Abstract: In hub-and-spoke airline networks, the routes of transit airlines are lengthened, leading to the reduction of customers. Thus, when hub-and-spoke networks are designed, trade-off should be made between the saving of transportation cost and customer reduction. To do so, a new network design method is presented in this paper by integrating the transportation distribution gravity model and p-hub median problem. In so doing, a mathematic optimization model is developed to maximize the social total net welfare. To validate the proposed method, as a case problem, the hub-and-spoke networks connecting fifteen cities in China are constructed with different parameters. With the networks, numerical analysis is carried out. Results show the effectiveness of the proposed method. Thus, the method can be used as assistant in decision making on hub-and-spoke airline network design and application.

Key words: hub, hub-and-spoke network, gravity model, trunk network, feeder network