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Airline Business Models and Networks: Regulation, Competition and Evolution in Aviation Markets

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  • Gillen David

    (University of British Columbia)

Abstract

This paper examines the evolution of airline business models and network structure decisions in the passenger aviation industry. The paper reviews the growth of hub-and-spoke networks as the dominant business model following deregulation in the latter part of the 20th century, followed by the emergence of low cost carriers as a global phenomenon at the end of the century. The paper highlights the link between airline business strategies and network structures, and examines the resulting competition between divergent network structure business models. In this context, we discuss issues of market structure stability and the role played by competition policy.

Suggested Citation

  • Gillen David, 2006. "Airline Business Models and Networks: Regulation, Competition and Evolution in Aviation Markets," Review of Network Economics, De Gruyter, vol. 5(4), pages 1-20, December.
    • Handle: RePEc:bpj:rneart:v:5:y:2006:i:4:n:1
    DOI: 10.2202/1446-9022.1103
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    Cited by:

    1. Andrea Martín Rodríguez & John F O’Connell, 2018. "Can low-cost long-haul carriers replace Charter airlines in the long-haul market? A European perspective," Tourism Economics, , vol. 24(1), pages 64-78, February.
    2. Joanna Hawlena & Grazyna Kowalska & Rafal Rowinski & Monika Madej, 2021. "Effectiveness of Shaping Multidirectional Functions of an Airport for the Development of the Region," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 873-884.
    3. Paolo Malighetti & Gianmaria Martini & Renato Redondi & Davide Scotti, 2019. "Integrators’ Air Transport Networks in Europe," Networks and Spatial Economics, Springer, vol. 19(2), pages 557-581, June.
    4. Meissner, Robert & Rahn, Antonia & Wicke, Kai, 2021. "Developing prescriptive maintenance strategies in the aviation industry based on a discrete-event simulation framework for post-prognostics decision making," Reliability Engineering and System Safety, Elsevier, vol. 214(C).
    5. Bitzan, John & Peoples, James, 2016. "A comparative analysis of cost change for low-cost, full-service, and other carriers in the US airline industry," Research in Transportation Economics, Elsevier, vol. 56(C), pages 25-41.
    6. Adler, Nicole & Gellman, Aaron, 2012. "Strategies for managing risk in a changing aviation environment," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 24-35.
    7. Merkert, Rico & Hensher, David A., 2011. "The impact of strategic management and fleet planning on airline efficiency - A random effects Tobit model based on DEA efficiency scores," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(7), pages 686-695, August.
    8. Fabio Domanico, 2007. "The European airline industry: law and economics of low cost carriers," European Journal of Law and Economics, Springer, vol. 23(3), pages 199-221, June.
    9. Xavier Fageda & Ricardo Flores-Fillol, 2017. "Airport Congestion and Airline Network Structure," Advances in Airline Economics, in: The Economics of Airport Operations, volume 6, pages 335-359, Emerald Group Publishing Limited.
    10. Heinz, Stephan & O’Connell, John F., 2013. "Air transport in Africa: toward sustainable business models for African airlines," Journal of Transport Geography, Elsevier, vol. 31(C), pages 72-83.
    11. Narcizo, Rodolfo R. & Oliveira, Alessandro V.M. & Dresner, Martin E., 2020. "An empirical model of airline fleet standardization in Brazil: Assessing the dynamic impacts of mergers with an events study," Transport Policy, Elsevier, vol. 97(C), pages 149-160.
    12. Sveinn Vidar Gudmundsson, 2011. "Liberalization of Air Transport," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 14, Edward Elgar Publishing.

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