Blame Frequent Flyer Programs for "Hub Premium"

Or at least a portion of it. Prof. Lara Lederman, a researcher at the Rotman School of Business, estimates that "FFPs account for between 25% and 37% of the fare premium that hub carriers receive.'". Her research methodology examined the relationship between frequent flyer partnerships and fares in order to isolate the FFP component of the hub premium: If a non-hub carrier becomes a frequent flyer partner of the hub carrier, can it now charge a premium since it is more lucrative, FFP-wise? The short answer is yes. For the long story, read the recently published paper. The research is based on rather old data - remember when US Airways and American Airlines were still partners? - so it would certainly be fascinating to try and figure out if, and how, things have changed since then.