AIRLINE ROUTES AND METROPOLITAN AREAS: CHANGING ACCESS TO NONSTOP SERVICE UNDER DEREGULATION

As air transportation becomes more accessible to millions of Americans, the evolving network of airline routes continues to evoke both criticism and controversy. Some metropolitan areas are developing extensive nonstop air transportation networks, whereas others, often of similar size and economic status, continue to be served primarily by less desirable and more time-consuming connecting air flights. As shown by this study, these patterns are predictable and efficient market outcomes as carriers simultaneously attempt to minimize costs and cater to the diverging demands of consumers for high-quality and low-priced air service. Three aspects of airline route development are explored in detail: (a) why disparities in air route coverage have emerged among similarly sized metropolitan areas since deregulation, (b) which economic factors are acting to eliminate these disparities, and (c) in what cities consumers appear to be benefiting most from these arrangements. A computer-assisted survey of airline schedules and traffic volumes is conducted for each of the 60 largest population centers in the United States. The disparities in nonstop service among these cities are shown to be partly a result of economies of aircraft size, a factor that renders nonstop air service uneconomical compared with hub service in most city pairs. Market size, length of haul, and proximity to hubs are hypothesized as important determinants of the level of nonstop service provided. More recent trends suggest that other factors are encouraging carriers to move away from centralized hub operations--a reversal attributed to rising demand, falling costs, and varying pricing opportunities between cities.