Evolutionary analysis of airline networks under different airport-provided subsidy regimes in the context of multiple airport systems

Abstract

To determine the evolutionary trajectory of airline network selection under different airport-provided subsidy regimes in the context of multiple airport systems (MAS), we construct an evolutionary game model consisting of airports and airlines as the two involved parties and explore the evolutionary stable strategies (ESS) of both players under different scenarios, the factors influencing the evolutionary path of the stability strategies are also analyzed. The results show that: (1) ESS of airports is the low subsidy strategy, and airlines may evolve into the hub-spoke network or the point-to-point network. (2) From the perspective of total social welfare, it is preferable for airlines to choose the hub-spoke network. (3) Lower expected subsidies from non-hub airports and higher route fixed costs strongly encourage airlines to converge towards the hub-spoke network strategy as their stable equilibrium. (4) The increase in passenger demand in the MAS can encourage airports to choose the low subsidy strategy, and the increase of passenger demand served by non-hub airports has a dampening effect on the evolution equilibrium toward the hub-spoke network strategy. This study provides valuable insights for improving the airport-provided subsidy regimes of the aviation market and optimizing the development of the airline network.