IntroductionThe Airline Deregulation Act was signed into law in 1978 and allowed for the deregulation of the airline industry, eliminating restrictions on where flying was permitted (Smithsonian National Air and Space Museum, 2007). This also allowed airlines to be competitive, so they needed new ways of operating to provide the services travelers were looking for when choosing an airline. One innovation introduced by major airlines in the early 1980s that collectively represented a radical change from the regulatory era was the hub-and-spoke system (Wensveen, 2007). This paper will discuss what the airline hub-and-spoke system is and how it works. It will also discuss the advantages and disadvantages as well as the economic effects it has on airlines. Hub-and-Spoke System ExplainedThe hub-and-spoke system or network is a system that feeds air traffic from small communities through larger communities to the traveler's destination via connections to the larger community (Wensveen, 2007). The airline will carry out most of its operations in the larger communities that the airline will call its hub. Small communities are the spokes of the network and are connected to the hub by non-stop flights between different spokes (Aguirregabiria & Ho, 2010). For example, a person wanting to travel from Louis Armstrong International Airport in New Orleans, which is considered a "talk" city, to San Antonio International Airport on United Airlines will have to travel to George Bush Intercontinental Airport in Houston and change plane since Houston is a hub city for United Airlines. Many travelers would wonder why it shouldn't be a direct flight to their destination... half of the paper... NJ, Mumayiz, S.A., & Wright, PH (2011). Airport Engineering: Planning, Design and Development of 21st Century Airports (4th ed.). Hoboken, New Jersey: John Wiley & Sons, Inc. Retrieved from http://books.google.co.uk/books?id=bJR3c4HZ1uMC&printsec=frontcover&dq=airport+engineering&hl=en&sa=X&ei=4O9uT82dIoP_8QOvys2_DQ&ved=0CD4Q6AEwAA#v=onepage&q= airport%20engineering&f=falseBuchanan, P., & Siraut, J. (2009). Economic impacts of hub airports. London: British Chambers of Commerce. Retrieved from http://www.thamesvalleychamber.co.uk/uploads/EcomonicImpactsofHub_Airports_Jul09.pdfSmithsonian National Air and Space Museum. (2007). Deregulation: a watershed event. Retrieved from America By Air: www.nasm.si.edu/americabyair/jetage/jetage08.cfmWensveen, J. G. (2007). Air Transport A Management Perspective (6th ed.). Burlington: Ashgate Publishing House.