What hurts the dominant airlines at hub airports? |
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| Institution: | 1. Cranfield University, United Kingdom;2. University of Westminster, United Kingdom;1. Department of Economic Policy, Universitat de Barcelona, Avinguda Diagonal 690, 08034 Barcelona, Spain;2. Departament d’Economia and CREIP, Universitat Rovira i Virgili, Avinguda de la Universitat 1, 43204 Reus, Spain;1. Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing, 100101, China;2. University of Chinese Academy of Sciences, 100049, China |
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| 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. |
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| Keywords: | Hub airports Competition Network airlines Low-cost airlines |
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