Rethinking the hub and spoke airline strategy : an analysis and discussion of American Airline's decision to depeak its schedule at O'Hare International Airport
Name
53915414-MIT.pdf
Description
Full printable version
Size
4.47 MB
Format
Adobe PDF
Checksum (MD5)
08f78b4f6ab691eb196b3b226fbfacfc
Author(s)
Bogusch, Laura Lynn, 1973-
Advisor(s)
R. John Hansman and Thomas Kochan.
Date Issued
2003
Publisher
Massachusetts Institute of Technology
Abstract
The airline industry downturn that began in early 2000 was exacerbated not only by the terrorist attacks in the United States on September 11, 2001, but also by other pressures for strategic change. Continued growth and competition of low cost carriers coupled with changing purchasing habits of passengers have led industry analysts, airline executives, and investors alike, to question the continued viability of the traditional hub and spoke airline strategy. The financial success of Southwest Airlines and other low cost carriers is partly attributable to its high levels of employee productivity and equipment utilization. In April 2002, American Airlines made a step toward emulating this facet of Southwest's strategy by depeaking its flight schedule at Chicago's O'Hare International Airport. American's schedule change was analyzed, and the decision was evaluated from the market share, operational reliability, and cost perspectives. Average connection times increased by 6 minutes, and the average number of connections per arriving flight decreased by 2. Computer Reservation System market share data implied a market share neutral decision. Department of Transportation on-time performance data implied an improvement in reliability. Finally, the reduction in degree of schedule peaking implied a potential cost improvement through increased equipment utilization, lower required staffing levels, and improved employee productivity.
Description
Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Aeronautics and Astronautics; in conjunction with the Leaders for Manufacturing Program at MIT, 2003.
Includes bibliographical references (p. 79-80).
Subjects
Sloan School of Management.
Aeronautics and Astronautics.
Leaders for Manufacturing Program.
MIT Department
Leaders for Manufacturing Program at MIT
Massachusetts Institute of Technology. Department of Aeronautics and Astronautics
Sloan School of Management
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