Airline competition and network structure
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.
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Volume (Year): 43 (2009)
Issue (Month): 10 (December)
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References listed on IDEAS
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- Flores-Fillol, Ricardo, 2009. "Congested hubs," Working Papers 2072/15844, Universitat Rovira i Virgili, Department of Economics.
- 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.
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"Network Structure and Airline Scheduling,"
02-0112, University of Illinois at Urbana-Champaign, College of Business.
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