International airline hubbing in a competitive environment

Abstract

Changes in the US domestic airline route system have increased competition between international gateways. To assist in understanding this phenomenon, a system of models that predicts airline passenger flows resulting from different airline gateway hubbing strategies has been developed. The calibrated models predict baseline passenger flows quite accurately. The system was then used to project future traffic at a specific airport under alternative hubbing strategies of an airline. The results show that future international traffic at this airport is strongly sensitive to the airline's choice of strategy.