Effects of increased nonstop routing on airline cost and profit

Delaysin theUnitedStatesair transportationindustryareincreasingevery year, with correspondinglyincreasingcosts.Delaysareparticularlybadat hubairports,dueto theextra demandplacedontheseconnectingpoints.Thispaperaddresses oneapproachto helpalleviate this problem,thatof shifting capacityfrom hub-and-spok e flights to nonstopflights. In orderto evaluatetheeffectsof sucha change,we analyzethemarket shareandrevenue benefitsof addingnew nonstopflights to a market previously served only by connecting service,andexaminethe actualcost of delays. The MIT ExtensibleAir Network Simulation, developedin supportof this work, is alsopresented.For a sampleanalysisfor ContinentalAirlines, it is found that over $550,000per day in additionalprofit could be obtainedby reassigningflightsaway from thecongestedhubs. This documentis basedon the thesisof Terran Melconiansubmittedto the Departmentof AeronauticsandAstronauticsattheMassachusettsInstituteof Technology in partial fulfillmentof therequirementsfor thedegreeof Masterof Sciencein Aeronauticsand Astronautics.