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2016 | OriginalPaper | Chapter

10. The Network Analysis of Transportation

Author : Akio Kawasaki

Published in: Sustainable Growth and Development in a Regional Economy

Publisher: Springer Japan

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Abstract

Since the deregulation of the airline market in 1978, airline networks have rapidly changed. During this time, regional carriers and low-cost carriers (LCCs) have entered or exited airline markets. According to Bamberger and Carlton [1], in 2003, LCCs other than Southwest entered 38 hub routes and 31 non-hub routes (Southwest entered only two non-hub routes). In the same year, major carriers entered 76 own hub routes, 40 other hub routes, and 216 non-hub routes.

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Footnotes
1
The economic efficiency relative to a point-to-point network comes from the fact that the incumbent enjoys benefits from higher flight frequencies. The resulting welfare under the adopted hub–spoke network could be superior to that in a point-to-point one. For this argument in a monopoly carrier case, see Brueckner [2] and Kawasaki [5], among others.
 
2
This assumption was also made by Oum et al. [9], Brueckner [2], and Brueckner and Flores-Fillol [3].
 
3
See, for example, Kawasaki [5].
 
4
For example, LCCs tend to use point-to-point networks, do not construct flight schedules that consider connecting passengers’ transit, and thus have a very low percentage of connecting passengers.
 
5
Because the demand function for market AB is the same as Eq. (10.2), we omit its demand function here. This comment is valid in the following subsections.
 
6
Recall that the regional carrier enters route AC to avoid the large scheduling effect of the major carrier when the latter enters route AC.
 
Literature
1.
go back to reference Bamberger, G. E., & Carlton, D. W. (2006). Predation and the entry and exit of low-fare carriers. In L. Darin (Ed.), Advances in airline economics: Competition policy and antitrust (Vol. 1, pp. 1–23). Boston: Elsevier. Bamberger, G. E., & Carlton, D. W. (2006). Predation and the entry and exit of low-fare carriers. In L. Darin (Ed.), Advances in airline economics: Competition policy and antitrust (Vol. 1, pp. 1–23). Boston: Elsevier.
2.
go back to reference Brueckner, J. K. (2004). Network structure and airline scheduling. Journal of Industrial Economics, 52, 291–312.CrossRef Brueckner, J. K. (2004). Network structure and airline scheduling. Journal of Industrial Economics, 52, 291–312.CrossRef
3.
go back to reference Brueckner, J. K., & Flores-Fillol, R. (2007). Airline schedule competition. Review of Industrial Organization, 30, 161–177.CrossRef Brueckner, J. K., & Flores-Fillol, R. (2007). Airline schedule competition. Review of Industrial Organization, 30, 161–177.CrossRef
4.
go back to reference Flores-Fillol, R. (2010). Congested hub. Transportation Research Part B, 44, 358–370.CrossRef Flores-Fillol, R. (2010). Congested hub. Transportation Research Part B, 44, 358–370.CrossRef
5.
go back to reference Kawasaki, A. (2008). Network effects, heterogeneous time value, and network formation in the airline market. Regional Science and Urban Economics, 38, 388–403.CrossRef Kawasaki, A. (2008). Network effects, heterogeneous time value, and network formation in the airline market. Regional Science and Urban Economics, 38, 388–403.CrossRef
6.
go back to reference Kawasaki, A. (2012). Hub location with scheduling effects in a monopoly airline market. Annals of Regional Science, 49, 805–819.CrossRef Kawasaki, A. (2012). Hub location with scheduling effects in a monopoly airline market. Annals of Regional Science, 49, 805–819.CrossRef
7.
go back to reference Kawasaki, A., & Lin, M. H. (2013). Airline schedule competition and entry route choices of low-cost carriers. Australian Economic Review, 52, 97–114. Kawasaki, A., & Lin, M. H. (2013). Airline schedule competition and entry route choices of low-cost carriers. Australian Economic Review, 52, 97–114.
8.
go back to reference Lin, M. H., & Kawasaki, A. (2012). Where to enter in hub-spoke airline networks. Papers in Regional Science, 91, 419–437. Lin, M. H., & Kawasaki, A. (2012). Where to enter in hub-spoke airline networks. Papers in Regional Science, 91, 419–437.
9.
go back to reference Oum, T. H., Zhang, A., & Zhang, Y. (1995). Airline network rivalry. Canadian Journal of Economics, 28, 836–857.CrossRef Oum, T. H., Zhang, A., & Zhang, Y. (1995). Airline network rivalry. Canadian Journal of Economics, 28, 836–857.CrossRef
Metadata
Title
The Network Analysis of Transportation
Author
Akio Kawasaki
Copyright Year
2016
Publisher
Springer Japan
DOI
https://doi.org/10.1007/978-4-431-55294-9_10