A COMPARISON OF HUB-AND-SPOKE AND POINT-TO-POINT SYSTEMS

The disparity between the relative success of low-cost and network carriers since 2001 has often been attributed to the difference in route system architecture. This paper compares the economic and operational characteristics of point-to-point and hub-and-spoke route systems. It also argues that the emphasis placed on route structure obscures other differences in business models. Although U.S. low-cost-carriers are frequently characterized as operating point-to-point systems, few actually do so. As network airlines simplify their domestic products and the low-cost-carriers diversify theirs, the distinction between the two is rapidly fading