The Air Transportation Network Hub and Spoke vs

The Air Transportation Network Hub and Spoke vs. Point to Point Evan Demick February 28, 2013

Agenda �Airline Deregulation �Point to Point �Advantages and Disadvantages �Hub and Spoke �Advantages and Disadvantages �Airplane Manufacturers

Airline Deregulation �The Civil Aeronautics Board (CAB) controlled all airline pricing, routes, and scheduling prior to 1978 deregulation. �Influx of new low cost carriers have entered the market. �Fares have decreased across the board for air travelers. �Productivity has increased substantially.

Point to Point Network �Airlines fly passengers from point A to point B with no stops in between (direct flight). �Better utilization of aircraft and crews. �Minimize travel time �No need to disembark and transfer to another plane. �No need to rely on other flights being on time at a hub airport. �The network will not be as affected by weather or delays.

Disadvantages of the Point to Point Network �Many cities may not operate on a point to point network. �Smaller cities may not operate on these point to point networks because of demand. �Higher fares. �You pay for convenience.

Hub and Spoke Network �Many airlines operate centralized hub airports. �Typically larger in size and located in larger cities with the ability to handle hundreds of daily flights. �Equation of n-1 routes. �Network of 10 destinations requires 9 routes. �Large hubs provide travelers with hundreds of flight options and locations to travel to. �Hubs fly to smaller airports that point to point networks may avoid.

Disadvantages of the Hub and Spoke Network �Congestion at the hub airport. �Airline runs a tight schedule with as many incoming and outgoing flights as possible. �This can lead to overcrowding at the airport. �Passenger inconvenience. �Passengers must disembark and connect to a second flight to reach their final destination. �Connecting flights may be hindered by delays and loss of personal belongings. �Weather and general delays can impact the whole system.

Airplane Manufacturers Input �Manufacturers seem to have picked sides in the argument between the two networks �Airbus, with the A 380 has gambled that airlines will fly smaller aircraft into its hubs, and then transfer passengers to larger aircraft. �Boeing, with its new 787 Dreamliner argues that passengers demand more point to point flights on smaller aircraft with greater availability.

Conclusion �Deregulation occurred in 1978. �Allowed for greater competition in the industry as well as cheaper fares, improved scheduling, and greater choices in destinations. �Point to Point Networks �Airlines fly from point A to point B. �Simple network and great for passengers. �Not the most efficient network.

Conclusion �Hub and Spoke Networks. �Airlines fly passengers from smaller airports into larger hub airports to transfer flights. �Airline can operate fewer flights to reach the same destinations as a point to point network. �Saves airline money in the long run.

Thanks for Watching!

Jet. Blue Result

Airline Comparison �Compare different airlines that operate point to point and hub and spoke networks. �Jet. Blue – Hub and Spoke. �Southwest – Point to Point. �United - Pre-deregulation Airline. �Book a flight on each airline from Dulles to Orlando. �Look at Costs. �Total Travel Time. � Number of Connections if Applicable.

Southwest Result

United Result

Table of Results Airline Connection? Jet. Blue Yes Southwest Yes United No