*Names in bold indicate Presenter
A Case Study
Since the United States' 1978 Airline Deregulation Act, the legacy commercial air transport industry followed two significant and interdependent trends: hub-and-spoke network operations and air carrier consolidation. However, as airlines merge operations through consolidation, they rationalize routes, aircraft fleet and facilities to maximize efficiency and reduce costs. This includes abandoning redundant hub airports. This paper develops research to examine the question; What is the regional impact of hub abandonment due to airline consolidation? The working hypothesis is that hub abandonment adversely impacts regional economies. The alternate hypothesis is that hub abandonment removes barriers to entry and allows new entrants to have a contravening positive influence on regional economies. The null hypothesis is that hub abandonment does not negatively or positively impact regional economies.
This paper develops a case study analysis of two abandoned airlines hubs, Pittsburgh International Airport and Lambert-Saint Louis International Airport, contrasted with two viable airline hubs, Minneapolis-Saint Paul International Airport and Charlotte/Douglas International Airport. The period of analysis is 2000 through 2012 and utilizes three methods: input-output model, fixed-effects panel analysis and econometric comparison. A unique dataset is created from sources including airline passengers, air carrier flights, airport operations, air transport employment and regional gross domestic product. Further, the paper develops recommendations for airport operators and regional planners to understand and predict the economic impact of hub abandonment and develop policies to mitigate or leverage the regional impact.
