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How Do Airlines React to Airport Congestion? The Role of Networks

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  • Fageda, Xavier, 1975-
  • Flores-Fillol, Ricardo

Abstract

In this paper, we investigate the relationship between airline network structure and airport congestion. More specifically, we study the ways in which airlines adjust frequencies to delays (as a measure of airport congestion) depending on the network type they operate. Our results suggest that network structure has a fundamental impact. Thus, while airlines operating fully-connected configurations reduce frequencies in response to more frequent delays, airlines operating hub-and-spoke structures increase frequencies. Therefore, network airlines have incentives to keep frequencies high even if this is at the expense of a greater congestion at their hub airports. This result sheds light on previously unclear results in the literature. Keywords: airline networks; airport congestion; delays. JEL Classification Numbers: L13; L93; R41.

Suggested Citation

  • Fageda, Xavier, 1975- & Flores-Fillol, Ricardo, 2015. "How Do Airlines React to Airport Congestion? The Role of Networks," Working Papers 2072/260960, Universitat Rovira i Virgili, Department of Economics.
  • Handle: RePEc:urv:wpaper:2072/260960
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    References listed on IDEAS

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    1. Brueckner, Jan K. & Van Dender, Kurt, 2008. "Atomistic congestion tolls at concentrated airports? Seeking a unified view in the internalization debate," Journal of Urban Economics, Elsevier, vol. 64(2), pages 288-295, September.
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    7. Baumgarten, Patrick & Malina, Robert & Lange, Anne, 2014. "The impact of hubbing concentration on flight delays within airline networks: An empirical analysis of the US domestic market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 66(C), pages 103-114.
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    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.
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    15. 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.
    16. Fageda, Xavier & Flores-Fillol, Ricardo, 2015. "A note on optimal airline networks under airport congestion," Economics Letters, Elsevier, vol. 128(C), pages 90-94.
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    1. repec:kap:regeco:v:52:y:2017:i:1:d:10.1007_s11149-017-9332-z is not listed on IDEAS

    More about this item

    Keywords

    Aeroports; Aviació comercial; Oligopolis; Transport; 338 - Situació econòmica. Política econòmica. Gestió; control i planificació de l'economia. Producció. Serveis. Turisme. Preus;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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