Capacity Discipline and the Consolidation of Airport Connectivity in the United States

Abstract

Airlines reduced available domestic capacity at airports across the United States from 2007 to 2012 in response to a global economic downturn and high and volatile fuel prices. More recently, despite an economic recovery and more stable fuel prices, airlines have continued to keep capacity low relative to historical levels in a strategy that has been referred to as “capacity discipline.” The effects of these shifts in capacity on airport connectivity to the global air transportation network remain unclear. This paper introduces an intuitive index to compute airport connectivity as a function of both the quantity and quality of scheduled nonstop and connecting service. Connectivity scores were computed for 462 U.S. airports; medium-hub and small-hub airports were found to have lost more connectivity on average than large-hub airports from 2007 to 2012. In multiairport regions, losses in connectivity at secondary and tertiary airports outpaced losses at primary airports. With lower levels of connectivity, smaller airports in these regions will need to employ creative strategies to prevent passengers from leaking to primary hubs. Whether these airports can recover from connectivity consolidation will also depend on how long the capacity discipline equilibrium remains in effect among U.S. airlines.