The impact of hub hierarchy and market competition on airfare pricing in US hub-to-hub markets

Journal of Air Transport Management

Volumn 32, Issue , 2013, Pages 65-70

  Zhang, Shengrun ^a   Derudder, Ben ^a   Witlox, Frank ^a  

^a GHENT UNIVERSITY   (Belgium)

Author keywords

Airfare pricing; Competition; Full service carriers; Hub hierarchy

Indexed keywords

AIR TRANSPORTATION; COMPETITION (ECONOMICS); ECONOMETRICS; HUB AND SPOKE NETWORK; MARKET SYSTEM; PRICING POLICY;

UNITED STATES;

EID: 84880640293     PISSN: 09696997     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jairtraman.2013.06.016     Document Type: Article

References (43)

1. Boguslaski C., Ito H., Lee D. Entry patterns in the Southwest Airlines route system. Review of Industrial Organization 2004, 25:317-350.
2. Borenstein S. Hubs and high fares: dominance and market power in the U.S. airline industry. The RAND Journal of Economics 1989, 20:344-365.
3. Borenstein S. U.S. Domestic Airline Pricing, 1995-2004 2005, US Berkeley competition policy working paper. http://ssrn.com/abstract%3d671222.
4. Bresnahan T.F., Reiss P.C. Entry and competition in concentrated markets. Journal of Political Economy 1991, 977-1009.
5. Brueckner J.K., Dyer N.J., Spiller P.T. Fare determination in airline hub-and-spoke networks. The RAND Journal of Economics 1992, 23:309-333.
6. Brueckner J.K., Lee D., Singer E.S. Airline competition and domestic US airfares: a comprehensive reappraisal. Economics of Transportation 2013, 2:1-17.
7. Button K. Debunking some common myths about airport hubs. Journal of Air Transport Management 2002, 8:177-188.
8. Chi J., Koo W.W. Carriers' pricing behaviors in the United States airline industry. Transportation Research Part E: Logistics and Transportation Review 2009, 45:710-724.
9. Ciliberto F., Williams J.W. Limited access to airport facilities and market power in the airline industry. Journal of Law and Economics 2010, 53:467-495.
10. Daraban I.B. Low Cost Carrier Entry, Incumbent Responses and Spatial Competition in the US Airline Industry 2007, 129. College of Social Sciences, Florida State University.
11. de Neufville R. Management of multi-airport systems: a development strategy. Journal of Air Transport Management 1995, 2:99-110.
12. Derudder B., Devriendt L., Witlox F. Aspatial analysis of multiple airport cities. Journal of Transport Geography 2010, 18:345-353.
13. Devriendt L., Burghouwt G., Derudder B., de Wit J., Witlox F. Calculating load factors for the transatlantic airline market using supply and demand data - a note on the identification of gaps in the available airline statistics. Journal of Air Transport Management 2009, 15:337-343.
14. Dobruszkes F., Van Hamme G. The impact of the current economic crisis on the geography of air traffic volumes: an empirical analysis. Journal of Transport Geography 2011, 19:1387-1398.
15. Dresner M., Lin J.S., Windle R. The impact of low-cost carriers on airport and route competition. Journal of Transport Economics and Policy 1996, 30:309-328.
16. Federal Aviation Administration FAA Aerospace Forecast: Fiscal Years 2012-2032 2012.
17. Gillen D., Morrison W.G. Regulation, competition and network evolution in aviation. Journal of Air Transport Management 2005, 11:161-174.
18. Goolsbee A., Syverson C. How do incumbents respond to the threat of entry? Evidence from the major airlines. The Quarterly Journal of Economics 2008, 123:1611-1633.
19. Graham B., Vowles T.M. Carriers within carriers: a strategic response to low-cost airline competition. Transport Reviews 2006, 26:105-126.
20. Grubesic T. Global distribution systems and the U.S. commercial air industry http://www.tonygrubesic.net/airport.pdf.
21. Hausman J.A. Specification tests in econometrics. Econometrica: Journal of the Econometric Society 1978, 1251-1271.
22. Hazledine T. Legacy carriers fight back: pricing and product differentiation in modern airline marketing. Journal of Air Transport Management 2011, 17:130-135.
23. Holloway S. Straight and Level: Practical Airline Economics 2008, Ashgate Pub.
24. Ito H., Lee D. Low Cost Carrier Growth in the U.S. Airline Industry: Past, Present, and Future 2003, Working papers 2003-22, Brown University.
25. Ivy R.L. Variations in hub service in the US domestic air transportation network. Journal of Transport Geography 1993, 1:211-218.
26. Johnson T., Savage I. Departure delays, the pricing of congestion, and expansion proposals at Chicago O'Hare Airport. Journal of Air Transport Management 2006, 12:182-190.
27. Lee D., Luengo-Prado M.J. The impact of passenger mix on reported "hub premiums" in the U.S. airline industry. Southern Economic Journal 2005, 72:372-394.
28. Müller K., Hüschelrath K., Bilotkach V. The construction of a low-cost airline network - facing competition and exploring new markets. Managerial and Decision Economics 2012, 33:485-499.
29. Morrison S.A. Actual, adjacent, and potential competition estimating the full effect of Southwest Airlines. Journal of Transport Economics and Policy (JTEP) 2001, 35:239-256.
30. Nero G. Anote on the competitive advantage of large hub-and-spoke networks. Transportation Research Part E: Logistics and Transportation Review 1999, 35:225-239.
31. O'Kelly M.E. Ageographer's analysis of hub-and-spoke networks. Journal of Transport Geography 1998, 6:171-186.
32. Oum T.H., Tretheway M.W. Airline hub and spoke systems. Journal of the Transportation Research Forum 1990, 30:380-393.
33. Reynolds-Feighan A. Traffic distribution in low-cost and full-service carrier networks in the US air transportation market. Journal of Air Transport Management 2001, 7:265-275.
34. Shaw S.-L. Hub structures of major US passenger airlines. Journal of Transport Geography 1993, 1:47-58.
35. Taneja N.K. Simpli-Flying: Optimizing the Airline Business Model 2004, Ashgate Publishing Limited.
36. Tierney S., Kuby M. Airline and airport choice by passengers in multi-airport regions: the effect of Southwest Airlines. The Professional Geographer 2008, 60:15-32.
37. US Department of Transportation Dominated Hub Fares. Domestic Aviation Competition Series 2001.
38. Vowles T.M. The "southwest effect" in multi-airport regions. Journal of Air Transport Management 2001, 7:251-258.
39. Vowles T.M. Airfare pricing determinants in hub-to-hub markets. Journal of Transport Geography 2006, 14:15-22.
40. White H. Aheteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica: Journal of the Econometric Society 1980, 817-838.
41. Williams J., Snider C. Barriers to Entry in the Airline Industry: An Analysis of the Wendell H. Ford Aviation Investment and Reform Act. Ford Aviation Investment and Reform Act March 3, 2011.
42. Windle R., Dresner M. The short and long run effects of entry on U.S. domestic air routes. Transportation Journal 1995, 35:14-25.
43. Windle R., Dresner M. Competitive responses to low cost carrier entry. Transportation Research Part E: Logistics and Transportation Review 1999, 35:59-75.