Tehnika (Jan 2014)

Airline network structure in competitive market

  • Babić Danica D.,
  • Kalić Milica Đ.

DOI
https://doi.org/10.5937/tehnika1406023B
Journal volume & issue
Vol. 69, no. 6
pp. 1023 – 1031

Abstract

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Airline's network is the key element of its business strategy and selected network structure will not have influence only on the airline's costs but could gain some advantage in revenues, too. Network designing implies that an airline has to make decisions about markets that it will serve and how to serve those markets. Network choice raises the following questions for an airline: a) what markets to serve, b) how to serve selected markets, c) what level of service to offer, d) what are the benefits/cost of the that decisions and e) what is the influence of the competition. We analyzed the existing airline business models and corresponding network structure. The paper highlights the relationship between the network structures and the airline business strategies. Using a simple model we examine the relationship between the network structure and service quality in deregulated market.

Keywords