Description

The network of an airline determines virtually every aspect of airline economics, for example the set of products offered, cost and service levels, the equipment needed in the air and on the ground, the attractiveness of frequent flyer programs, the nature of competition with rival airlines, the extent to which market power can be exercised, and the attractiveness as an alliance partner. As a consequence, most recent policy issues in air transport are associated with the hub-and-spoke systems of major air carriers. This book analyzes the airlines' choice of network structure theoretically and empirically. Specifically, it explores the importance of passenger preferences for flight frequency and travel time, and the impact of geography, hub congestion, and the regulatory regime.