Future of Airline Hubbed Networks: Some Policy Implications

Abstract

By hubbing at a few airports, airlines can maintain high levels of aircraft utilization and take advantage of the economies of aircraft size. Passengers also benefit in the form of increased frequency of service. However, increased aircraft operations at major hubs imply certain diseconomies that include congestion delay, increased workload on air-traffic controllers, noise, and pollution. Using a network equilibrium model, this study attempts to project the future structure of domestic networks and to discuss some policy implications. The results suggest that network hubbing will continue to persist as an important feature of air transportation, but in a multihub system. Unless expanded substantially, major hubs will suffer from escalated levels of delays and will become mostly traffic-generator airports instead of connecting and transfer points. Some implications to the concept of wayports, hub pricing, and the role of aircraft technology in relieving delays at major hubs are also discussed.