The construction of a low cost airline network

Kai Hüschelrath, Kathrin Müller and Volodymyr Bilotkach
Authors registered in the RePEc Author Service: Kai Hueschelrath

No 11-052, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The paper investigates the construction of a low cost airline network by analyzing JetBlue Airways' entry decisions into nonstop domestic U.S. airport-pair markets between 2000 and 2009. Adopting duration models with time-varying covariates, we find that JetBlue consistently avoided concentrated airports and targeted concentrated routes; network economies also affected entry positively. For non-stop entry into a route that has not been served on a non-stop basis before, our analysis reveals that the carrier focused on thicker routes and secondary airports, thereby avoiding direct confrontation with network carriers. Non-stop entry into existing non-stop markets, however, shows that JetBlue concentrated on longer-haul markets and avoided routes already operated by either other low cost carriers or network carriers under bankruptcy protection.

Keywords: Airline industry; network; entry; low cost carrier (search for similar items in EconPapers)
JEL-codes: L11 L23 L93 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-com, nep-ind and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:11052

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