Several airline consolidation events have recently been completed both in Europe and in the United States. The model we develop considers two airlines operating hub-and-spoke networks, using different hubs to connect the same spoke airports. We assume the airlines to be vertically...

We extend the monopoly case without congestion in Brueckner (2004) by examining network choice in a duopoly where airport congestion can occur. Airlines prefer hub-and-spoke configurations, even if this implies higher congestion costs. Airlines may be inefficiently biased towards hub-and-spoke...