FlightCaster -
Contributors



March 8, 2010

JetBlue asks for rule waiver, effectively announcing plans to keep passengers on tarmac for 3+ hours

Well, at least they're letting us know in advance! If you're flying JetBlue out of JFK this spring, plan on extended tarmac delays.

As I mentioned last week, JetBlue has asked the DOT for a waiver of the 3-hour tarmac rule until the construction on JFK's runway 31L/13R is complete (or Dec. 1, whichever is sooner. Odd timing given the construction is supposed to be done in June. Surely that shows a lack of confidence in the Port Authority's ability to finish the project on-time!)

The rule is supposed to go into effect April 29, but JetBlue is stating that the unusual circumstances of the runway closure would put far more inconvenience on its customers if planes had to turn back at 3-hours.

What's next? Exemption from the rule when it's snowing. Or when it's raining. Or between the hours of 5 and 8pm. Or whenever your flight is behind an Air France 747?

C'mon JetBlue. It's simple -- you either can handle the operational impact of the 3-hour rule, or you can't. The amount of disruption the runway closure is causing  mimics the type of problems you see in storms or other operational disruptions. Yes, it might happen more often this spring, and perhaps we will have a few terrible days when the perfect storm forms. But asking for an exemption now is tantamount to telling your passengers you intend for them to sit on the tarmac and you feel you don't have to do anything about it because, well, one of the four runways is closed.

The fatal flaw of this logic is that the 3+ hour rule is not about JetBlue, JFK, or flight operations. It's about passengers. Plain and simple. Should passengers have to sit on the plane for more than 3-hours without going anywhere? If the answer is "no", then abide by the rule. if the answer is "yes, sometimes", then get rid of the rule entirely. An exemption is simply an admission that the rule doesn't make sense and a prayer that this will at the very least delay the pain of implementing it.

Additionally, tarmac delays are a combination of departure and arrival airport congestion. Many times you sit on the tarmac not because you can't depart, but because you don't have clearance to proceed to your destination. For JFK, they are handling the arrivals. vs. departures capacity extra carefully during this period to prevent major back-ups whenever possible. Surely that will mean extra delays when spring thunderstorms arrive, and likely some of those tarmac delays will be 3+ hours. But if JetBlue can't stand the heat this spring, when will they?

As I've said before on this blog, I'm not a fan of this rule. I think it's arbitrary and it forces your hand despite what may actually be best for passengers. But airlines have demonstrated they can't handle self-regulation when it comes to certain passenger experiences like tarmac delays. Time to deal with the consequences -- waiving enforcement when it's most critical is just silly. That's like saying you're more than happy to pay for parking after 6pm when the parking meter is shut off. It defeats the purpose.

If the DOT goes along with this (which they very well might), I can tell you I'll be packing snacks and DVDs when flying out of JFK this spring.

Loading mentions Retweet
Posted by Evan 

Comments [0]

March 5, 2010

Yet another reason to avoid regionals: When the going gets tough, Continental throws ExpressJet under the bus

Continuing on the theme of pulling interesting insights out of the otherwise bland on-time performance data set, I set upon the task of assessing regionals in comparison to their parent mainline carrier.

In the first of these comparisons, I decided to focus on Continental vs. ExpressJet.

I chose these two since Continental was in the middle of the pack for on-time performance in 2009 (overall ranked 10 out of 19 reported carriers, and 4 out of 6 of major network carriers). With hubs in Newark, Cleveland, and Houston, they have a national scope. Also, ExpressJet is a regional that only flies for them, making the comparison cleaner. Finally, they are the dominant carrier at Newark, a delay-plagued hub. This allows us to use Newark for part of this comparison, ideally exaggerating some of the mainline vs. regional differences.

To that end, I compared Continental and ExpressJet in two ways:

1) On all routes they both fly. This would include any route anywhere in the country (domestically) where there is both mainline and regional service by Continental. This would be an apples-to-applies comparison of who performs better with the same constraints.

2) On all routes into or out of Newark. While the destination or origin mix is going to be different for the two, this is an insightful comparison since most constraints will come from Newark itself. It should give us a view into how Continental handles traffic at Newark hub, producing some interesting comparisons.

