Reliability analysis of network design for a hub-and-spoke air cargo network

Abstract

This study develops a series of models for designing an air cargo network, including flight frequencies, aircraft types and routes, that minimises the total logistics cost. The time value of cargo, economies of scale, and route distance are considered in the hub-and-spoke network design. We calculate the boundaries of the type of aircraft to be used and the route selection, thereby providing airlines with efficient decision-making tools to respond to variations in both the cargo flow and the distance of a route. In addition, this study analyses how fluctuations in demand affect the optimal network design, and evaluates its reliability. The evaluation results show that due to flow consolidation of a hub-and-spoke system, the impact of demand fluctuations can be intensified. Airlines adopting a hub-and-spoke system ought to plan their routes and flights with sufficient flexibility in order to respond to sudden events.