Abstract
Since the deregulation of the airline market in 1978, airline networks have rapidly changed. During this time, regional carriers and low-cost carriers (LCCs) have entered or exited airline markets. According to Bamberger and Carlton [1], in 2003, LCCs other than Southwest entered 38 hub routes and 31 non-hub routes (Southwest entered only two non-hub routes). In the same year, major carriers entered 76 own hub routes, 40 other hub routes, and 216 non-hub routes.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The economic efficiency relative to a point-to-point network comes from the fact that the incumbent enjoys benefits from higher flight frequencies. The resulting welfare under the adopted hub–spoke network could be superior to that in a point-to-point one. For this argument in a monopoly carrier case, see Brueckner [2] and Kawasaki [5], among others.
- 2.
- 3.
See, for example, Kawasaki [5].
- 4.
For example, LCCs tend to use point-to-point networks, do not construct flight schedules that consider connecting passengers’ transit, and thus have a very low percentage of connecting passengers.
- 5.
Because the demand function for market AB is the same as Eq. (10.2), we omit its demand function here. This comment is valid in the following subsections.
- 6.
Recall that the regional carrier enters route AC to avoid the large scheduling effect of the major carrier when the latter enters route AC.
References
Bamberger, G. E., & Carlton, D. W. (2006). Predation and the entry and exit of low-fare carriers. In L. Darin (Ed.), Advances in airline economics: Competition policy and antitrust (Vol. 1, pp. 1–23). Boston: Elsevier.
Brueckner, J. K. (2004). Network structure and airline scheduling. Journal of Industrial Economics, 52, 291–312.
Brueckner, J. K., & Flores-Fillol, R. (2007). Airline schedule competition. Review of Industrial Organization, 30, 161–177.
Flores-Fillol, R. (2010). Congested hub. Transportation Research Part B, 44, 358–370.
Kawasaki, A. (2008). Network effects, heterogeneous time value, and network formation in the airline market. Regional Science and Urban Economics, 38, 388–403.
Kawasaki, A. (2012). Hub location with scheduling effects in a monopoly airline market. Annals of Regional Science, 49, 805–819.
Kawasaki, A., & Lin, M. H. (2013). Airline schedule competition and entry route choices of low-cost carriers. Australian Economic Review, 52, 97–114.
Lin, M. H., & Kawasaki, A. (2012). Where to enter in hub-spoke airline networks. Papers in Regional Science, 91, 419–437.
Oum, T. H., Zhang, A., & Zhang, Y. (1995). Airline network rivalry. Canadian Journal of Economics, 28, 836–857.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer Japan
About this chapter
Cite this chapter
Kawasaki, A. (2016). The Network Analysis of Transportation. In: Naito, T. (eds) Sustainable Growth and Development in a Regional Economy. New Frontiers in Regional Science: Asian Perspectives, vol 13. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55294-9_10
Download citation
DOI: https://doi.org/10.1007/978-4-431-55294-9_10
Publisher Name: Springer, Tokyo
Print ISBN: 978-4-431-55293-2
Online ISBN: 978-4-431-55294-9
eBook Packages: Economics and FinanceEconomics and Finance (R0)