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U.S. Air Passenger Service: a Taxonomy of Route Networks, Hub Locations, and Competition

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  • Bania, Neil
  • Bauer, Paul W.
  • Zlatoper, Thomas J.

Abstract

In this paper, we analyze the service provided by the 13 largest U.S. passenger airlines to the 100 most populous U.S. metropolitan areas in 1989. We classify the route systems by their nature and geographic scope using a variety of measures based on route-level data. We then identify individual airline hub locations; derive and calculate several measures of the extent of competition on individual routes, for individual airlines, and at the airports in our sample; and analyze relationships among route structure, costs, and subsequent carrier performance. The results show the wide diversity of route networks that existed in the airline industry in 1989--a phenomenon that may help to explain the eventual failure of several major carriers.

Suggested Citation

  • Bania, Neil & Bauer, Paul W. & Zlatoper, Thomas J., 1998. "U.S. Air Passenger Service: a Taxonomy of Route Networks, Hub Locations, and Competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 34(1), pages 53-74, March.
    • Handle: RePEc:eee:transe:v:34:y:1998:i:1:p:53-74
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    3. Paul W. Bauer & Thomas J. Zlatoper, 1989. "The determinants of direct air fares to Cleveland: how competitive?," Economic Review, Federal Reserve Bank of Cleveland, vol. 25(Q I), pages 2-9.
    4. Severin Borenstein, 1989. "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 344-365, Autumn.
    5. Morrison, Steven A & Winston, Clifford, 1987. "Empirical Implications and Tests of the Contestability Hypothesis," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 53-66, April.
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    airlines hubs competition;

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