I acknowledge one thing this analysis ignores is stage length. The length of a flight does impact its timeliness (more analysis on that to come soon!) since ground stops and ground delay programs are in effect for various distances and the further the departure city, the more likely the plane will already be in the air when decisions are made to delay or cancel flights due to congestion. That being said, I believe that is a relatively minor impact on the results, especially given Continental has the right to swap slots between its flights to prioritize as much as it sees fit.

Okay, enough of a preface -- the results: Continental mainline is BY FAR your best bet for on-time arrivals!

Surprising? Not at all. But just how big the difference is, especially at Newark, is startling.

First, for like-routes (nationwide), the difference is modest.

For all of 2009, on-time performance on like routes was:
80.0% for Continental
77.8% for ExpressJet

Continental beat ExpressJet every quarter and 8 out of the 12 months in 2009.
The biggest gap was in December, when Continental was up by 8.1 pts.
When ExpressJet won (Jun, Jul, Aug, and Nov), it was always very close.

However, when you're flying into or out of Newark, the story is very different.

For all of 2009, on-time performance for domestic flights into or out of Newark:
71.8% for Continental
64.9% for ExpressJet

That's a 6.9 pt. difference. Continental won every month and every quarter.
The biggest gap was in May, with a 13.3 pt. advantage. Huge!
To give you an example of how big that is -- it's the span between nearly the best and worst airlines in 2009.
Taking Hawaiian out of the mix, the span between best and worst is 14 pts.

This gives you an idea of how poor on-time performance stats are used today since they ignore the impact of regional carriers, yet at the same time, allow airlines to brag about their on-time performance relative to their peers.

But that's not the most compelling part of this analysis. How about if we look at cancellations and diversions --
Now we're looking purely at Continental discretion -- when they decide to cancel flights vs. trying to get them to arrive.
Diversions also potentially speak of discretion, as Continental controls so much of Newark's operations (~75%), they get to dictate who makes it in and who doesn't to a certain extent.

For all like-routes nationwide, the cancellations + diversion rate was:
1.0% for Continental
2.1% for ExpressJet
That means you have double the chance of being cancelled or diverted on ExpressJet as on Continental (albeit the number is still low).

For Newark routes, again we see startling results:
1.2% for Continental
3.9% for ExpressJet
That's a 3.8x upswing for ExpressJet.

If you look at that for only October, you'd see an 8x higher cancellation/diversion rate for ExpressJet as compared to Continental.
Similarly, in December, ExpressJet canceled or diverted a whopping 7.7% of flights into or out of Newark.
Continental, on the other hand, only canceled or diverted 2.1%.

And when you look at the on-time percentage and cancellation/diversion rates side-by-side, you see that much of the difference in on-time percentage comes from cancellations and diversions. So while you are slightly more likely to be late with ExpressJet (big deal? maybe, maybe not), you are MUCH more likely to be cancelled.

Why does Continental do this? (and you can easily argue this is primarily decision making by Continental). Here are some rationales for that (some good, some not as good):

1) Mainline carries more passengers on bigger planes. Simply put, bigger planes get priority when space is limited so fewer passengers are disrupted.

2) Continental wants to preserve its on-time performance as much as possible. Since the public sees only the mainline numbers, they do not hold them accountable for poor regional performance (silly outcome of the way the DOT reports data, obviously, but nevertheless true).

3) Continental bears the cost of delays associated with its mainline planes, but not nearly as much for its regional carriers. ExpressJet is responsible for the costs of flying its planes, Continental just provides revenue. Yet Continental controls the overall operation, including ground servicing and prioritizing arrival and departure slots at a hub like Newark. Incentives not aligned in this regard (note: I don't have the details of the ExpressJet / Continental contract, this is just a generalization).

4) Continental doesn't perceive issues with ExpressJet as bad as issues with Continental relative to customer service. This was apparent last summer when the ExpressJet plane got stuck overnight in Rochester, MN and Continental's first response was that it wasn't their plane. This is, by far, the worst reasoning out there. To nearly all passengers, Continental Express (operated by ExpressJet) is equivalent to Continental. When it comes to brand, there is zero difference. Perhaps Continental learned that lesson the hard way last year. This reasoning might not hold water with the folks in the operations center who influence the on-time and cancellation rates (1, 2, and 3 above likely much more), but it's worth mentioning that airlines are still struggling with how to incorporate regionals into their overall brand image and what sort of role they have on reinforcing or destroying the overall brand.

