1-Hub, 2-hub or fully connected network? A theoretical analysis of the optimality of airline network structure

Wang, Xiyan(Jamie)

Economics of Transportation, 2016, vol. 5, issue C, 12-23

Abstract: Multi-hub network structures are an increasingly important phenomenon in today’s airline networks. With current theoretical arguments for the single-hub solution leaving little room for the kind of multi-hub networks that exist nowadays, this paper sets up a formal model to explore the optimality of multi-hub networks, with or without competition. It is shown that a single-hub or a fully connected network may not be the optimal network configuration, while a 2-hub configuration may be favored under certain circumstances. In addition, the paper shows that competition can also affect an airline’s optimal choice of network: a 2-hub network can be preferable if a competitor enters the market.

Keywords: Optimal networks; Hub-and-spoke systems (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecotra:v:5:y:2016:i:c:p:12-23

DOI: 10.1016/j.ecotra.2015.09.003

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