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The market size of a city-pair route at an airport

Author

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  • Chaug-ing Hsu

    (Department of Transportation Engineering and Management, National Chiao-Tung University, 1001 Ta Hsueh Road, Hsinchu, Taiwan 30050, Republic of China)

  • Yai-hui Wu

    (Department of Transportation Engineering and Management, National Chiao-Tung University, 1001 Ta Hsueh Road, Hsinchu, Taiwan 30050, Republic of China)

Abstract

A model is developed for estimating the size of the market for a city-pair route at an airport from both the demand and supply sides of air transportation. The average airport access cost, average passenger delay cost, and average airline operating cost all either increase or decrease with an increase in the market size of a city-pair route at an airport, so the optimum market size can be determined from trade-offs among these costs. A nonlinear mathematical programming problem is formulated to determine the optimal number of passengers, the local service area of a city-pair market and to perform sensitivity analyses. The results show that long-haul services ought to be concentrated in one large airport, while short-haul services might be dispersed among many small airports. Improvements in the technology of the airport access mode or increases in the average income of the cities served can expand the market size and service area, but at a declining expansion rate. In metropolitan areas with high population density, airlines can operate more efficiently and distribute air services among more airports. City-pair markets with stable passenger demand, or markets served by airlines with efficient scheduling technology are shown to exhibit high cost efficiencies.

Suggested Citation

  • Chaug-ing Hsu & Yai-hui Wu, 1997. "The market size of a city-pair route at an airport," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(4), pages 391-409.
    • Handle: RePEc:spr:anresc:v:31:y:1997:i:4:p:391-409
    Note: Received: August 1995 / Accepted in revised form: February 1997
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    Cited by:

    1. Ryerson, Megan S. & Kim, Amy M., 2018. "A drive for better air service: How air service imbalances across neighboring regions integrate air and highway demands," Transportation Research Part A: Policy and Practice, Elsevier, vol. 114(PA), pages 237-255.

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