Document Type
Article
Publication Date
1998
Abstract
We explore how an incumbent airline firm structures its route network under the threat of entry caused by deregulation. We show that entry induces the incumbent firm to strategically alter its flight operating network from a fully connected network (FC) to a hub-and-spoke network (HS). While most of the literature always assumed that the use of of HS network is primarily for the purpose of cost reduction, we show that hub-and-spoke operation can be used as a strategic device by the incumbent firm when it faces a threat of entry in its operating zone.
Recommended Citation
Berechman, J., Poddar, S., & Shy, O. (1998). Network structure and entry in the deregulated airline industry. Keio Economic Studies, 35(2), 71-82.
Peer Reviewed
1
Copyright
Keio Economic Society
Comments
This article was originally published in Keio Economic Studies, volume 35, issue 2, in 1998.