IDEAS home Printed from https://ideas.repec.org/p/ucn/oapubs/10197-9551.html
   My bibliography  Save this paper

US feeder airlines: Industry structure, networks and performance

Author

Listed:
  • Aisling Reynolds-Feighan

Abstract

This paper examines the US airline industry in terms of the relationships between the three largest full service carriers, American Airlines, Delta Airlines and United Airlines, and the set of regional carriers that are contracted to provide feeder services to them. The evolution of the regional carriers and the full service carriers are compared and recorded and the current industry structure and size is described. The paper uses the full set of Official Airline Guide (OAG) schedules for 2017 to analyse the industry structure and scale, overlap and seasonality in service provision among the groups of carriers and to understand the network organisation and capacity deployment strategy of the largest network carriers in the US market. The analysis provides evidence to explain how the large airlines are improving their cost and financial performance as well as significantly improving their operational efficiency through the achievement of high overall load factors. The sophistication in each airline’s schedule design and service delivery is highlighted.

Suggested Citation

  • Aisling Reynolds-Feighan, 2018. "US feeder airlines: Industry structure, networks and performance," Open Access publications 10197/9551, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:oapubs:10197/9551
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10197/9551
    File Function: Open Access version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Aisling Reynolds-Feighan, 2017. "Small community impacts of liberalization and the provision of social air services," Chapters, in: Matthias Finger & Kenneth Button (ed.), Air Transport Liberalization, chapter 12, pages 220-243, Edward Elgar Publishing.
    2. Silke J. Forbes & Mara Lederman, 2013. "Contract Form and Technology Adoption in a Network Industry," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(2), pages 385-413, April.
    3. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "Air services on thin routes: Regional versus low-cost airlines," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 702-714.
    4. Silke Januszewski Forbes & Mara Lederman, 2009. "Adaptation and Vertical Integration in the Airline Industry," American Economic Review, American Economic Association, vol. 99(5), pages 1831-1849, December.
    5. Bitzan, John & Peoples, James, 2014. "U.S. air carriers and work-rule constraints – Do airlines employ an allocatively efficient mix of inputs?," Research in Transportation Economics, Elsevier, vol. 45(C), pages 9-17.
    6. Matthias Finger & Kenneth Button (ed.), 2017. "Air Transport Liberalization," Books, Edward Elgar Publishing, number 17375, March.
    7. Silke J. Forbes & Mara Lederman, 2010. "Does vertical integration affect firm performance? Evidence from the airline industry," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 765-790, December.
    8. 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.
    9. Brueckner, Jan K. & Pai, Vivek, 2009. "Technological innovation in the airline industry: The impact of regional jets," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 110-120, January.
    10. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "On the optimal distribution of traffic of network airlines," European Economic Review, Elsevier, vol. 56(6), pages 1164-1179.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dobruszkes, Frédéric & Vandermotten, Christian, 2022. "Do scale and the type of markets matter? Revisiting the determinants of passenger air services worldwide," Journal of Air Transport Management, Elsevier, vol. 99(C).
    2. Lonzius, Christopher & Lange, Anne, 2024. "Aircraft routing clusters and their impact on airline delays," Journal of Air Transport Management, Elsevier, vol. 114(C).
    3. Frédéric Dobruszkes & Christian Vandermotten, 2022. "Do scale and the type of markets matter? Revisiting the determinants of passenger air services worldwide," ULB Institutional Repository 2013/336304, ULB -- Universite Libre de Bruxelles.
    4. Chen, Yilin & Hou, Meng & Wang, Kun & Yang, Hangjun, 2023. "Government interventions in regional airline markets based on aircraft size—Welfare and environmental implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 169(C).
    5. Zou, Li & Reynolds-Feighan, Aisling & Yu, Chunyan, 2022. "Airline seasonality: An explorative analysis of major low-cost carriers in Europe and the United States," Journal of Air Transport Management, Elsevier, vol. 105(C).
