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Choice of Aircraft Size - Explanations and Implications

Author

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  • Moshe Givoni

    (Vrije Universiteit Amsterdam)

  • Piet Rietveld

    (Vrije Universiteit Amsterdam)

Abstract

To keep load factors high while offering high frequency service, airlines tend to reduce the size of the aircraft they use. At many of the world’s largest airports there are fewer than 100 passengers per air transport movement, although congestion and delays are growing. Furthermore, demand for air transport is predicted to continue growing but aircraft size is not. This paper aims to investigate and explain this phenomenon, the choice of relatively small aircraft. It seems that this choice is associated mainly with the benefits of high frequency service, the competitive environment in which airlines operate and the way airport capacity is allocated and priced. Regression analysis of over 500 routes in the US, Europe and Asia provides empirical evidence that the choice of aircraft size is mainly influenced by route characteristics (e.g. distance, level of demand and level of competition) and almost not at all by airport characteristics (e.g. number of runways and whether the airport is a hub or slot coordinated). We discuss the implications of this choice of aircraft size and suggest that some market imperfections exist in the airline industry leading airlines to offer excessive frequency on some routes and too low frequency on others.

Suggested Citation

  • Moshe Givoni & Piet Rietveld, 2006. "Choice of Aircraft Size - Explanations and Implications," Tinbergen Institute Discussion Papers 06-113/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20060113
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    File URL: https://papers.tinbergen.nl/06113.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Pai, Vivek, 2010. "On the factors that affect airline flight frequency and aircraft size," Journal of Air Transport Management, Elsevier, vol. 16(4), pages 169-177.
    3. Wang, Kun & Gong, Qiang & Fu, Xiaowen & Fan, Xingli, 2014. "Frequency and aircraft size dynamics in a concentrated growth market: The case of the Chinese domestic market," Journal of Air Transport Management, Elsevier, vol. 36(C), pages 50-58.
    4. Flores-Fillol, Ricardo, 2009. "Congested hubs," Working Papers 2072/15844, Universitat Rovira i Virgili, Department of Economics.

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    More about this item

    Keywords

    aircraft size; frequency; aviation; hub congestion;
    All these keywords.

    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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