Operational efficiency of Southwest Airlines' point-to-point model compared to Delta Air Lines' hub-and-spoke model within the domestic US market

Accordingly, this thesis evaluates the operational efficiency of the point-to-point (P2P) model of Southwest Airlines against the hub-and-spoke (H&S) model of Delta Air Lines in the US domestic market from the perspective of economic theory. Using metrics like CASM, aircraft utilization, and turnaround times, the unique cost structures, resource allocation, and market dynamics that drive these two models are deconstructed in the study. The P2P model drives through price-sensitive short-haul markets with cost advantages and flexibility. In contrast, the H&S model operates hub-centric long-haul routes that benefit from economies of scale and scope — all uniquely verified by regression analysis using empirical data from the Bureau of Transportation Statistics and financial reports. The emerging evidence delineates the economic costs and benefits of network density, cost rationale, and market efficiency, providing significant guidance on designing airline systems in competitors' and resource-constrained markets.