Highlights Airlines at hubs reduce frequencies when route share of LCC increases. Airlines at hubs reduce frequencies when airport share of LCC increases. Airlines at their hubs are not affected by competition from secondary airports. Mergers imply a route structure re-organization in favor of the larger airline.
Abstract This paper estimates a frequency equation to explain the determinants of network airline service levels at their hub airports. Drawing on European data for 2002–2013, we find that network airlines reduce frequencies when the share of low-cost airlines increases both on the route and at the hub airport. On the contrary, frequency choices of network airlines are not affected by competition from low-cost airlines operating in nearby secondary airports. We also find some evidence that mergers in Europe may result in a re-organization of the route structure in favor of the hubs of the larger airline.
What hurts the dominant airlines at hub airports?
2014-07-05
13 pages
Article (Journal)
Electronic Resource
English
What hurts the dominant airlines at hub airports?
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