Leon N. Moses Distinguished Lecture in Transportation

Convenient Flight Connections vs. Airport Congestion: Modeling the "Rolling Hub"

Tuesday, October 27, 2015 | 7:30 pm

Jan K. Brueckner
Professor of Economics, University of California, Irvine

Introduction by Ian Savage, Professor of Instruction and Associate Chair, Department of Economics, Northwestern University


Introduction Slides
 | Presentation Slides | Video

Abstract

This talk addressed the trade-off between convenient flight connections and airport congestion, a fundamental but untreated element in the economics of hub-and-spoke networks. It was based on a continuous spatial model that illustrates this trade-off in a framework where a small gap between flight operating times raises congestion while also shortening a connecting passenger's layover time. When the passenger's cost per unit of layover time rises, the monopoly airline chooses to narrow the gap between its flights, yielding shorter layovers but more congestion. A discrete spatial model, where flights congest one another only if they operate in the same discrete period, makes this layover-cost effect discontinuous: the monopoly carrier concentrates (deconcentrates) its flights when this cost is high (low) relative to the costs of congestion. When fringe carriers are present, however, the hub carrier always concentrates its flights, either partially or fully. But the presence of a second hub carrier leads to an equilibrium mirroring the monopoly outcome: the carriers concentrate their flights in different periods when the layover cost is high and deconcentrate them otherwise. The paper also presents a welfare analysis, showing that movement from the equilibrium to the social optimum typically requires greater carrier separation.


Speaker Biography

Jan BruecknerJan K. Brueckner is Professor of Economics at the University of California, Irvine, and formerly taught at the University of Illinois. He received an B.A. from UC Berkeley and a Ph.D. from Stanford University and has published over 130 scholarly articles dealing with a variety of topics in applied microeconomics. His early work on the airline industry provided some of the first economic analysis of hub-and-spoke networks. He has written more recently on international airline alliances, and other recent work deals with airport congestion, airport noise, and aviation emissions, and airline bag fees. 

Brueckner was an academic affiliate at LECG, LLC, working for a number of aviation clients, and is currently an academic affiliate at Compass Lexecon. He has also consulted independently for American Airlines, United Airlines, Northwest Airlines, the Star Alliance, and US Department of Transportation.


The Leon N. Moses Distinguished Lecture in Transportation is named in honor of noted transportation economist  and former director of the Transportation Center, Emeritus Professor Leon N. MosesDr. Moses passed away on Oct. 12, 2013.