The Role of Demand Uncertainty in Airline Network Structure
In this paper, we provide another reason that may explain the adoption of the hub-and-spoke network structure in the airline industry. We show that when an airline has to decide on its capacity before the demand conditions are perfectly known, a hub-and-spoke network structure by pooling passengers from several markets into the same plane helps the firm to lower its cost of excess capacities in the case of low demand and to reduce its opportunity cost of rationing in the case of high demand.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (418) 656-2096
Fax: (418) 656-7412
Web page: http://www.green.ecn.ulaval.ca/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:lavaen:99-04. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.