Hub and Spoke Versus Low-cost Carriers: How Southwest Achieved Success in a Market Dominated by Network Airlines
Open Access
Author:
Joyce, Lindsey Marie
Area of Honors:
Supply Chain and Information Systems
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Dr. Robert Alexander Novack, Thesis Supervisor Dr. John C. Spychalski, Thesis Honors Advisor
Keywords:
airlines Southwest USAirways low-cost hub and spoke network structure
Abstract:
In the current domestic market, two types of airline structures dominate--hub and spoke networks and low cost carriers. After deregulation in the 1970s airlines were allowed to structure their networks however they chose. The modern hub and spoke system evolved from this time and became dominant in the market place, monopolizing air travel. However, in recent years, with the expansion of low cost carriers like Southwest, hub and spoke airlines are being challenged. This thesis will aim to answer the question, what makes Southwest profitable while other airlines struggle? The study begins by describing the overall landscape of the airline industry, then goes into a comparison between Southwest and USAirways. Finally, an explanation is provided regarding specific aspects of Southwest's business model that enable success in today's market and implications for the future of passenger airlines.
