Study On The Economies Of Density In Different Route Networks

When constructing the route network,traditional network airlines arrange flights and passenger trips through convergence hubs.While low-cost airlines construct point-to-point route network to reduce costs.Different route network structures have different efficiency and the resulting economic benefits will be different.Studying the economy of route network structure not only provides the theoretical basis for airlines to construct airline network,but also reflects the current status of air transport network.It has important theoretical and practical significance.This dissertation first sorts out the domestic and foreign literatures,founding that the control of network structural variables is the key condition to measure the air transport density economies.Considering the gap between the theoretical network structure and the network structure in practice,this dissertation uses the complex network and factor analysis to construct the index system which reflects the characteristics of the network structure in practice so that we can more comprehensivly control the route network structure.Based on the route network structure variables obtained,combined with the availability of data,this dissertation uses the Seemingly Unrelated Regression method to estimate the translog cost function model,and finally obtains the economies of density in different route networks.Empirical results show that the density economies of the world’s major airlines are not significant,while the density economies of low-cost airlines are more significant than the traditional airlines.In order to fully reflect economies difference in different network structures,this dissertation analyzes the economic performance of different network structures in the case of various network structures,and found that low cost airlines still have higher economies.Based on the empirical results,this dissertation argues that airlines should not be limited to a fixed mode of network structure,but should be based on their own situation to build the rational hub network and innovate management concept of operation,thus gaining a place in the competition.