 Why do airlines prefer multi-hub networks?Chunan Wang and Xiaoyu Wang Transportation Research Part E: Logistics and Transportation Review, 2019, vol. 124, issue C, 56-74 Abstract: This paper investigates a monopoly airline’s incentive to adopt a multi-hub (2-hub) network from the perspective of horizontal product differentiation. We find that: when both extra travel time disutility of one-stop services and marginal congestion delay cost are low, the hub-and-spoke network is optimal for airline, while when disutility is very high, the point-to-point network is optimal. For the rest of parameter space, because of the exploitation of horizontal product differentiation in more markets, the 2-hub network is optimal within its bounds of disutility, while the point-to-point network is left to be optimal between the hub-and-spoke and 2-hub networks. Keywords: Airline network; Multi-hub network; Horizontal product differentiation; Welfare analysis (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:124:y:2019:i:c:p:56-74 Ordering information: This journal article can be ordered from DOI: 10.1016/j.tre.2019.02.009 Access Statistics for this article Transportation Research Part E: Logistics and Transportation Review is currently edited by W. Talley More articles in Transportation Research Part E: Logistics and Transportation Review from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.