Multi-Hub Network Configurations - A Temporary or Permanent Outcome of Airline Consolidation?

Düdden Jan-Christoph ()
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Düdden Jan-Christoph: WHU Graduate School of Management

Review of Network Economics, 2006, vol. 5, issue 4, 14

Abstract: Ongoing consolidation in the European airline industry poses a threat to second-tier hub cities in terms of losing hub status and long haul routes. As airlines merged in the USA, it was often more efficient to close a duplicating hub and concentrate resources on the stronger one. This paper relies on a formal model to explore discrete scenarios for non-hub intercontinental connections. The results of the analysis show that a hub and spoke airline in a competitive environment can rationally preserve or initiate non-hub long haul routes, even going to the length of maintaining or building up an ancillary hub.

Date: 2006
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DOI: 10.2202/1446-9022.1106

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