Title

Could market power explain hub premiums?

Document Type

Journal article

Source Publication

Journal of Air Transport Management

Publication Date

9-1-2017

Volume

64

Issue

A

First Page

55

Last Page

59

Publisher

Elsevier Ltd

Abstract

Hub carriers tend to charge higher fares to their passengers at their hubs. The additional charge is called the hub premium. Different studies have discussed the possible causes of the hub premium. Using the fare data at Hong Kong International Airport, this paper aims at empirically examining the factors affecting the hub premium for both economy and business class markets. The random effect models are employed in the analysis. Consistent with the theoretical results in the literature, airport market concentration, market power, flight frequency and distance are identified as significant factors that affect the hub premium in Hong Kong. In addition, this paper further investigates the impact of strategic alliance and the acquisition of Dragonair by Cathay Pacific on the hub premium.

DOI

10.1016/j.jairtraman.2017.06.024

Print ISSN

09696997

E-ISSN

18732089

Publisher Statement

Copyright © 2017 Elsevier Ltd. Access to external full text or publisher's version may require subscription.

Additional Information

Paper presented at the 19th World Conference of the Air-Transport-Research-Society (ATRS), Jul 02-05, 2015, Singapore.

Full-text Version

Publisher’s Version

Recommended Citation

Yuen, A. C. L., Lei, Z., Chow, C. K. W., & Fung, M. K. Y. (2017). Could market power explain hub premiums? Journal of Air Transport Management, 64(A), 55-59. doi: 10.1016/j.jairtraman.2017.06.024

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