The Impact of Passengers' Preferences Regarding Time and Service Quality on Airline Network Structure

The purpose of this paper is to explain the choice of network structure of a monopoly airline as well as flight frequency and aircraft capacity allocations across the network. The influence of travel time, flight frequencies, and service qualities are considered in relation to passenger behaviour, and how they therefore affect network structure. The investigation shows that a profit-maximising monopoly airline will adjust frequencies and capacities if traffic densities vary; while under symmetric demand airlines should either operate a huband-spoke or a point-to-point network. © The London School of Economics and the University of Bath 2002