Hub And Spoke System Essay

956 words - 4 pages

The Airline Deregulation Act was signed into law in 1978 and allowed the airline industry to be deregulated which lifted restrictions on where they were allowed to fly (Smithsonian National Air and Space Museum, 2007). This also allowed the airline carriers to be competitive so they needed new ways to operate in order to provide services that travelers were searching for when choosing an airline. One innovation that was pioneered by the major airline carriers in the early 1980s that collectively represented a radical change from the era of regulation was the hub-and-spoke system (Wensveen, 2007). This paper will discuss what the airline hub-and-spoke system is and how it operates. It will also discuss the advantages and disadvantages as well as the economic effects it has on the airline carriers.
The Hub-and-Spoke System Explained
The hub-and-spoke system or network is a system that feeds air traffic from small communities through larger communities to the traveler’s destination via connections at the larger community (Wensveen, 2007). The airline will do most of its operations in the larger communities which the airline will call it its hub. The small communities are the spokes of the network and are connected to the hub by non-stop flights between the different spokes (Aguirregabiria & Ho, 2010). For example, a person wants to travel from Louis Armstrong New Orleans International Airport which is considered a “spoke” city to San Antonio International Airport on United Airlines will have to travel to Houston George Bush Intercontinental Airport and change planes as due to Houston being a hub for United Airlines. Many travelers would wonder why it would not be a direct flight to their destinations but there are many advantages to the hub-and-spoke system.
Advantages of the Hub-and-Spoke System
There are many benefits to the airlines that have implemented the hub-and-spoke system. First, it provides an enormous “multiplier” effect as to the number of city-pairs an airline can serve with a given amount of flight mileage (Wensveen, 2007). It enhances international services to the hubs and to the many airports serving as the spokes, bypassing traditional international gateways (Ashford, Mumayiz, & Wright, 2011). It also enhances domestic services to small cities that as spokes to the airline hubs provide far improved service over the previous point-to-point system (Ashford, Mumayiz, & Wright, 2011). The hub-and-spoke operation permits competition between the airlines and gives smaller communities a wider choice of carriers, more service frequency with convenient connections and more reasonable airfares (Ashford, Mumayiz, & Wright, 2011).
Some disadvantages to the hub-and-spoke system include aircraft arriving in spurts creating congestion and longer turnovers for aircraft and crews between flights. Baggage can also be a problem when a hub gets congested due to short time scheduling connections and...

Find Another Essay On Hub And Spoke System

Singapore Sports Hub Essay

1072 words - 4 pages have been minimized via Extensive training Generalization of method statements Efforts in housekeeping and strict control on site  Sports Hub project was awarded the Green Mark Gold Plus for its innovative moving tier design which features The efficient ultra thin shell roof structure, minimize material usage Energy efficient spectator cooling system (bowl cooling system) Insulation in the

Geography & Aviation Essay

977 words - 4 pages changes across the world. In the United States, deregulation in 1978 led to the elaboration of hub-and-spoke systems with many "spoke" cities feeding traffic into and being fed in turn by traffic from one of several major hubs. Midwest Airlines, for instance, is able to offer higher frequency service to more destinations by consolidating traffic at its two hubs (Derudder, 2007).Research has shown that the largest hubs have gained from their superior

Supply Chain Management

1158 words - 5 pages company's rise. In 1975 Wal-Mart brought in IBM 370/135 computer system to control inventory in store and delivery of items electronically (Waligum, 2007). Wal-Mart focused on the "hub and spoke" system where the hub was the distribution centers and the "spoke" was the local stores (Waligum, 2007). By putting multiple distribution centers in close proximities, Wal-Mart was able to reduce the distance of shipments and eliminated intermediaries and the

Preferential Trade Agreements

1429 words - 6 pages facilities only and produce those goods in larger quantities in which they have absolute or comparative advantage. More trade is expected to raise the standard of living of people in countries. Hub and Spoke structure The hub and spoke structure works in a way that several smaller vehicles (spoke), remain individually managed but pool their assets to contribute to a central investment vehicle (hub). So the well established businesses become the hub

Southwest Airlines Case Study

1119 words - 4 pages industry. Two changes were significant. First, instead of serving short-haul routes, the airlines turned to long-haul routes. This led to regional carriers or new airlines filling in for the short-haul routes. Second, major carriers abandoned point-to-point systems and took up the hub-and-spoke system. The point-to-point system meant non-stop flights between city-pairs and also "shuttle flights" back and forth. The hub-and-spoke system meant that

