Measuring the development of airline networks: Comprehensive indicators

• Published in: IDEAS Working Paper Series from RePEc 2020-03, Vol.133, p.303-324
• Main Authors: Roucolle, Chantal, Seregina, Tatiana, Urdanoz, Miguel
• Format: Article
• Language: English
• Subjects: Airline; Airlines; Economics and Finance; Graph theory; Humanities and Social Sciences; Indicators; Network; Principal Component Analysis (PCA)
• ISSN: 0965-8564; 1879-2375
• DOI: 10.1016/j.tra.2019.12.010

•Propose a methodology to build airline network structure indicators.•Combine graph theory and principal component analysis.•Obtain three indicators to characterize airline network structure for US domestic market.•Represent the indicators evolution.•Analyze the impact of the main US mergers on the network structure. The literature on airlines presents few studies analyzing the airlines network evolution. We believe that this gap is due to the difficulty of capturing the network complexity in a simple manner. This paper proposes new simple and continuous indicators to measure the airlines’ network structure. The methodology to build them is based on graph theory and principal component analysis. We apply this approach to the US domestic market for 2005–2018, and obtain three network indicators. The first one measures how close the network is to a single-center structure. The second indicator measures the airline’s ability to provide alternative routes. The third indicator captures the network size. We analyze the indicators evolution across time and show their robustness under different scenarios.