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"Network Structure and Airline Scheduling"

Jan K. Brueckner

 

First Author :

Jan K. Brueckner
Economics
University of Illinois at Urbana-Champaign
Department of Economics and Institute of Government and Public Affairs
1206 S. Sixth Street, M/C 706
Champaign, IL 61820
USA

jbrueckn@uiuc.edu

http://www.business.uiuc.edu/faculty/brueckner.html

 
 
Abstract :
 
This paper provides a simple analysis of the effects of network structure on the scheduling, traffic, and aircraft-size choices of a monopoly airline. The analysis shows that switching to an HS network leads to increases in both °ight frequency and aircraft size, while stimulating local traffic in and out of the hub. In addition, HS networks are shown to be preferred by the airline when travel demand is low, when flights are expensive to operate, and when passengers place a high value on flight frequency but are not excessively inconvenienced by the extra travel time required for a connecting trip. The welfare analysis shows that the flight frequency, traffic volumes, and aircraft size chosen by the monopolist are all inefficiently low under both network types. Moreover, in the most plausible case, the monopolist's network choice exhibits an inefficient bias toward the HS network, apparently reflecting an excessive desire to economize on the number of flights.
 
 
Manuscript Received : 2002
Manuscript Published : 2002
 
 
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