The Structure of the Airline Industry

2577 words - 10 pages industry observers is whether the airline business model, successful during the 1980s and 1990s, is now sustainable in a market crowded by low-cost carriers which operates more from a point-to-point network rather than a hub-and-spoke system. As pointed out by Bisignani (2004), the future airline structure is a 'low-cost industry' and the agenda is to 'simplify the business' to include safety & security, with the challenge of retaining the value

Advantages and Problems for a City Being a Transport Hub

2554 words - 10 pages the hub of road transport, Shanghai increased accessibility. The first stage of National Trunk Highway System was built during 1990 to 2000. According to Li and Shum (2001), the total time for traveling from Shanghai to 31 provincial cities is 1135.6 hours in 1990 and 627.1 hours in 2000. This shows a great improvement of the city’s accessibility. Also the percentage change of traveling hours of Shanghai is the second highest among the 31 major

UPS: Making Air Package Deliveries

1128 words - 5 pages strategies UPS has seven regional hubs in the US with operations worldwide. UPS uses its own hub-and-spoke system to expedite its cargo around the world, but its principal hub is Louisville International Airport. The UPS air hub at Louisville is called Worldport. UPS selected Louisville has their hub for two reasons. First, because of its location as UPS can reach the majority of the US population within two or three flight hours. Second, Louisville

Analysis of Great Lakes Airlines’ Portfolio

2415 words - 10 pages Structure and Airport Hub Strategies Great Lakes Airlines provides service to 34 airports, four of which are hubs that are the basis of its hub-and-spoke route structure. The four airports are Los Angeles International Airport (LAX), Denver International Airport (DEN), Phoenix Sky Harbor International Airport (PHX), and Minneapolis-St. Paul International Airport (MSP). The Center for Advanced Aviation System Development, the FAA, and The MITRE

Expansion of the piedmont Triangle International Airport

1148 words - 5 pages evictions are being done through a lottery system, if ones address is selected, then they will be moved out. This is not fair to the citizens who have worked hard to establish something they can call home, and then have it taken away with such unconcern. ( This airport expansion would also use land unwisely. The Fed Ex Hub is set to be 300 acres, which is about the size of 238 football fields. The third runway would

Case study - Management at Southwest Airlines

977 words - 4 pages company ranks highly on most publications' Most Admired Companies lists. Efficiency means using resources wisely and in a cost effective way. The Southwest Airline exists point on behalf of the case. ✓ Southwest didn't adopt the hub-and-spoke system ✓ It preferring a short-haul ✓ Point to point schedule ✓ Carrier operates out of small ✓ Use less expensive airports in many major markets Effectively means making the

Similar Essays

Microeconomics In Aviation Industry Essay

1179 words - 5 pages deliver the same level of service to all customers at all branches, new and old. (Richard 2002, 177)For these companies, Microeconomics has genuinely become an enabler of change that boosts competitive performance. The secret: a "hub -and- spoke" approach to building the kind of information systems that lend themselves to rapid, continual improvement. One US bank has even moved to a hub -and- spoke system, with more than 10,000 user interfaces

Data Warehouse Architecture Essay

545 words - 2 pages . From the result of the web-based survey, it is understood that hub and spoke architecture is the most prevalent architecture followed by bus architecture, centralized architecture, independent data marts and federated. The study findings show conclusively that independent data marts are the weakest solution in terms of information quality, system quality, individual impacts and organizational impacts (Ariyachandra & Watson, 2008). In

Technology & Business Essay

509 words - 2 pages &subid=US-ET-ADS&hl=en_US Preliminary draft of Q2: Since the advent of modern technology, product distribution has come along in leaps and bound. Now, huge “Hub & Spoke & Spoke” networks are a viable option. A hub and spoke network is when there is one big warehouse where all the imports and stock is delivered to. This can then be dispatched down

Southwest Airlines' Success Essay

697 words - 3 pages selected a different approach – shorthaul and point-to-point. Even though most of the airline companies have been using the hub-and-spoke approach, the Southwest old-fashioned, but exceptional design has been based on the shorter flights in term of distance and durations. Nearly all Southwest flights are offered in segments such as one-way and non-stop. Despite offering more travel distanation flexibility through “hub-and-spoke” system, the point