Several airline consolidation events have recently been completed both in Europe and in the United States. The model we develop considers two airlines operating hub-and-spoke networks, using di¤erent hubs to connect the same spoke airports.We assume the airlines to be vertically di¤erentiated, which allows us to distinguish between primary and secondary hubs. We conclude that this di¤erentiation in air services becomes more accentuated after consolidation, with an increased number of ‡ights being channeled through the primary hub. However, congestion can act as a brake on the concentration of ‡ight frequency in the primary hub following consolidation. Our empirical application involves an analysis of Delta's network following its merger with Northwest. We …nd evidence consistent with an increase in the importance of Delta's primary hubs at the expense of its secondary airports. We also …nd some evidence suggesting that the carrier chooses to divert tra¢ c away from those hub airports that were more prone to delays prior to the merger, in particular New York's JFK airport.