¨Can we take a direct flight back to reality or do we have to change planes in Denver.¨
Airlines prefer the hub-and-spoke model to the point-to-point model. The hub and spoke model enables airlines to connect the maximum number of destinations with the minimum amounts of routes.
The hub and spoke model also allows the airlines to have a central base of operations, which brings many benefits. Some of these benefits include the ability to:
- Use a small number of aircraft and pilots to cover many destinations.
- Increase routing options between any two destinations. The hub and spoke model allows airlines to keep their planes in the air for more extended periods. It also affords passengers more extensive flight choices. (This is also why airplanes usually do not stay in the airport very long before they take off for another destination).
- Quickly respond if demand increases or decrease on a given route. Let’s say that Columbus suddenly gets a significant company, which increases demand for tickets to Columbus. With the hub-and-spoke model, airlines can increase the number of flights from several hubs to Columbus to tap into the market from all over the US.
- Centralize complicated operations such as cargo sorting, accounting, and passengers switching at a few, central airports. (Centralizing operations saves beaucoup bucks).
Disadvantages of the Hub-and-Spoke Model
Despite the above-noted advantages, the hub-and-spoke model also causes the following problems:
- Congestion and delays at hub airports. Airlines schedule multiple incoming and outgoing flights during a short time frame. Scheduling flights this way allows airlines theoretically to limit waiting times and provide many possible connections for passengers. In reality, however, this type of scheduling often causes problems including:
- Too many airplanes arrive at the same time causing delays due to the scarcity of taxis, runways, and gates.
- Bad weather in one big hub routines causes hundreds of cancelled or delayed flights throughout the US. (This could be ameliorated if airports limited the number of take-offs and landings).
- Airlines achieve too much dominance in the hub city. The airlines that use hubs tend to squeeze out competing airlines in their hub cities. (In some cities, like Minneapolis (Delta), more than 90% of all traffic is one airline. Only a few major airports in the US, like JFK-New York, Chicago-O’Hare, and Los Angeles, serve as a hub for more than one airline). As a result, consumers have little choice but to take the dominant airlines if they live in a hub city (or in a city with a small airport close to the hub city).
- Consumers who live in a hub city that stops functioning as a hub see:
- a substantial reduction in flight availability,and
- a sometimes significant increase in the cost of the few remaining flights.
- Conversely, an airport can become oversaturated after an airline decides to increase its operations at a particular hub airport. Newark Airport, for example, has not recovered from United Airline’s decision to make it a major hub (after United merged with Continental) in 2010. Newark, instead of being an alternative to overcrowded JFK, is now infamous for its awful facilities and frequent delays.