Overall, the data is clear. If arriving on-time (and arriving at all) is your priority: Avoid regionals. I imagine the data looks the same for most other hub airports as it does at Newark (although perhaps not as stark due to the poor performance of Newark overall). Unsurprisingly, Continental throws ExpressJet under the bus to preserve its own operation. Do your best to be on mainline and then you, too, can land at Newark on a rainy afternoon while the poor folks on ExpressJet wait on the tarmac for that oh so coveted arrival slot.

Loading mentions Retweet
Posted by Evan 

Comments [0]

March 4, 2010

If not by changing schedules, how DO airlines make flights more on-time?

I wanted to write a quick post to react to the ongoing debate being waged regarding the DOT rules announced last December and to be enforced at the end of April.

These are the rules that include things like:
-No tarmac delays over 3 hours
-No chronically late flights (>30 min late >50% of the time)
-Airlines must post on-time stats of flights on their web-sites

The rules were announced by the DOT in ruling OST-2007-0022, and all the fun details can be found on regulations.gov

I've also talked about it in prior posts:
DOT Speaks: Consumer Bill of Rights, sort of
and
DOT Rule Analysis: Rule definition and aim off the mark

Over the past few months since the ruling was announced, the public has had the opportunity to provide input and feedback for the DOT to consider. As part of this process, the Air Transport Association has asked for enforcement to be pushed back several months from the original April date so that airlines can have adequate time for technological implementation of providing the right data on their web-sites (sketchy rationale at best).

Similarly, I heard today that Jetbblue has specifically asked for a delayed implementation until after the JFK runway construction. I haven't seen this official release yet so I'm withholding comment, but you can expect some strong words on that over the next few days.

This post, however, is about what FlyersRights.org Executive Director Kate Hanni submitted during the public comment phase.

She specifically addresses some of the critique of the rules that airlines can simply adjust the times of their flights in order to have a better on-time performance.

In her words -- "FlyersRights.org, however, is concerned that airlines can nullify the intended purposes of the DOT regulation -- and any Congressional tightening of its requirements -- by "padding their schedules" to mask poor operating performance."

She goes on later: "increasing block time to nullify the new DOT regulation's publication of chronically delayed flights should be considered a violation of 49 U.S.C. 41712, as an unfair and deceptive practice"

Read the whole document here: FlyersRights.org input

Hold up for a second. Let's review the causes of the vast majority of flight delays: air traffic control, weather, congestion, inbound aircraft, airport issues, etc. How many of these are controlled by the airline? Essentially none of it except (theoretically) inbound aircraft. And how would one adjust for a late inbound aircraft? By adding more buffer time, or padding, into the inbound flight.

How many times do you have a plane, the weather is good, the taxiways and runways clear, and you are late just because the airline failed to dispatch the flight on-time? Sure it happens, but relatively rarely. Airlines already do all they can to prevent mechanical malfunctions since those are very costly, and any more pressure on them to dispatch planes in the face of mechanical issues would surely be a safety threat.

So what are airlines to do? The ONLY thing they CAN do is add more buffer time to flights. And whether they put that in your flight time or in the ground time before the next flight is immaterial. In fact, it's disingenuous for them to put it into the ground buffer time instead of your flight time -- it's them admitting they know your plane is going to be late often but not telling you about it. THAT would be a deceptive practice!

The root causes of delays are based on airport capacity and scheduling -- both those things fall under the domain of the FAA and airport authorities. Sure, the airlines play their part in that dysfunctional game, but to suggest they have major recourse to make their systems more on-time without adjusting flight times seems far fetched to me. I would contend that is the only way they individually can improve performance -- by setting customer expectations even lower. It's not a fix, it's just a patch, but any real fix is well beyond their control. The FAA should be the one to face the heat for chronic delays. After all, it's the government that controls the root causes of delays.

