Airline hub-and-spoke network design based on airport capacity envelope curve: A practical view

In this study, a new practical airline hub location model with hub capacity decision is presented based on airport capacity envelope functions. In the literature on hub location with the hub capacity decision, the capacity of hub nodes has been expressed as a constant. In real-life air network, airport capacity is expressed as some functions of arrival and departure of flights according to the functions of airport capacity envelope curve. Therefore, to make the mathematical models of Hub Location Problem (HLP) compatible with the reality, the hub capacity was considered as a function of arrival and departure of flights based on the hub capacity envelope curve. Also, this study is the first to consider the possibility of direct trip between two non-hub nodes together with hub capacity decision problem in a multiple allocation model. The presented model is solved exactly for some small-scale versions of Iranian airline network and compared to a hub capacity model with a constant capacity decision. The capacity of Iranian airports is calculated based on flight statistics reported in 2015. For each hub airport, three scenarios are considered to gain 30%, 60% and 90% airport capacity from the perspective of the airline. Also, to solve the proposed model at a large scale, an Adaptive Large Neighborhood Search (ALNS) with some new removal and insertion moves is proposed and applied to a large-scale version of Iranian airline network. The results showed that disregard for the airport capacity envelope curve can increase the airline operational costs and lead to the design of a non-optimal Hub and Spoke (HS) network. Accordingly, some recommendations based on the results are presented for this real network.