Optimizing capacitated hub-and-spoke airline network under disruption

Abstract

This paper addresses the capacitated hub-and-spoke airline network design problem under disruption. Specifically, this paper extends the classical hub-and-spoke airline network design problem by considering hub (airport) capacity and various disruption risks. In particular, this paper proposes a backup hub strategy to protect the designed airline network against the disruption risk. This paper formulates a mixed-integer nonlinear programming (MINLP) model for the considered problem for minimizing the sum of the construction cost of the backup hubs and the expected total transportation cost of the new airline network formed by backup hubs after disruption. Through a series of numerical experiments based on a simulated example, this paper verifies the practical value for the capacity constraints of the hub airports to enhance the ex-ante resilience. This paper also conducts sensitivity analysis on inter-hub discount factor and probability of hub disruption to provide managerial implications for airline company.