IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v43y2009i10p966-983.html
   My bibliography  Save this article

Airline competition and network structure

Author

Listed:
  • Flores-Fillol, Ricardo

Abstract

This paper studies airline networks and their welfare implications in an unregulated environment. Competing airlines may adopt either fully-connected (FC) or hub-and-spoke (HS) network structures; and passengers exhibiting low brand loyalty to their preferred carrier choose an outside option to travel so that markets are partially served by airlines. In this context, carriers adopt hubbing strategies when costs are sufficiently low, and asymmetric equilibria where one carrier chooses a FC strategy and the other chooses a HS strategy may arise. Quite interestingly, flight frequency can become excessive under HS network configurations.

Suggested Citation

  • Flores-Fillol, Ricardo, 2009. "Airline competition and network structure," Transportation Research Part B: Methodological, Elsevier, vol. 43(10), pages 966-983, December.
  • Handle: RePEc:eee:transb:v:43:y:2009:i:10:p:966-983
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191-2615(09)00046-0
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kawasaki, Akio, 2008. "Network effects, heterogeneous time value and network formation in the airline market," Regional Science and Urban Economics, Elsevier, vol. 38(4), pages 388-403, July.
    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. Ken Hendricks & Michele Piccione & Guofu Tan, 1999. "Equilibria in Networks," Econometrica, Econometric Society, vol. 67(6), pages 1407-1434, November.
    5. Brueckner, Jan K & Whalen, W Tom, 2000. "The Price Effects of International Airline Alliances," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 503-545, October.
    6. Brueckner, Jan K. & Spiller, Pablo T., 1991. "Competition and mergers in airline networks," International Journal of Industrial Organization, Elsevier, vol. 9(3), pages 323-342, September.
    7. Jan K. Brueckner, 2004. "Network Structure and Airline Scheduling," Journal of Industrial Economics, Wiley Blackwell, vol. 52(2), pages 291-312, June.
    8. Barla, Philippe & Constantatos, Christos, 2005. "Strategic interactions and airline network morphology under demand uncertainty," European Economic Review, Elsevier, vol. 49(3), pages 703-716, April.
    9. Tae Hoon Oum & Anming Zhang & Yimin Zhang, 1995. "Airline Network Rivalry," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 836-857, November.
    10. Flores-Fillol, Ricardo, 2009. "Congested hubs," Working Papers 2072/15844, Universitat Rovira i Virgili, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Silva, Hugo E. & Verhoef, Erik T. & van den Berg, Vincent A.C., 2014. "Airline route structure competition and network policy," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 320-343.
    2. Fageda, Xavier, 1975- & Flores-Fillol, Ricardo, 2010. "Technology, business models and network structure in the airline industry," Working Papers 2072/151552, Universitat Rovira i Virgili, Department of Economics.
    3. Oum, Tae H. & Yan, Jia & Yu, Chunyan, 2008. "Ownership forms matter for airport efficiency: A stochastic frontier investigation of worldwide airports," Journal of Urban Economics, Elsevier, vol. 64(2), pages 422-435, September.
    4. Bilotkach, Volodymyr & Fageda, Xavier & Flores-Fillol, Ricardo, 2010. "Scheduled service versus personal transportation: The role of distance," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 60-72, January.
    5. Fageda, Xavier & Flores-Fillol, Ricardo, 2015. "A note on optimal airline networks under airport congestion," Economics Letters, Elsevier, vol. 128(C), pages 90-94.
    6. Morimoto, Yu & Takeda, Kohei, 2015. "Policy of airline competition ~monopoly or duopoly~," MPRA Paper 63258, University Library of Munich, Germany.
    7. Teraji, Yusuke & Morimoto, Yu, 2014. "Price competition of airports and its effect on the airline network," Economics of Transportation, Elsevier, vol. 3(1), pages 45-57.
    8. Lin, Ming Hsin, 2012. "Airlines-within-airlines strategies and existence of low-cost carriers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(3), pages 637-651.
    9. 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.
    10. Flores-Fillol, Ricardo, 2010. "Congested hubs," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 358-370, March.
    11. Álvarez-SanJaime, Óscar & Cantos-Sánchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, José J., 2013. "Competition and horizontal integration in maritime freight transport," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 51(C), pages 67-81.
    12. Bilotkach, Volodymyr & Fageda, Xavier & Flores-Fillol, Ricardo, 2013. "Airline consolidation and the distribution of traffic between primary and secondary hubs," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 951-963.
    13. Takebayashi, Mikio, 2013. "Network competition and the difference in operating cost: Model analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 57(C), pages 85-94.
    14. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "Air services on thin routes: Regional versus low-cost airlines," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 702-714.
    15. D’Alfonso, Tiziana & Jiang, Changmin & Bracaglia, Valentina, 2016. "Air transport and high-speed rail competition: Environmental implications and mitigation strategies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 261-276.
    16. M. Nenem & E. Ozkan-Gunay, 2012. "Determining Hub Efficiency in Europe, the Middle East, and North Africa: The Impact of Geographical Positioning," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 2(2), pages 37-53, December.
    17. Kawamori, Tomohiko & Lin, Ming Hsin, 2013. "Airline mergers with low cost carriers," Economics of Transportation, Elsevier, vol. 2(2), pages 63-71.
    18. repec:eee:jaitra:v:66:y:2018:i:c:p:42-52 is not listed on IDEAS
    19. Akio Kawasaki & Ming Hsin Lin, 2013. "Airline Schedule Competition and the Entry Route Choices of Low-Cost Carriers," Australian Economic Papers, Wiley Blackwell, vol. 52(2), pages 97-114, June.
    20. 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.
    21. Fageda, Xavier, 1975- & Flores-Fillol, Ricardo, 2012. "Airport Congestion and Airline Network Structure," Working Papers 2072/211753, Universitat Rovira i Virgili, Department of Economics.
    22. Álvarez-SanJaime, Óscar & Cantos-Sanchez, Pedro & Moner-Colonques, Rafael & Sempere-Monerris, Jose J., 2016. "Rail access charges and internal competition in high speed trains," Transport Policy, Elsevier, vol. 49(C), pages 184-195.
    23. Akio Kawasaki, 2012. "Hub location with scheduling effects in a monopoly airline market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 805-819, December.
    24. Flores-Fillol, Ricardo, 2009. "Congested hubs," Working Papers 2072/15844, Universitat Rovira i Virgili, Department of Economics.
    25. Adrian Nerja, 2017. "Effects of concession revenue sharing contracts and airline alliances in airport competition," Discussion Papers in Economic Behaviour 0317, University of Valencia, ERI-CES.

    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:transb:v:43:y:2009:i:10:p:966-983. 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). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.