ABSTRACT
This chapter provides the major components of network-planning models and contrast two major types of market share models one based on the quality of service index (QSI) methodology and the second based on logit methodologies. It illustrates modeling process that is used to develop a well-specified utility function and relax restrictive substitution patterns associated with the multinomial logit (MNL) model. One of the simplest relaxations of the MNL model is the NL model. The three-level nested logit (NL) model indicates that itineraries that share the same operating carrier and departure time category compete most with each other, followed by those itineraries in the same departure time period. Results of the NL and ordered generalized extreme value (OGEV) models indicate that they fit the data better than the MNL model. The chapter overviews major components of network-planning models, provide information on quarterly airport-pair average fares averaged across all classes of service and times of day for each airline serving the airport-pair.
