What role will hubs play in the LCC point-to-point connections era? The Spanish experience

José I. Castillo-Manzano, Lourdes López-Valpuesta and Diego J. Pedregal

Journal of Transport Geography, 2012, vol. 24, issue C, 262-270

Abstract: Airport systems organized spatially as hub-and-spoke systems where traditional airlines (Full-Service Network Carriers – FSNCs) dominate have been impacted by the continuing expansion of Low-Cost Carriers (LCCs) in mainly point-to-point connection systems. Using a methodology based on linear transfer function models, the objective of this paper is to reflect on the future of hubs and on whether their role as large geographical air transport nodes is in doubt. Although Spanish hubs have continued to strengthen their position of dominance, the consequences of this enforced coexistence has manifested itself in a substitution effect, with LCCs replacing FSNCs at the hubs for international, primarily intra-European, flights. The market for national flights, however, has not experienced any significant changes as this new development of LCCs in this market is fundamentally based on new demand from both new passengers and the greater travel frequency of current passengers. There is also room for complementarity between the two models, as national connections with LCC hubs feed long-distance destinations exploited solely by the FSNCs.

Keywords: Hub-and-spoke system; Point-to-point system; Low-cost carriers; Transfer function model; Substitution effects (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jotrge:v:24:y:2012:i:c:p:262-270

DOI: 10.1016/j.jtrangeo.2012.02.009

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