The airline industry in the United States has faced a number of regulations meant to increase profitability and efficiency among the airline companies. According to Bontekoning (2006), most of the United States’ airlines were forced to use the concept of point-to-point routing system where a plane has to fly directly from the point of origin to destination.
However, this proved to be inappropriate for many of the airlines because some of them had to fly their planes at half of their capacity. However, this system changed after the Airline Deregulation Act of 1978. Currently, most of the planes are now using hub and spoke routing system.
Event Chosen and Why it is Theoretically Interesting
The event chosen for this study was an incident in May 14, 2015 when I was travelling from Charleston, SC to Memphis, TN using Delta Airline. I expected a direct flight from Charleston to Memphis because I believed it was cost effective for the airline.
However, we were taken to Hartsfield Atlanta Airport, which is a hub for Delta Airline, before we took another flight to Memphis. I came to realize that the airline was using the hub and spoke routing system as a cost effective way of managing its flights. This event is theoretically interesting because it helps to explain the concepts of point-to-point and hub and spoke routing systems.
The relevant theoretical models chosen to explain the event is point-to-point and hub and spoke routing concepts. These theories help in explaining why an airline would choose to use one route over the other. The major similarity between these concepts is that they can be used by airline, train, or bus travels.
However, the concepts differ in terms of the routing system. While point-to-point involves traveling from a point of origin directly to a destination, hub and spoke system allows a plane to go through a hub from a point of origin before proceeding to the destination.
In the chosen event, most of the passengers were shocked that our plane went through Hartsfield Atlanta airport instead of flying directly from Charleston to Memphis. They did not understand the reason why this was necessary because the management did not explain it to them. Most of us assumed that the stopover was meant to offer passengers time to rest before completing the journey.
The theory that fits this event best is hub to spoke theory. According to Pitt and Norsworthy (2009), hub and spoke routing concept has been widely used in the Theory Economic Geography when explaining the concept of industrial districts. In the transport sector, the concept gained popularity following the Airline Deregulation Act of 1978. Most of the airlines realized that when using point-to-point routing concept, they were sometimes forced to fly planes that carried half their capacities. This system was very costly to the airlines.
That is why after the deregulation, most of the airlines embraced the concept of hub and spoke routing system. This theory is very appropriate in explaining the case presented above. Although the passengers may not understand why an airline may choose to use different routes, it is still appropriate in cutting down the cost of managing the fleets.
This theory has been chosen over the point-to-point routing system because of its popularity and relevance to the airline industry. The industry has been struggling to lower their costs of operations and maximize on their profitability to remain competitive in the global market.
This new routing concept is proving to be relevant in improving efficiency. According to Bontekoning (2006), the hub helps the airline to collect the passengers travelling to the same destination from different points of origin so that they can be transferred to a single plane that will take them to their destinations. It eliminates cases where planes go without passengers. It is a fact that Memphis does not have a heavy traffic, especially from Charleston.
If Delta airline were to travel directly from Charleston to Memphis, then chances are high that most of the flights will have half or less of the expected capacity. The airline may not sustain such operations. It may be forced to cancel such routes or limit the number of flights. This move will not only affect the passengers but also the profitability of the airline firm.
This theory is very important to the players in the aviation industry. According to Macfarlane (2006), most of the international airports and airlines are now more connected than they ever were in the history of aviation because of the hub and spoke routing system. For instance, there are some routes that Delta Airline does not patronize. If it has a passenger who wants to use that route, Delta Airline will not turn down such a passenger.
Instead, it will take its passenger to its hub where he/she will be transferred to another airline that flies that route. The close coordination of these planes makes them to be partners other than rivals in an industry where price war is one of the major threats to the companies. I now understand why we had to be taken to the hub before proceeding with the journey. This concept will help me understand if such a similar event were to occur in future. I will understand the need for the airline to use the hub other than making direct flights.
Limitations of the Observation and the Theory
The observation I made has some limitations which are worth mentioning. According to Ferguson and Nelson (2014), there are cases where a passenger may not witness a hub to spoke routing concept even if an airline is using it. For instance, a passenger who is travelling to Memphis from Hartsfield Atlanta International Airport will not have to pass through another hub.
Such a passenger may not understand the concept of hub and spoke although the airline could be using the concept. That is the major weakness of the observation. It is not a guarantee that when an airline is using a hub and spoke concept, all its flights must be interrupted at some point. Sometimes the flight may be taken directly from point of origin to destination without going through the hub. Wensveen (2012) says that this is common when there are many passengers travelling within the two routes.
This illustrates the weakness of hub and spoke routing concept. This concept is not a silver bullet in solving problems of airline companies. Sometimes planes find it necessary to use point-to-point routing concept, especially when traveling from one international airport to another. For instance, South West Airline may not find it relevant to use hub and spoke concept for flights from the United States to European airports.
Bontekoning, Y. M. (2006). Hub exchange operations in intermodal hub-and-spoke networks: Comparison of the performances of four types of rail-rail exchange facilities. Delft: Delft University Press.
Ferguson, M. D., & Nelson, S. M. (2014). Aviation safety: A balanced industry approach. New York: Cengage.
Macfarlane, J. (2006). Network routing basics: Understanding IP routing in Cisco systems. Indianapolis, IN: Wiley Pub.
Pitt, I. L., & Norsworthy, J. R. (2009). Economics of the U.S. commercial airline industry: Productivity, technology and deregulation. New York: Springer Science+Business Media, LLC.
Wensveen, J. (2012). Air Transportation: A Management Perspective. Burlington: Ashgate Publishing.