More on this in the coming days and weeks --

Loading mentions Retweet
Posted by Evan 

Comments [4]

March 2, 2010

A closer look at JFK's runway closure

A few months back, I mentioned the upcoming closing of JFK's Runway 31L-13R for a construction project.

Here's that post -- FlightCaster Blog: Watch out for JFK this spring

Well, March 1st has come and gone, and the runway is now officially closed.

How is that impacting air travel? The Middle Seat mentioned it yesterday:
Watch Out: JFK Runway Closure Being Today

Winds were high yesterday and that compounded the impact of the closed runway. Perhaps the NY Post was a little sensationalistic when it titled its article: First day of runway closure a disaster at JFK

Perhaps that claim is a bit much, but let's look at the root causes of delays and what the FAA is doing about it.
The limited runway flexibility means two things:
1) Fewer planes can land in a given hour (slower average arrival rate, or AAR)
2) Fewer planes can take-off in a given hour (slower average departure rate, or ADR).
Each morning, the FAA Air Traffic Control System Command Center (ATCSCC) produces a "JFK Daily Configuration Plan".
For today, that looks like this:
------------------------
ATCSCC  ADVZY 021 DCC 03/02/10 JFK DAILY CONFIGURATION PLAN
****CURRENT AIRPORT CONDITIONS*****
- RWY CFG: ARRIVING RUNWAY 4R/DEPARTING 4L & 31R
- AAR/ADR: 32/40
- METAR/TAF:
1251Z 07010G29KT 330V150 10SM FEW140 BKN250 04/M02 A2992
     RMK AO2 PK WND 33029/1249 SLP130 T00391017 $
TAF
KJFK 021129Z 0212/0318 33007KT P6SM SCT250 
     FM021600 VRB04KT P6SM SCT025 BKN150 
     FM022200 08008KT P6SM BKN020 OVC080 
     FM030400 05010KT P6SM OVC015 
     FM031100 02015G23KT 5SM -SN OVC015 
     FM031500 02018G28KT 5SM -RASN OVC020
- DELAYS: 
- TMI INITIATIVES: MIT
****CONFIGURATION PLAN*****
1800Z EXPECT TRANSITION TO ARRIVAL CFG 
- RWY CFG:  ARRIVING RUNWAYS 4L & 4R/DEPARTING 4L
- AAR/ADR: 44/32
- TMI INITIATIVES: MIT WITH THE POSSIBILITY OF GS
2100Z EXPECT TRANSITION TO DEPARTURE CFG 
- RWY CFG: ARRIVING RUNWAY 4R/ DEPARTING 4L & 31R
- AAR/ADR: 32/40
- TMI INITIATIVES: MIT WITH A GDP PROBABLE AFTER 21Z
021340-020259 
--------------------

How to translate this?
Here are the parts:

A) Current runway configuration. As of this report (8:42AM EST), planes were arriving runway 4R and departing 4L and 31R (using the 3 open runways). The important figure there is the AAR or ADR (Average Arrival Rate and Average Departure Rate). At this time, it was 32 and 40 respectively. Those are the most important numbers to understand relative to how flights are likely to be delayed. The lower the numbers, the fewer planes that can arrive and depart.

B) Now we have the METAR/TAF. These are current and future weather conditions. (METAR are current conditions, TAFs are forecasted conditions). It's all in code that you can translate to normal terms with the right key (Wikipedia: METAR)

C) Configurations plan: This is the key part. This is insight into what is likely to happen later today.
Here the ATCSCC is saying that at 1800z (zulu time, or GMT, 5-hours ahead of EST), they will change the configuration to arriving on the 4s and departing on 4L.

Note this allows them to switch priority to arrivals from departures (in the morning, it's more important for departures, early afternoon arrivals as all the international flights start coming in). Now the AAR/ADR is 44 and 32.

Then, at 2100z (or at 4pm EST), they switch to arriving on 4R and departing on 4L/31R. The ADR is now up to 40, with AAR at 32. Here they are prioritizing departures in the late afternoon/evening hours for the international flights that peak in the evenings.

What does all this mean?

