Development of a Model for Locating Hubs in a Competitive Environment under Uncertainty: A Robust Optimization Approach

This article explores the development of previous models to determine hubs in a competitive environment. In this paper, by comparing parameters of the ticket price, travel time and the service quality of hub airports, airline hubs are divided into six categories. The degree of importance of travel time and travel cost are determined by a multivariate Lagrange interpolation method, which can play an important role in allocating travelers to follower airline hubs. Then, based on the seasonal demand of travelers, we consider travel demand as uncertain parameters. To determine the robust counterpart of this category of hub location models, a robust optimization method is used. Finally, models are tested in a case study. The central results show that the follower airline's income has a considerable growth and can absorb nearly 2% of travelers of the leader airline due to lower travel costs and travel time compared to that of leader airline.