The existing literature on airline alliances is

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Unformatted text preview: g literature on airline alliances is sparse. Theoretical huband spoke network models include Brueckner and Spiller (1991), Oum et al. (1995), Park (1997), Berechman et al (1998), Hendricks et al (1999), Barla and Constantatos (2000), Brueckner (2001), Lin (2004) and Hassin and Shy (2004). The papers by Oum et al. (1995), Berechman et al (1998), Hendricks et al (1999) and Barla and Constantatos (2000) provide reasons and conditions under which hub-and-spoke networks are equilibrium structures. Brueckner and Spiller (1991) first developed a hub-and-spoke model where an airline is considered as a multiproduct firm with cost complementarities. They assume a cost function with increasing returns to traffic density and 2 The reader can access www.airwise.com and find plenty of examples where a passenger must change planes on their way to final destination where carriers belong to the same alliance; trips can be made through different hubs. 2 compare the monopoly solution with other solutions involving various types of competition. Competition tran...
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This note was uploaded on 05/12/2010 for the course MAN 6721 taught by Professor Kraft during the Spring '10 term at University of Florida.

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