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

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  • Zhang, Shengrun
  • Derudder, Ben
  • Witlox, Frank

Abstract

This paper explores factors influencing the pricing behaviour of full-service carriers in hub-to-hub markets, which to date have rarely been the exclusive focus of research. Drawing on a 2009 dataset containing route and airfare information, we estimate a pricing model for the hub-to-hub markets in the United States. Our econometric analysis suggests that an airport's position in carriers' hub hierarchies, competition from low-cost carriers, and other market structure variables influence average airfares.

Suggested Citation

  • Zhang, Shengrun & Derudder, Ben & Witlox, Frank, 2013. "The impact of hub hierarchy and market competition on airfare pricing in US hub-to-hub markets," Journal of Air Transport Management, Elsevier, vol. 32(C), pages 65-70.
    • Handle: RePEc:eee:jaitra:v:32:y:2013:i:c:p:65-70
    DOI: 10.1016/j.jairtraman.2013.06.016
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    Cited by:

    1. Gao, Yi & Sobieralski, Joseph B., 2021. "Spatial and operational factors behind passenger yield of U.S. nonhub primary airports," Journal of Air Transport Management, Elsevier, vol. 90(C).
    2. Zhang, Shengrun & Fuellhart, Kurt & Yang, Wendong & Tang, Xiaowei & Witlox, Frank, 2019. "Factors shaping non-stop airline services in the transatlantic air transport market: 2015–2017," Journal of Transport Geography, Elsevier, vol. 80(C).
    3. Fangwu Wei & Tony H. Grubesic, 2015. "A Typology of Rural Airports in the United States: Evaluating Network Accessibility," The Review of Regional Studies, Southern Regional Science Association, vol. 45(1), pages 57-85, Spring.
    4. Zhang, Shengrun & Derudder, Ben & Fuellhart, Kurt & Witlox, Frank, 2018. "Carriers’ entry patterns under EU-US open skies agreement," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 111(C), pages 101-112.
    5. Yu, Shunan & Yang, Zhongzhen & Yu, Bin, 2017. "Air express network design based on express path choices – Chinese case study," Journal of Air Transport Management, Elsevier, vol. 61(C), pages 73-80.

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