First, you can see the FAA is micro-managing the runway configuration at JFK and what that means for flights. You'll also see "Proposed Ground Delay" programs for JFK emerge each morning. This gets airlines advanced notice of what they can expect relative to ground delay programs later on. They are also officially announcing ground delay programs hours before they take affect (not usual) since the impact of the runway closure can be anticipated (more or less, of course weather still plays a role).

Does this mean travelers will get advanced warning of runway-related delays? Probably not. The same uncertainty about ground delay programs still exists and airlines will still be hesitant to provide transparent data and information to the traveler. Perhaps as weeks go by and the impact of the runway closure becomes more habitual, then they will begin to communicate delays earlier. But even then, I'm doubtful.

As for how these figures will translate to delays -- the initial comparison is straightforward. In optimum conditions, JFK can land/depart 75 to 87 planes per hour (that's adding the AAR and ADR). The proposed capacities outlined above indicate a combined traffic of 72-76, right in line with total capacity. So what's the problem? What the numbers don't show is the reduced flexibility in arrival vs. departure volume that may cause spikes that impact those rates. Also, limited taxiway capacity due to the construction means the potential for more ground back-ups even if the runways can handle the capacity. That is why there are Ground Delay Programs in effect even when the conditions are good. The FAA needs to control the arrival flow much more closely even if the total capacity figures looks to be decent. The idea is to prevent planes from having to circle, or even worse, divert.

Finally, these are all under optimal conditions. The weather at JFK was windy yesterday and that caused some havoc. Today, the clouds have rolled in but winds are calm. Tomorrow is likely to bring some precipitation and perhaps another look into a bad weather day.
JFK is fully capable of running at near full capacity even without one of its runways. It's good to see everyone paying close attention to try to mitigate the impact, surely it takes an extra effort. But as the daily ground delay programs are showing, JFK is teetering on the edge of not being able to handle its arrival volume and that is likely going to cause problems.

All in all, we're in for a wild ride at JFK this spring. We'll keep an eye on it and see how it impacts travelers across the nation. It's going to be like this until June, so plenty of time to assess the impact in an array of weather and operational conditions.

Loading mentions Retweet
Posted by Evan 

Comments [0]

February 25, 2010

United trounces Southwest in 2009 on-time performance

No, that's not a typo. When you look at the on-time performance statistics published by the DOT for 2009, you do see Southwest solidly in 2nd place with a 83.0% on-time rating. United is in 6th place, with 81.0%.

But how is that a relevant comparison? After all, Southwest flies to a completely different mix of airports than does United. Why should a head-to-head comparison take into account things like weather and Air Traffic Control issues completely out of control of the airline?

United itself started the fight when they began advertising this: United. #1 in on-time arrivals.
They felt they deserved this recognition because they beat the other network carriers: Delta/NW, US Airways, American, and Continental.

Some critics (me included) thought this was a bit bogus, since don't they also compete with carriers like Southwest?
Brett Snyder of BNET (and Cranky Flier) agreed, and wrote it up on monday: United Most On-Time for 2009: Count Us Skeptical

How does United get to claim credit for being "#1" when they were, in fact, #6? From the customer perspective, the competitive set is any airline who is competing for your business. In that case, while Hawaiian (The perennial #1) might not be as relevant, Southwest and Alaska (#2 and #3 in the rankings) certainly are. But the customer is making the decision about flying an airline for a given route -- they don't necessarily care if United's flights to Chicago are always late if they're flying from Denver to San Francisco, right?

What if we looked at the on-time percentage of United vs. Southwest on only the routes they fly in common. Would that not help us see whose on-time performance really was superior? Similarly, we can compare United to Alaska on routes where they compete.

The results: Skepticism proved unfounded!

For all of 2009, on only routes shared between United and Southwest (~68, give or take a few depending on the month), on-time performance was:
United: 81.7%
Southwest: 77.7%

Looking at it month by month, United beat Southwest in every single month of 2009. United truly kicked Southwest's butt in on-time performance.

The tune changes when you compared United to Alaska. On-time performance on like routes (~15 give or take):
United: 79.2%
Alaska: 80.0%

But the difference is minimal. In fact, they each beat the other in 6 out of the 12 months, with Alaska taking the overall by less than 1 point.

