The Air Transportation Network - PowerPoint Presentation

Slide1

The Air Transportation Network

Hub and Spoke vs. Point to Point

Evan DemickFebruary 28, 2013Slide2

Agenda

Airline Deregulation Point to PointAdvantages and DisadvantagesHub and Spoke

Advantages and DisadvantagesAirplane ManufacturersSlide3

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. Slide4

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. Slide5

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. Slide6

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. Slide7

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. Slide8

Airplane Manufacturers Input

Manufacturers seem to have picked sides in the argument between the two networksAirbus, with the A380 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.Slide9

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. Slide10

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. Slide11

Thanks for Watching!Slide12

JetBlue ResultSlide13

Airline Comparison

Compare different airlines that operate point to point and hub and spoke networks.JetBlue – 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. Slide14

Southwest ResultSlide15

United ResultSlide16

Table of Results

Airline

Connection?

JetBlue

Yes

Southwest

Yes

United

No