A Study Of Hub-and-spoke Route Network Design With Market Subsidy Providers

At the important developing stage of China's civil aviation,Civil Aviation Administrator of China(called as CAAC for simplicity)releases the developing strategy called as One-Two-Three-Three-Four,in which designing a high-quality route network is put into a high position.For decades,routes developed in domestic among airlines are always with high homogeneity.Moreover,there exists a large quantity of potential emerging routes to develop.Therefore,determining how to construct a better route network scheme in this new situation is an airline that may have to face with.In addition,with the deep implementation of airport localization policy,local governments throw more and more funds into route development activities.In this situation,both median-and-small and large airports obtain more and more government's funds.Under the influence of subsidy funds,airlines urgently need theoretical support on determining how to build hub airline network scientifically in response to the CAAC's call.Therefore,this paper presents the problem of hub-and-spoke route network design with the participation of market subsidy providers,which builds a bi-level planning model to construct a hub-and-spoke route network model with objective of providing some theoretical guidance to these airlines.The main contents of this paper are as follows:(1)By hackling the domestic and foreign literature of hub-and-spoke route network design,the paper summarizes the development process of hub-and-spoke route network.In this case,the shortcomings of the original Campbell model within hub capacity situation for hub-and-spoke route network are summarized and then improved by adding the responding constraints.It is found that the proposed model can improve the shortcomings of the original model through the analysis of examples.Its feasibility is also proved;(2)Based on the improved Campbell model,relaxing the basic assumption that only one airline is considered as the unique decision-maker,this paper constructs a bi-level mathematical programming model in which both the airline and market subsidy providers are treated as decision-makers.The upper decision maker is the airline who determines several locations of hub airports,all selections of O&D passenger flows' itineraries as well as the subsidy schemes of aviation markets.Then an upper level model of the strict hub-and-spoke route network formulation from an airline's perspective is constructed.In addition,the market subsidy providers are regarded as decision-makers in a lower level model with the objective of maximizing the passenger flow of each aviation transportation airport.Then a model of the strict hub-and-spoke route network with the participation of market subsidy providers is constructed.The validation is conducted using the data of 24 domestic cities in 2016;(3)Further Relaxing the assumption of O&D passenger flows' itineraries being strictly transferred through hubs.It is indicated that O&D passenger flows' itineraries between non-hub nodes could not only transit through hubs,but also could be transported directly.Based on this assumption,the model of non-strict hub-and-spoke route network with the participation of market subsidy providers is constructed.The Airline on upper level determines non-strict hub-and-spoke route network scheme and market subsidy providers on upper level make decisions on the corresponding subsidy schemes of aviation markets.The feasibility of the model is verified by an example analysis.