Airline competition and network structure

Ricardo Flores-Fillol

Transportation Research Part B: Methodological, 2009, vol. 43, issue 10, 966-983

Abstract: This paper studies airline networks and their welfare implications in an unregulated environment. Competing airlines may adopt either fully-connected (FC) or hub-and-spoke (HS) network structures; and passengers exhibiting low brand loyalty to their preferred carrier choose an outside option to travel so that markets are partially served by airlines. In this context, carriers adopt hubbing strategies when costs are sufficiently low, and asymmetric equilibria where one carrier chooses a FC strategy and the other chooses a HS strategy may arise. Quite interestingly, flight frequency can become excessive under HS network configurations.

Keywords: Fully-connected; networks; Hub-and-spoke; networks; Brand; loyalty; Fully-served; markets; Partially-served; markets (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (56)

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