Stop Traffic From Other Hubs And Airlines example essay topic

Since the 1940's, the rate of airline accidents in the United States has been declining. Following the introduction of jet aircraft in the late 1950's, such as the Boeing 707, this long-term decline in the accident rate accelerated. By the late 1980's, only a small number of airline accidents occurred each year, and as a result, the rate of decline has slowed in recent years. In addition, the overall accident rate for commuter carriers has declined by 90% over the last two decades, largely due to more advanced aircraft technology and better pilot training. However, an increase of just one or two accidents in a given year can cause a significant fluctuation in accident rates. It is true that turboprops do not have as good a safety record as the larger jets they replaced in many markets serving small- and medium-sized communities.

This fluctuation in accident rates makes it difficult to discern any impact of the increasing use of turboprops on relative safety between airport sizes. The deregulation of the airline industry has meant that the airlines now control decision making with regard to service entry and exit, pricing, bankruptcies, and to a lesser extent mergers and acquisitions. Changes in these aspects of the airline industry will be manifested in physical distance differences in the levels of market concentration, employment, service frequencies, enplaned passengers, and fares. By removing regulatory restraints, the airline should reveal dramatic and exaggerated spatial impacts as a direct result of the sudden shift in decision making and control away from regulatory agencies to individual firms, and to the greater likelihood of monopolistic behavior. Under deregulation, carriers have been able to set up operations wherever they deem most appropriate. One of the clearest geographic effects of this change has been the domination of one airline over passenger air transportation in domestic hub centers.

Between 1978 and 1993, every domestic hub core except Cleveland experienced an increase in single carrier concentration. In 12 of the 22 hub cores as of 1992, one carrier accounted for more than 60 percent of their traffic, and 9 hubs. These high levels of concentration at hub cores reflect the increases in both hub-and-spoke operations and industrial consolidation. Once entry and exit regulations were removed and carriers adopted hub-based networks, carriers concentrated traffic, personnel, and infrastructure at key points in their systems. The development of "fortress hubs", cities where no other carriers were able to establish beachheads of operation, emerged as a key strategy for major airlines facing competitive threats from new entrants into the industry. To the American traveling public, the hub and spoke system is as much a way of life as fast food.

It has become an almost unquestioned way of traveling; the airlines argue that the system offers convenience and access to city-pairs that might not otherwise be viable markets. To the major US carriers, hub and spoke operation offers not just convenience, but also control. An airline can focus its routes and maintenance operations on its chosen hub airports at the same time as greatly multiplying the number of cities and people it serves. A good hub and spoke operation feeds itself by capturing nearly all of the local market and diverting one-stop traffic from other hubs and airlines. Given that the majors have closed down their smaller hub operations and become entrenched in a few major hubs, most of them are now relying heavily on these so-called fortress hubs for their future prosperity. But the General Accounting Office is recommending regulatory action to curb hub power, in a report, which brands the hub-and-spoke system as anti-competitive, saying that it is one of the main barriers to competition in several key domestic markets.

Moreover, the congressional watchdog points out that at major airports where one carrier accounts for more than 75 per cent of embarkations, fares tend to be higher. In a study of the 43 airports falling under the Federal Aviation Administration's 'large hub' classification, the GAO found fares to be generally 'much higher' in 1995 at the ten airports which are either affected by operational constraints or where one airline accounts for the vast majority of emplacements.