Airlines-within-airlines strategies and existence of low-cost carriers |
| |
Authors: | Ming Hsin Lin |
| |
Institution: | Faculty of Economics, Osaka University of Economics, 2-2-8 Osumi, Higashiyodogawa-ku, Osaka 533-8533, Japan |
| |
Abstract: | This paper investigates hub carriers’ airlines-within-airlines (AinA) strategies, intended to establish low-cost divisions offering nonstop flights on rim routes. An initial hub-spoke network is optimal if passenger differentiation between one-stop and nonstop services and via-hub time cost are small. If differentiation is substantial, a mixed one-stop and nonstop (point-to-point) network under AinA is optimal when via-hub time cost is small (large). Low-cost rivals on rim routes weaken AinA adoption and enhance welfare from a monopoly mixed network. In a perfect-substitute case, hub carriers may have excessive incentive to adopt AinA from a welfare viewpoint, especially, when low-cost rivals exist. |
| |
Keywords: | Airline network Airlines-within-airlines Low-cost carriers Schedule competition Product differentiation |
本文献已被 ScienceDirect 等数据库收录! |
|