Competiton at 'Duopoly' airline hubs in the U.S.

This paper examines the effect of hub competition on route competition and indirectly on yields at concentrated airports.Previous research has found that yields on routes to or from hubs dominated by one or two carriers are higher than yields on routes to or from non-concentrated airports.It is not apparent, however, from this research whether there are differences in yields between those airports dominated by one carrier (hub monopolies) and those dominated by two carriers (hub duopolies).This study found that there are significantly more competitors on routes to and from hub duopolies than there are on routes to or from hub monopolies.As well, greater numbers of competitors lead to significantly lower yields at the airports in our studies.As a result, it was possible to conclude that hub duopolies contribute, indirectly, to lower yields.Previous research has found that the existence of airport hubs contribute to lower costs for airlines and more convenient flight schedules for passengers.These conclusions, combined with the results from our paper, suggest that an appropriate public policy may be to reduce airport barriers (such as size constraints and gate and slot restrictions) which limit the formation of hub duopolies.