Abstract:

The airline network is not only an important strategic resource for airlines， but also a key national infrastructure. The choice and construction of the network model will affect the operational efficiency and quality of the civil aviation industry. A three-stage non-cooperative game model for airline network selection is constructed. If the airlinei adopts the hub-and-spoke network， the second-stage capacity game model and the third-stage quantitative game model are： {\Pi }_i=\mathrm{m}\mathrm{a}\mathrm{x}\left(E{\pi }_i-\mathrm{2}{c}_h{n}_i{K}_i\right)、{\pi }_i=\mathrm{m}\mathrm{a}\mathrm{x}{\displaystyle \sum _{y=\mathrm{1}}^{\mathrm{2}}}y{q}_{yi}\left[M_y-\left(q_{yi}+q_{yj}\right)\right]\text{?}. If the airlineiadopts the point-to-point network， the second-stage capacity game model and the third-stage quantitative game model are： {\Pi }_i=\mathrm{m}\mathrm{a}\mathrm{x}\left(E{\pi }_i-c_p{\displaystyle \sum _{y=\mathrm{1}}^{\mathrm{2}}}y{q}_{yi}\right)、{\pi }_i=\mathrm{m}\mathrm{a}\mathrm{x}{\displaystyle \sum _{y=\mathrm{1}}^{\mathrm{2}}}y{q}_{yi}\left[M_y-\left(q_{yi}+q_{yj}\right)\right]， where {\Pi }_i and {\pi }_i represent the profits of the second stage capacity game and the third stage quantity game respectively. Based on the three hypotheses in this paper， the Stackelberg dynamic game theory is used to solve the problem， and the uncertainty effect， cost effect and market scale effect of game equilibrium are discussed deeply. It is found that： firstly， market uncertainty provides great flexibility value for the hub-and-spoke network， but competition will cause a certain degree of loss to it. When the degree of uncertainty exceeds a certain limit， new entrants tend to adopt the hub-and-spoke network. Secondly， under the assumption of the symmetry of the local market， the size of the local market will not affect the equilibrium result of the network game. When the connecting market scale is large enough， even if the market has strong uncertainty， new entrants still tend to use point-to-point networks. Thirdly， the best network decision for new entrants is essentially a tradeoff between the value of flexibility and cost advantage. When the unit capacity cost is low， the new entrants tend to obtain the flexibility value， when the unit capacity cost is high， the new entrants will adopt different network strategies， and the two companies enjoy flexibility value and cost advantages respectively. In most cases， this equilibrium tends to be socially optimal. It concludes with a numerical simulation of the theoretical results and the corresponding management insights in this article.

Key words: airline, network structure, dynamic game, market uncertainty, flexibility value