So what does this all mean?

1) United CAN be proud of their operation for 2009. They did an exemplary job, coming close to tying one of the best performers in the industry (Alaska), and soundly beating their low-cost rival known for its on-time performance on routes where they overlap (mostly out of Denver, a hotly contested hub).

2) Like-route analysis is a far more insightful way of assessing head-to-head on-time performance between airlines. Southwest flies to lots of secondary, sunny weather airports -- hence its overall rank of #2 for 2009. But when you compare the routes it shared with United (where they face similar operational challenges relative to airport, airspace, and weather issues), the story is completely different.

There are other critiques of United's claim as well (well outlined by Brett). One being that the data doesn't include regional carriers flying under the United Express brand. Although that is likely not a big deal for this analysis since the routes United shares with Southwest are served mostly by mainline aircraft. Additionally, United's biggest regional carrier, SkyWest, finished AHEAD of it in 2009 rankings at #5 (we're not talking Atlantic Southeast or Comair here, which surely would make Delta's performance far worse than even it looks at #12).

So my apologies, United, for ever doubting you. Your press release may have been overzealous -- but the spirit was dead-on. Congrats for a fantastic 2009.

From my end -- more head-to-head analysis to come. I've long believed that the way on-time performance data is summarized for public consumption leaves a lot of insights hidden (and promotes false conclusions, as seen above). I'll continue to try to pull out interesting, relevant, and actionable insights from the 2009 data set in the coming weeks. Let me know if you have any requests of head-to-head airline comparisons or other interesting analysis.

Evan

Loading mentions Retweet
Posted by Evan 

Comments [1]

February 17, 2010

Everyone's talking about airlines canceling more flights in winter weather...the only problem is, it's not true

It seems many journalists, experts, and pundits have been talking about how airlines are being far more conservative by canceling more flights than normal this winter. I cringe every time I hear this because I have yet to see any data supporting the assumption.

I'm a big fan of data. Showing some empirical justification for a claim is generally a good thing, even in blogs and especially when the data is available. I'm not talking about phD level statistics, but some basic facts based on data to support claims would be appreciated. For my part, I like to do original analysis for this blog as often as I can. Sure, I like to share my opinions and qualitative thoughts as much as the next guy, but when it comes to empirical topics, I feel data should be a requirement.

So it was with much interest that I read all these blogs and articles about how airlines were canceling so many flights during this winter's snowstorms and at much higher rates than in the past. Some authors even took it the next step and cited a cause for this phenomenon: The DOT's tarmac rule, which admittedly doesn't take effect until April, but still was apparently the cause of this conservative operational approach.

Here's a sample:
Tarmac Rules Get Flights Dropped -- USA Today
Storm Toll: Two Million Passengers and Counting -- WSJ
Airlines' new approach on cancellations shown - McClatchy-Tribune via Montreal Gazette

It is noteworthy that none of these articles quoted anyone from an airline that would suggest airlines have actually changed their approach. They simply cited FlightStats facts about the sheer volume of canceled flights and assumed it was meaningful.

Well it turns out, when you look at real data, those claims are unsubstantiated at least through the end of 2009. In past winter storms of similar magnitude, roughly the same percentage of flights were canceled before, during, and after the storms.

Before I give numbers, I'll caveat this by pointing out the weaknesses of my analysis:
1) Not all storms are created equal. I found 2 other storms of similar magnitude based on duration and snowfall. But still, there are differences between any two storms (including time of day and day of week they strike).
2) Flight volumes and schedules were different. I'll use only percentages to show the magnitude of cancellations and delays, but I recognize this could have impact..
3) Airport operations are different today than in the past. This surely impacts operational approach.
4) I don't include WHEN flights were canceled, only IF. This is an additional piece of analysis for which data is trickier. I realize some of the experts quoted in these articles were basing their premise on this difference alone, but the tone of the article and conclusions drawn fail to make this difference clear. Alas, if I can come up with data to do this analysis additionally, I'll give it a go.

Despite these (and other) weaknesses, I think the story still holds. At the very least, it should give one pause before writing another story based on non-existent data.

