AIRLINE HUBBING CONCEPTS

Abstract

New forms of cooperation between airlines have been in place since nineties. Airline alliances have been formed among network carriers. Before, cooperation of airlines was based on bilateral agreements on code-sharing of their flights. For instance, in 1989 KLM and Northwest agreed on large-scale code sharing. Nowadays, three major alliances might be recognized - Star Alliance, SkyTeam and oneworld. Together, they count for two thirds of total number of available seat kilometres. Airlines in alliances benefit from extended network and economies of scope and are prone to gain competitive advantage over the market by being able to offer more O&Ds and multiple routings via their hubs. Furthermore, they might save cost by sharing their capacity, facilities (gates, premium lounges) and equipment with partner airlines. Airline networks are defined by served markets, number of destinations, their configuration and airline business models. There are two concepts of network structures recognised nowadays: Hub and spoke and Point-to-point. This paper offers insights to the Hub and spoke concept. First of all, it examines hubbing concepts in general, it describes detailed aspects that influence passenger connectivity and on top of that it offers different hub airports wave patterns and airline hubbing concepts.