Hub Dominance and Runway Capacity Constraint in Air Cargo Transport Markets: Model Analysis

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Abstract

This paper discusses the theoretical framework for considering network design and choice of aircraft size in order to understand the hub dominance in the air cargo transport markets. The model is a bi-level market model that is constructed by freight carriers' behavior as leader, and shippers' behavior as follower. We assume the duopoly market in which freight carriers aim to maximize their profit by designing shipping network. Shippers aim to reduce their generalized shipping cost which consists of shipping time, waiting time, tariff and congestion. We assume that the equilibrium flow of commodities is given as stochastic user equilibrium flow. Computation results suggest that the carrier which holds the dominant hub airport rules the market but the hub dominance is unstable. Hub dominance heavily depends on the balance between runway capacity and local cargo flows.

Journal

  • Proceedings of the Eastern Asia Society for Transportation Studies

    Proceedings of the Eastern Asia Society for Transportation Studies 2009(0), 143-143, 2009

    Eastern Asia Society for Transportation Studies

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