Expansion of point-to-point routes by low-cost carriers in hub networks : traffic and revenue impacts

Legacy carriers developed hub networks to achieve a high concentration of operations, increase frequency, and serve multiple Origin-Destination markets with maximum efficiency. By contrast, the rapid emergence of low-cost carriers (LCCs) is mainly based on a low-fare entry strategy in point-to-point markets competing with the traditional connecting paths offered by the legacy carriers via their hubs. This thesis examines the traffic and revenue impacts of an LCC developing a point-to-point network in a legacy hub network environment. To this purpose, we use the Passenger Origin-Destination Simulator (PODS) to perform all quantitative evaluations. Modeling the choice of travelers with regard to flight schedules and fares, as well as the airlines' revenue management systems, PODS allows one to investigate the changes in aggregate and disaggregate airline statistics following the introduction of low-fare service on point-to-point routes. The first goal of the thesis is to review and update models of passenger choice between connecting legacy and non-stop low-cost paths. The review of the literature on air traveler choice provides parameters and benchmarks critical to the calibration of PODS.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Aeronautics and Astronautics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Zerbib, Gregory (Gregory Jean-Jacques)

Advisor dc:contributor.advisor

• Peter P. Belobaba and Amedeo Odoni.

• Aeronautics and Astronautics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/35557

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/35557