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Hub and Spoke vs. Point to Point Evan Demick February 28, 2013.

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Presentation on theme: "Hub and Spoke vs. Point to Point Evan Demick February 28, 2013."— Presentation transcript:

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2 Hub and Spoke vs. Point to Point Evan Demick February 28, 2013

3 Agenda Airline Deregulation Point to Point Advantages and Disadvantages Hub and Spoke Advantages and Disadvantages Airplane Manufacturers

4 Airline Deregulation The Civil Aeronautics Board (CAB) controlled all airline pricing, routes, and scheduling prior to 1978 deregulation. Influx of new low cost carriers have entered the market. Fares have decreased across the board for air travelers. Productivity has increased substantially.

5 Point to Point Network Airlines fly passengers from point A to point B with no stops in between (direct flight). Better utilization of aircraft and crews. Minimize travel time No need to disembark and transfer to another plane. No need to rely on other flights being on time at a hub airport. The network will not be as affected by weather or delays.

6 Disadvantages of the Point to Point Network Many cities may not operate on a point to point network. Smaller cities may not operate on these point to point networks because of demand. Higher fares. You pay for convenience.

7 Hub and Spoke Network Many airlines operate centralized hub airports. Typically larger in size and located in larger cities with the ability to handle hundreds of daily flights. Equation of n-1 routes. Network of 10 destinations requires 9 routes. Large hubs provide travelers with hundreds of flight options and locations to travel to. Hubs fly to smaller airports that point to point networks may avoid.

8 Disadvantages of the Hub and Spoke Network Congestion at the hub airport. Airline runs a tight schedule with as many incoming and outgoing flights as possible. This can lead to overcrowding at the airport. Passenger inconvenience. Passengers must disembark and connect to a second flight to reach their final destination. Connecting flights may be hindered by delays and loss of personal belongings. Weather and general delays can impact the whole system.

9 Airplane Manufacturers Input Manufacturers seem to have picked sides in the argument between the two networks Airbus, with the A380 has gambled that airlines will fly smaller aircraft into its hubs, and then transfer passengers to larger aircraft. Boeing, with its new 787 Dreamliner argues that passengers demand more point to point flights on smaller aircraft with greater availability.

10 Conclusion Deregulation occurred in Allowed for greater competition in the industry as well as cheaper fares, improved scheduling, and greater choices in destinations. Point to Point Networks Airlines fly from point A to point B. Simple network and great for passengers. Not the most efficient network.

11 Conclusion Hub and Spoke Networks. Airlines fly passengers from smaller airports into larger hub airports to transfer flights. Airline can operate fewer flights to reach the same destinations as a point to point network. Saves airline money in the long run.

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13 JetBlue Result

14 Airline Comparison Compare different airlines that operate point to point and hub and spoke networks. JetBlue – Hub and Spoke. Southwest – Point to Point. United - Pre-deregulation Airline. Book a flight on each airline from Dulles to Orlando. Look at Costs. Total Travel Time. Number of Connections if Applicable.

15 Southwest Result

16 United Result

17 Table of Results AirlineConnection? JetBlueYes SouthwestYes UnitedNo


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