reaction to high-speed rail entries: Empirical study of the Northeast Asian market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 94(C), pages 532-557.
    12. Berster, Peter & Gelhausen, Marc C. & Wilken, Dieter, 2015. "Is increasing aircraft size common practice of airlines at congested airports?," Journal of Air Transport Management, Elsevier, vol. 46(C), pages 40-48.
    13. Low, Joyce M.W. & Lee, Byung Kwon, 2014. "Effects of internal resources on airline competitiveness," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 23-32.
    14. Dobruszkes, Frédéric & Dehon, Catherine & Givoni, Moshe, 2014. "Does European high-speed rail affect the current level of air services? An EU-wide analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 461-475.
    15. Dobruszkes, Frédéric, 2011. "High-speed rail and air transport competition in Western Europe: A supply-oriented perspective," Transport Policy, Elsevier, vol. 18(6), pages 870-879, November.
    16. Ko, Young Dae, 2016. "An airline's management strategies in a competitive air transport market," Journal of Air Transport Management, Elsevier, vol. 50(C), pages 53-61.
    17. Redondi, Renato & Gudmundsson, Sveinn Vidar, 2016. "Congestion spill effects of Heathrow and Frankfurt airports on connection traffic in European and Gulf hub airports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 287-297.
    18. Martijn B.W. Kobus & Jos N. van Ommeren & Hans R.A. Koster & Piet Rietveld, 2013. "Congestible Goods and Hoarding: A Test based on Students' Use of University Computers," Tinbergen Institute Discussion Papers 13-083/VIII, Tinbergen Institute.
    19. Zou, Bo & Hansen, Mark, 2014. "Flight delay impact on airfare and flight frequency: A comprehensive assessment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 54-74.
    20. Liu, Yi & Hansen, Mark & Zou, Bo, 2013. "Aircraft gauge differences between the US and Europe and their operational implications," Journal of Air Transport Management, Elsevier, vol. 29(C), pages 1-10.
    21. Wilken, Dieter & Berster, Peter & Gelhausen, Marc C., 2016. "Analysis of demand structures on intercontinental routes to and from Europe with a view to identifying potential for new low-cost services," Journal of Air Transport Management, Elsevier, vol. 56(PB), pages 79-90.
    22. repec:eee:transa:v:106:y:2017:i:c:p:116-129 is not listed on IDEAS
    23. Aliya Ussinova & Isabelle Laplace & Chantal Latgé-Roucolle, 2018. "An analysis of the impact of larger aircraft (A-380) on flight frequency," Post-Print hal-01682632, HAL.
    24. Vespermann, Jan & Wald, Andreas, 2011. "Much Ado about Nothing? – An analysis of economic impacts and ecologic effects of the EU-emission trading scheme in the aviation industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1066-1076.

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