Measuring the development of airline networks: Comprehensive indicators

Abstract

The literature on airlines presents few studies analyzing the airlines network evolution. We believe that this gap is due to the difficulty of capturing the network complexity in a simple manner. This paper proposes new simple and continuous indicators to measure the airlines' network structure. The methodology to build them is based on graph theory and principal component analysis. We apply this approach to the US domestic market for 2005-2018, and obtain three network indicators. The first one measures how close the network is to a single-center structure. The second indicator measures the airline's ability to provide alternative routes. The third indicator captures the network size. We analyze the indicators evolution across time and show their robustness under different scenarios.

A Network-Design Analysis of Airline Business Model Adaptation in the Face of Competition and Consolidation

“…In addition, Klophaus et al (2012), while investigating changes in European LCCs' business models towards hybrid strategies, found that many airlines deviating from the pure LCC model did so mainly regarding their 'airport choice' and 'network strategy' traits. Lange & Bier (2019) and Roucolle et al (2020), by employing a set of metrics from graph theory followed by a principal component analysis (PCA), provided further evidence of the central role of network structures in defining airlines' business models and in understanding their evolution. Lange & Bier (2019) found that European airlines with related models shared significant similarities, mainly associated with the coverage of their networks and frequencies of service.…”

“…Lange & Bier (2019) found that European airlines with related models shared significant similarities, mainly associated with the coverage of their networks and frequencies of service. Conversely, Roucolle et al (2020) suggested a distinction between American LCCs' and FSCs' domestic network structures in terms of their ability to mitigate disturbances through alternative routings. However, Roucolle et al (2020) did not find the same contrast in terms of the presence of central nodes in these carriers' networks, noted by them as being consistent with recent analyses on the convergence of airline business models.…”

“…Conversely, Roucolle et al (2020) suggested a distinction between American LCCs' and FSCs' domestic network structures in terms of their ability to mitigate disturbances through alternative routings. However, Roucolle et al (2020) did not find the same contrast in terms of the presence of central nodes in these carriers' networks, noted by them as being consistent with recent analyses on the convergence of airline business models. As such, these results seem to justify and pave the way for more econometric-oriented treatments of the business model convergence issue from a network perspective, based primarily on available supply and demand data.…”

“…Lastly, given the results of Jean & Lohmann (2016) and Roucolle et al (2020), we also consider the possible disruptive effects that consolidations may have had on the ongoing evolution of carriers' networks. This concern is relevant given how organizational and structural changes are a frequent companion to consolidations and, understandably, may induce substantial business model diversions.…”

Liberalisation and the regional air network configuration from Nigeria to other West African Countries

“…Deregulation was to a great extent embraced as an approach for minimising government participation in economic affairs. The political functionaries frequently respect regulators with expanding contempt; they are perceived either as hostages of the industry they are regulating or as redundant bureaucrats inhibiting the progression of business (Abeyratne, 2016;Lenaerts, Malina, Allroggen, 2020;Wong et al, 2019;Derudder, Witlox, 2016;Roucolle, Seregina, Urdanoz, 2020). Deregulation was chiefly set on the principle of a theory that the market for a loose airline industry would be pretty accurate, a seamlessly competitive one with a large number of carriers (because of zero sunk costs) and no significant economies of scale or entrance obstacles (Kahn, 1977).…”