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Title:
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Airline Consolidation and the Distribution of Traffic between Primary and Secondary Hubs
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Author:
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Bilotkach, Volodymyr; Fageda, Xavier, 1975-; Flores-Fillol, Ricardo
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Other authors:
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Universitat Rovira i Virgili. Departament d'Economia; Universitat Rovira i Virgili. Centre de Recerca en Economia Industrial i Economia Pública |
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Abstract:
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Several airline consolidation events have recently been completed both in Europe
and in the United States. The model we develop considers two airlines operating
hub-and-spoke networks, using different hubs to connect the same spoke airports.
We assume the airlines to be vertically differentiated, which allows us to distinguish
between primary and secondary hubs. We conclude that this differentiation in air
services becomes more accentuated after consolidation, with an increased number
of flights being channeled through the primary hub. However, congestion can act
as a brake on the concentration of flight frequency in the primary hub following
consolidation. Our empirical application involves an analysis of Delta s network
following its merger with Northwest. We find evidence consistent with an increase in
the importance of Delta s primary hubs at the expense of its secondary airports. We
also find some evidence suggesting that the carrier chooses to divert traffic away from
those hub airports that were more prone to delays prior to the merger, in particular
New York s JFK airport.
Keywords: primary hub; secondary hub; airport congestion; airline consolidation;
airline networks
JEL Classi fication Numbers: D43; L13; L40; L93; R4 |
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Publication date:
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2012 |
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Subject (UDC):
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338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus |
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Subject(s):
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Aeroports -- Direcció i administració
Aviació comercial
Línies aèries
Oligopolis
Trusts industrials |
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Rights:
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L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons: http://creativecommons.org/licenses/by-nc-nd/3.0/es/ |
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Pages:
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37 p. |
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Document type:
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Working Paper |
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Published by:
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Universitat Rovira i Virgili. Departament d'Economia
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Collection:
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Documents de treball del Departament d'Economia;2012-32
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