Hub and Spoke and Direct Airline Routing Systems

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Table of Contents

Introduction
Relevant Theories
Event Description
Theory Selection
Theory Evaluation
Critique
Conclusion
References

Introduction

An exploration into the dynamic approaches regarding the operational hub and spoke and direct routing systems renders an in-depth insight into airlines’ business strategies. The contrast significantly contributes to an understanding based on competence outliers that airlines utilize to increase the profit pool while integrating with an essence of sustainability. Air transportation system involves an interplay of different processes that encompass communicating the networking routes based on convenience and an airline’s main objectives. While the hub and spoke routing system improves the connectivity of airlines and passengers across the country, the point-to-point airport routing system provides an eco-friendly but less profitable business operational mainframe.

Relevant Theories

Different theoretical foundations support the ideological concept concerning the margin between the hub and spoke and direct routing systems. According to Yirgu and Kim (2021), there is an increase in passenger leakage from small to large airports. The main reason encapsulates convenience based on costs and eco-friendliness. Yirgu and Kim (2021) further argue that despite small airports offering direct routing systems for passengers, there are lesser offer services and a reliability quotient. Small-scale airlines focus on maximizing profit margin hence compromising the customers’ satisfaction quotient. On the other hand, large airports and airlines optimally prioritize the client’s loyalty and satisfaction. As a result, large airports and airlines deliver competent services. In this case, Yirgu and Kim (2021) agree that the hub and spoke routing system renders a higher quotient on air transportation services to clients than the direct routing system mainly used by small-scale airports and airlines. An elaborate network system in the air transportation industry fosters intensified safety and reliability regarding the quality of services.

Over the decades, the corporate market experienced a paradigm shift concerning consumer behavioral moiety. In the research by Pels (2021), the scholar indicates that the hub and spoke and direct routing networks pose dynamic effects on the environment. One of the consequences involves the expansive essence of the operations by the hub and spoke routing structure. The system focuses on the intensification of air transport operations hence the bulk movement of the airplanes across the American air space while prioritizing the needs of the indirect over the direct passengers. The initiative is unsustainable based on the increased costs of reducing environmental pollution. The hub and spoke system fosters a solution regarding profit maximization while offsetting the expenses in an attempt to reduce environmental pollution. Therefore, Pels (2021) depicts that the direct routing network is an advocate for environmental sustainability due to limited air transportation operations despite the incurrence of high managerial costs. Primarily, the increase in airports to intensify functionality of the hub and spoke network leads to an amplification of environmental resource exploitation.

Event Description

Air transportation operations involve the coordination of the different airlines and airports hence the importance of an intensified communication and networking system. Pels (2021) postulates that ineffective management of the hub and spoke risks significant negative impacts, such as discordance and accidents. Professionals operating the hubs and spoke prioritize indirect passengers over direct passengers mainly because of the higher revenue margin. Therefore, Yirgu and Kim (2021) establish that the key advantage of a direct routing system involves reduced regional operations hence lesser environmental impact. However, a significant percentage of airlines and airports utilize the hub and spoke based on the accrued dynamic benefits. The comparative compound between the hub and spoke and direct routing systems is a framework encompassing an intersection of environmental sustainability, business profit maximization, and customer satisfaction quotient.

Theory Selection

One of the global topical issues involves the implementation of capitalistic ideologies with conservative environmental resource exploitation. After the onset of the COVID-19 pandemic, the American government initiated lockdown and restriction of movement. In this case, Bouwer et al. (2020) argue that the event caused a profound decrease in the volume of air transport activities. Despite the generalized impact, the hub and spoke structure encountered a profound challenge due to the reduced volume of travelers. The hub system functions based on a banking structure, therefore, the reduced number of indirect passengers risks the incurrence of losses for the airlines. As a result, Bouwer et al. (2020) indicate that it is the responsibility of the managerial team to implement policies that improve the sustenance of the hub and spoke routing structure. However, the direct routing system proved profitable and sustainable during the COVID-19 pandemic due to the convenience and lesser operational necessities. The theoretical construct on the preferential baseline of the hub and spoke than the direct routing system fosters an apt insight into the sustenance of modern business strategy.

Theory Evaluation

Technological advancement triggered a profound paradigm shift in the consumer market and behavioral perspective. In this case, Debbage and Debbage (2019) stipulate that consumers affiliate with institutions promoting environmental sustainability. However, there is a major controversy regarding the contrast between the hub and spoke and the direct routing system in air transportation operations. On the one hand, the hub and spoke ensure an optimal trickle-down effect due to the distribution of activities across different regions. Debbage and Debbage (2019) depict that the core foundation of the hub enshrines elevating the accessibility of different and diverse tourist destinations across the U.S. However, in different research by Pels (2021), the optimality of the hub poses a significant environmental threat. As a result, different stakeholders in the air transportation industry must invest in modern technology that reduces gas emissions and disruptions of the environment’s biodiversity. Ideally, the hub and spoke routing system is an emblem of improving tourism operations due to the profound accessibility quotient to different regions.

Critique

The topical issue concerning the exploration of the hub and spoke and direct routing system engulfs the intersection of recommended guidelines and the determination of effective implementation procedures. Despite the derivation of major insights regarding the operationalization of the different network structures, there is minimal criticism of stakeholders’ involvement. It is recommended that further research focuses on the utilization of technology to boost different entities’ involvement in the advancement of operations. The core mandate of the corporate sector encompasses implementing project strategies that enhance intensified accrued benefits on environmental resource exploitation. Therefore, the study is limited to the comparative baseline of the two systems against the remedied framework on sustainability. The limitations of the observation involve an evaluation of respondents’ overviews concerning the issues of air transportation activities. However, it is recommended that further research explores the dynamism of international operations and the impact on routing systems.

Conclusion

In conclusion, the hub and spoke routing system poses a significant positive impact than the direct routing system in the American air transportation industry. The main reason involves the advocacy for optimal trickle-down effects. A significant percentage of passengers access different regions for business and tourism purposes. As a result, the increased cash flow across different areas attributes to the growth and development of the remote areas. However, the intensified and distributed air transportation activities contribute to the overexploitation of environmental resources including elevated air pollution. Therefore, it is the responsibility of the dynamic stakeholders to establish initiatives to ensure the establishment of effective solutions. Direct routing system, on the contrary, fosters minimal environmental pollution due to lesser disturbance despite the reduced profit margin and opportunities to corporate entities and remote communities.

References

Bouwer, J., Krishnan, V., & Saxon, S. (2020). Will airline hubs recover from COVID-19. McKinsey & Company.

Debbage, K. G., & Debbage, N. (2019). Aviation carbon emissions, route choice and tourist destinations: Are non-stop routes a remedy?. Annals of Tourism Research, 79.

Pels, E. (2021). Optimality of the hub-spoke system: A review of the literature, and directions for future research. Transport Policy, 104, A1-A10.

Yirgu, K. W., & Kim, A. M. (2021). Aviation fuel and emissions in air markets with interregional passenger leakage. Transportation Research Part D: Transport and Environment, 101, 103092.

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