Congested hubs

Hub congestion is a major concern and a relevant policy issue because it causes important problems at airports such as flight delays, cancellations and missed connections that end up affecting both air travelers and airlines. We address the interplay between flight frequency and aircraft size in a congestion-pricing model, finding that airlines schedule too many flights using overly small aircraft, which constitutes a major contributor to congestion. Then we work out the needed congestion tolls, which account for the congestion imposed on other carriers and the congestion imposed on all passengers. Finally, we analyze the effects on congestion of network size, airport capacity, alliances and competition in layover time.