Airlines and Hub-and-Spoke

The most important developments in the American airline industry over the past generation have not come about through technological advances - although certainly there have been some important technical break-throughs such as more efficient wing de-icers that make flying in cold weather much safer than it once was - but through advances in the ways in which airline companies are organized. This paper examines the effects of some of those changes in what we might call the social structure of airlines, including the rise of the importance of a hub-and-spoke system throughout the industry, the effects of mergers between airline companies, and the consequences of code sharing for those companies. While there have been some advantages for the airline passenger in these changes in the ways in which airline companies are structured, in general these changes have served to benefit the companies and their stockholders at the expense of ordinary consumers.

Not so very long ago, the conventional wisdom for organizing air travel (and thus the conventional for how companies distributed their planes) was that one limited the number of miles that planes had to fly out of their way, concentrating on shuttling planes back and forward from one (hopefully popular) destination to another so as not to waste expensive fuel. This model - which certainly makes a great deal of intuitive sense - has been scrapped by a number of airline companies for a hub-and-spoke system. In a hub-and-spoke system,

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hey have become increasingly vocal in the post 9/11 economic environment in which airlines have been hard hit. Passengers who before might before been willing to put off with inconvenience of having to fly through a hub are less inclined to do so now. And even before 9/11, some airline industry critics argued that the hub-and-spoke system (in part because it ensures that each plane owned by an airline is used on more flights) may be less well maintained than under a point-to-point system for a number of different reasons. The air traffic control system and airport capacity at airline hubs have become overloaded during scheduled periodic surges, and reliability and safety can be compromised�. Hub operations also affect en route ATC reliability and efficiency, and both local and national weather handling flexibility. The deliberate surging and bunching of air traffic to and from hubs creates overloads on an air traffic control system that might otherwise adequately handle the needs of the nation's commerce�. Takeoff and landing phases of flight are the most dangerous periods air travelers face, yet a traveler flying coast-to-coast to and from medium-population U.S. cities is likely to encounter four or more takeoff and landing cyc

Category: Business - A