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A platform for research: civil engineering, architecture and urbanism
Airline network choice and market coverage under high-speed rail competition
Highlights An airline may change its network and market coverage when facing HSR competition on trunk routes. Prior to HSR, an airline has fully-connected network and few fringe markets if trunk market is large. With HSR an airline has greater incentive to cover more fringe markets if trunk market is large. HSR competition can induce the airline to adopt network structure closer to the social optimum.
Abstract While the existing literature has focused on the short-term impacts, this paper investigates the long-term impacts of high-speed rail (HSR) competition on airlines. An analytical model is developed to study how an airline may change its network and market coverage when facing HSR competition on trunk routes. We show that prior to HSR competition, an airline is more likely to adopt a fully-connected network and cover fewer fringe markets if the trunk market is large. Under HSR competition, the airline will, for a given network structure, have a greater incentive to cover more fringe (regional or foreign) markets if the trunk market is large, or the airline network is close to hub-and-spoke. Further, the airline will, for any given market coverage, move towards a hub-and-spoke network when the trunk market is large, or the number of fringe markets covered by the airline network is large. Both effects are more prominent when the decreasing rate of airline density economies is large. We further show that HSR competition can induce the airline to adopt network structure and market coverage that are closer to the socially optimal ones, thereby suggesting a new source of welfare gain from HSR based on its long-term impacts on airlines. Implications for operators, policy makers and specific countries (such as China) are also discussed.
Airline network choice and market coverage under high-speed rail competition
Highlights An airline may change its network and market coverage when facing HSR competition on trunk routes. Prior to HSR, an airline has fully-connected network and few fringe markets if trunk market is large. With HSR an airline has greater incentive to cover more fringe markets if trunk market is large. HSR competition can induce the airline to adopt network structure closer to the social optimum.
Abstract While the existing literature has focused on the short-term impacts, this paper investigates the long-term impacts of high-speed rail (HSR) competition on airlines. An analytical model is developed to study how an airline may change its network and market coverage when facing HSR competition on trunk routes. We show that prior to HSR competition, an airline is more likely to adopt a fully-connected network and cover fewer fringe markets if the trunk market is large. Under HSR competition, the airline will, for a given network structure, have a greater incentive to cover more fringe (regional or foreign) markets if the trunk market is large, or the airline network is close to hub-and-spoke. Further, the airline will, for any given market coverage, move towards a hub-and-spoke network when the trunk market is large, or the number of fringe markets covered by the airline network is large. Both effects are more prominent when the decreasing rate of airline density economies is large. We further show that HSR competition can induce the airline to adopt network structure and market coverage that are closer to the socially optimal ones, thereby suggesting a new source of welfare gain from HSR based on its long-term impacts on airlines. Implications for operators, policy makers and specific countries (such as China) are also discussed.
Airline network choice and market coverage under high-speed rail competition
Jiang, Changmin (author) / Zhang, Anming (author)
Transportation Research Part A: Policy and Practice ; 92 ; 248-260
2016-01-01
13 pages
Article (Journal)
Electronic Resource
English
Passengers’ choice of airline under competition: the use of the logit model
| Taylor & Francis Verlag | 1992