Network Structure and Airline Scheduling

This paper provides a simple analysis of the e®ects of network structure on the scheduling, tra±c, and aircraft-size choices of a monopoly airline. The analysis shows that switching to an HS network leads to increases in both °ight frequency and aircraft size, while stimulating local tra±c in and out of the hub. In addition, HS networks are shown to be preferred by the airline when travel demand is low, when °ights are expensive to operate, and when passengers place a high value on °ight frequency but are not excessively inconvenienced by the extra travel time required for a connecting trip. The welfare analysis shows that the °ight frequency, tra±c volumes, and aircraft size chosen by the monopolist are all ine±ciently low under both network types. Moreover, in the most plausible case, the monopolist's network choice exhibits an ine±cient bias toward the HS network, apparently re°ecting an excessive desire to economize on the number of °ights. Network Structure and Airline Scheduling