Dormant authority is a provision in the Airline Deregulation Act which allows carriers to submit applications or notices to the reactive service or for the unused authority of other airlines on routes in which they have failed to provide their services. Hence, the dormant authority program was designed to reduce the legal barriers to entry into airline pairs, and provide time for existing airlines to adjust to the changing economic environment (Arndt, & Knorr, 2017). Airline scheduling is the approach of developing system-wide flight patterns that enhance optimum public airline services in both quality and quantity, and consistent with the financial wellbeing of the carrier.
Dormant authority impacts on airlines revenues because it tends to increase the route destination with more passenger’s and flights according to their route structure to determine their cost and revenue (Button, 2017). Similarly, it is not possible to directly estimate expected profits on an individual route segment because the information is not available. However, it is possible to evaluate carriers that have attempted entry to determine whether the failed or succeeded (Lowe, & Hughes, 2017). Thus, airline managers can learn what is essential to their overall profitability by observing the criteria that are crucial to carriers as they make their marginal moves.
The hub-and-spokes system was developed to converge traffic to a major airport-primarily a central hub from smaller regional and national airports, and transport the passengers to another central hub (Arndt, & Knorr, 2017). Advantages of the hub-and-spoke system include;
Encouraging rapid growth and development of the airlines business, and the efficient utilization of the available resources. Conversely, the hub-and-spoke has its disadvantages in that it builds delays and congestions in the major hubs, discontinues the use of other airport facilities, and develops airport dependency.
Arndt, A., & Knorr, A. (2017). Successful Entry Strategies on the Deregulated US Domestic Market: the Case of Southwest Airlines.
Button, K. (2017). Airline deregulation: international experiences. Routledge.
Lowe, S., & Hughes, D. (2017). Regulating a Deregulated Market. In The Private Rented Housing Market (pp. 157-168). Routledge.