    6. Frédéric Dobruszkes & Jean-Michel Decroly & Pere Suau-Sanchez, 2022. "The monthly rhythms of aviation: A global analysis of passenger air service seasonality," ULB Institutional Repository 2013/341140, ULB -- Universite Libre de Bruxelles.
    7. Klophaus, Richard & Merkert, Rico & Lordan, Oriol, 2021. "Mesh network as a competitive advantage for European LCCs: An alternative topology to hub-and-spoke for selling online connections," Transport Policy, Elsevier, vol. 106(C), pages 196-204.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gillen, David & Hasheminia, Hamed & Jiang, Changmin, 2015. "Strategic considerations behind the network–regional airline tie ups – A theoretical and empirical study," Transportation Research Part B: Methodological, Elsevier, vol. 72(C), pages 93-111.
    2. Kerry M. Tan, 2018. "Outsourcing and Price Competition: An Empirical Analysis of the Partnerships Between Legacy Carriers and Regional Airlines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(2), pages 275-294, September.
    3. Timothy Bresnahan & Jonathan Levin, 2012. "Vertical Integration and Market Structure [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    4. Brueckner, Jan K. & Flores-Fillol, Ricardo, 2020. "Market structure and quality determination for complementary products: Alliances and service quality in the airline industry," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    5. Fageda, Xavier & Flores-Fillol, Ricardo & Lin, Ming Hsin, 2020. "Vertical differentiation and airline alliances: The effect of antitrust immunity," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    6. Volodymyr Bilotkach, 2019. "Airline Partnerships, Antitrust Immunity, and Joint Ventures: What We Know and What I Think We Would Like to Know," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(1), pages 37-60, February.
    7. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "Air services on thin routes: Regional versus low-cost airlines," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 702-714.
    8. Jan K. Brueckner & Ricardo Flores-Fillol, 2018. "Airline Alliances and Service Quality," CESifo Working Paper Series 7226, CESifo.
    9. Ricard Gil & Myongjin Kim & Giorgio Zanarone, 2022. "Relationships Under Stress: Relational Outsourcing in the U.S. Airline Industry After the 2008 Financial Crisis," Management Science, INFORMS, vol. 68(2), pages 1256-1277, February.
    10. Christopher Hansman & Jonas Hjort & Gianmarco León-Ciliotta & Matthieu Teachout, 2020. "Vertical Integration, Supplier Behavior, and Quality Upgrading among Exporters," Journal of Political Economy, University of Chicago Press, vol. 128(9), pages 3570-3625.
    11. Philip G. Gayle, 2013. "On the Efficiency of Codeshare Contracts between Airlines: Is Double Marginalization Eliminated?," American Economic Journal: Microeconomics, American Economic Association, vol. 5(4), pages 244-273, November.
    12. Legros, Patrick & Newman, Andrew F., 2017. "Demand-driven integration and divorcement policy," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 306-325.
    13. Wang, Chunan & Wang, Xiaoyu, 2019. "Airport congestion delays and airline networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 328-349.
    14. Thomaz, Sarah, 2020. "Effects of asymmetric demands on airline scheduling decisions in a network," Economics of Transportation, Elsevier, vol. 22(C).
    15. Fageda, Xavier & Flores-Fillol, Ricardo, 2012. "On the optimal distribution of traffic of network airlines," European Economic Review, Elsevier, vol. 56(6), pages 1164-1179.
    16. Azar, José & Schmalz, Martin & Tecu, Isabel, 2017. "Anti-Competitive Effects of Common Ownership," IESE Research Papers D/1169, IESE Business School.
    17. Fageda, Xavier & Suau-Sanchez, Pere & Mason, Keith J., 2015. "The evolving low-cost business model: Network implications of fare bundling and connecting flights in Europe," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 289-296.
    18. Xavier Fageda & Ricardo Flores-Fillol, 2010. "Technology, Business Models and Network Structure in the Airline Industry," Working Papers XREAP2010-14, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2010.
    19. Lee, Kangoh, 2023. "Airline operational disruptions and loss-reduction investment," Transportation Research Part B: Methodological, Elsevier, vol. 177(C).
    20. Gianpaolo Parise, 2016. "Threat of entry and debt maturity: evidence from airlines," BIS Working Papers 556, Bank for International Settlements.

    More about this item

    Keywords

    Regional airlines; Feeder airlines; Seasonality; Airline network structures;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucn:oapubs:10197/9551. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nicolas Clifton (email available below). General contact details of provider: https://edirc.repec.org/data/educdie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.