Estimating the consumer welfare effects of de-hubbing: The case of Malév Hungarian Airlines

We document and analyze events that followed bankruptcy of Malév Hungarian Airlines on February 3, 2012. Most of the new services post-bankruptcy came from low-cost point-to-point carriers. Flight frequency offered by such carriers is lower than what was offered by the network airline. Yet, fares charged by these airlines are presumably also lower. We suggest a methodological approach to analyze the corresponding trade-off, and apply it to our data. We conclude that passengers flying to seven out of eighteen former Malév destinations where point-to-point carriers entered might be worse off despite potentially paying lower prices.