A regional partner airline under contract to the FSNC serves some small cities close to the FSNC's hub with regional jets that have much higher seat-mile-costs (CASM) than larger mainline jets. The average fare from these cities to the hub does not cover the fully allocated cost.Is this economically rational?

Networks are subject to negative externalities.How might such externalities affect a network carrier's decision to add another spoke city to its network?Explain.

Answer rating: 100% (QA)

No it is not economically rational for the regional partner airline to continue serving these cities ... View the full answer