This study examines hub-carrier scheduling and hub-airport congestion pricing using a simple hub-spoke network model incorporating both schedule delays and congestion delays. We find that in the short-middle run, where aircraft size is given exogenously, hub-airport congestion tolls are not needed at the social optimum if the (negative) congestion delay effect is more or less offset by the (positive) schedule delay effect. In the long run, where aircraft size is decided endogenously, at the social optimum, it is not necessary to impose congestion tolls via a per-flight charge or via per-passenger charges. This is in stark contrast to the results of existing literature. Interestingly, we further find that when the per-flight charge is weight related, a profit-maximizing (privatized) hub airport imposes schedule and congestion delay costs via per-flight charges, but there are no delay cost terms in the private optimal per-passenger charges. However, when the per-flight charge is movement related, it imposes schedule and congestion delay costs via both per-flight charges and per-passenger charges. These “private” optimal congestion-pricing rules provide useful insights into privatized, or profit-maximizing/emphasizing, hub airports.

This volume examines the role that airports play in economic development and land values, the regulation and economic efficiency of airports, airport pricing and competition, and the role played by airports in influencing airline operations and networks.

Airline Operations and Management: A Management Textbook presents a survey of the airline industry, with a strong managerial perspective. It integrates and applies the fundamentals of several management disciplines, particularly operations, marketing, economics and finance, to develop a comprehensive overview. It also provides readers with a solid historical background, and offers a global perspective of the industry, with examples drawn from airlines around the world. Updates for the second edition include: Fresh data and examples A range of international case studies exploring real-life applications New or increased coverage of key topics such as the COVID-19 pandemic, state aid, and new business models New chapters on fleet management and labor relations and HRM Lecture slides for instructors This textbook is for advanced undergraduate and graduate students of airline management, but it should also be useful to entry and junior-level airline managers and professionals seeking to expand their knowledge of the industry beyond their functional area.