Hub-And-Spoke Airlines Versus Low-Cost Airlines And Price Discrimination

Abstract

The purpose of this study is to examine the impact of the continuing trend in the U.S. Airline industry away from hub-and-spoke (network) airlines and toward low-cost airlines. The model of this study examines the level of success which the network carriers may experience by using market segmentation and price discrimination to sustain profitability in the face of the growth in market share held by low-cost carrier airlines.