Revenue and operational impacts of depeaking at U.S. hub airports

Historically, peaked schedules have been used with hub-and-spoke networks to maximize passenger connection opportunities. Although peaked schedules can generate more attractive connecting itineraries and revenue for an airline, they are costly to operate because additional manpower and equipment res...

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Bibliographic Details
Published in:Journal of air transport management 2014-01, Vol.34, p.57-64
Main Authors: Katz, Donald S., Garrow, Laurie A.
Format: Article
Language:English
Subjects:
Airline revenue
Commercial aircraft
Commercial planes
Continuous schedule
Cost engineering
Depeaking
Equipment costs
Flight banks
Hubs
Revenues
Rolling hub
Schedules
Seats
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Summary:Historically, peaked schedules have been used with hub-and-spoke networks to maximize passenger connection opportunities. Although peaked schedules can generate more attractive connecting itineraries and revenue for an airline, they are costly to operate because additional manpower and equipment resources are needed to serve the peak periods. Several airlines experimented with depeaking their hubs as a way to reduce costs and improve operations in the 2000s. Prior studies have quantified operational improvements and cost savings associated with depeaking; however, none have quantified revenue impacts. We use difference-in-differences methods to quantify revenue and operational impacts associated with depeaking for five U.S. hubs. Results show that depeaking tends to improve operations, but may negatively impact revenue per available seat mile (RASM). In some cases, revenue losses exceed reported cost savings. •We quantify revenue and operational impacts of depeaking for five hubs.•Depeaking tends to improve operations, but lowers RASM.•Depeaking can result in revenue losses that outweigh cost savings.
ISSN:0969-6997
1873-2089
DOI:10.1016/j.jairtraman.2013.07.011