Date of Award

2018

Document Type

Honors Thesis (Open Access)

Department

Colby College. Economics Dept.

Advisor(s)

Timothy P. Hubbard

Second Advisor

Samara R. Gunter

Abstract

This paper uncovers the effects on passengers from United Airlines’ 2014 de-hubbing of Cleveland Hopkins International Airport (CLE). Airline networks are often reorganized for efficiency; during the process, an airport may gain or lose hub operations, affecting passengers in different ways depending on the market environment. I take an empirical approach using difference-in-differences models to analyze 28 quarters of Bureau of Transportation Statistics data. I find that de-hubbing contributed to significant reductions in airfare per mile out of CLE. This is consistent with past cases of de-hubbing where low-cost carriers were present. However, quality measures, including the number of nonstop destinations served and on-time performance, were harmed.

Keywords

hub, airline, merger, network, de-hubbing

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