The storms, dates, and total snowfalls:
1) January 7-8 1996, 20 in. @ IAD, 23 in. @ BWI, 20in. @ JFK
2) February 16-17 2003, 19in. @ IAD, 25in. @ BWI, 22in. @ JFK
3) December 19-20 2009, 16 in. @ IAD, 21in. @ BWI, 16in. @ JFK
(Source: Weather Underground)

The airports studied:
IAD, DCA, BWI, JFK, LGA, EWR

(I didn't do the recent Feb 2010 storm because the DOT/BTS won't release the detailed data on flights until early April. FlightStats has some data to help this, but not at the granularity that I needed. I figured I'd just start with 2009 and I'll fill in 2010 when it becomes available, even if it proves me wrong!)

Over the course of 4 days, (the day before the storm, the 2 days of primary impact, and the day after the storm), here are the cancellation and delay statistics:

Overall cancelations
1996: 67.9% of flights
2003: 51.3% of flights
2009: 29.3% of flights

Overall flights that operated but were delayed 15 or more minutes:
1996: 15.1%
2003: 21.3%
2009: 31.1%

Overall flights that operated but were delayed 3 hours or more:
1996: 1.0%
2003: 1.3%
2009: 2.8%

Number of flights with tarmac delays of 3 hours or more:
1996: 4
2003: 0
2009: 1

While this data is the combination of stats from 6 airports, similar trends hold for each airport individually.

So what does this tell us? Namely the cancelation rates for the day before the storm were not higher in 2009. Cancelation rates the days of the storm were also not higher, as airlines in the past have also canceled every single flight from affected airports. Also, delays and long delays on flights that did go were higher in 2009 -- signaling that airlines were not optimizing to avoid long delays and would send planes if they thought they could complete the flight.

The one thing that is noticeably different: Cancelations for the day AFTER the storm were lower in 2009. Meaning airlines were able to get their schedules back to normal much faster than in the past. Their irregular ops programs are more sophisticated today and the way they shuffle crew and think longer-term about where their planes are allows them to get back on their feet faster.

But is that because they were canceling more flights? The answer is apparently no. Perhaps they just have better operational recovery plans? Or perhaps it is simply a data anomaly relating to the time the storms struck.

Finally, I wanted to note that long tarmac delays were NOT an epidemic in these winter storms, even in the past. Sure, there were 4 such instances in the great blizzard of 1996, but none in 2003, and only 1 this time around. I think this challenges the notion that airlines have changed their approach to eliminate these -- they weren't a big problem to begin with. Yes, Jetblue had the disastrous Valentine's Day storm of 2007 -- but that was a JetBlue problem uniquely. Aside from that, major tarmac delays are not often the result of big winter storms, but rather thunderstorms and other things that are harder to predict and plan for. As such, it's hard to conclude that airlines made major changes to how they handle snow in response to a DOT rule that hasn't taken effect and history would show requires little, if any, changes from how they've handled similar storms in the past.

This is by no means a statistical or scientific study. But it is empirical data that suggests airlines are NOT canceling more flights today than in the past. What they might be doing is canceling the flights earlier (the day before, even), allowing passengers to stay at home rather than wait at the airport. That might have created enough media buzz to lead to these biased conclusions about airline operations.

Perhaps the February 2010 storms will prove this analysis wrong, but in the meantime, this is the conclusion that the data suggests. Yes, there are holes in it, but it's a start.

Loading mentions Retweet
Posted by Evan 

Comments [2]

February 15, 2010

Is government killing the airline business model?

Last week, United CEO Glen Tilton lamented on the sad state of affairs in the US airline industry.

See the story here: United CEO: airline economic model broken

His thesis is that government regulation is killing the industry by adding 20% worth of taxes to each and every ticket and intervening in protectionist ways. In my favorite quote, he says: "the business environment that is 'essential' and 'normal' in virtually every other industry is outside the grasp of commercial aviation."

Strong words from a current CEO. Does he really believe this? Is he just whining?

Sure, one can't argue that the airline industry is one of the most dysfunctional of industries, but there are others. Look at the auto industry. The government OWNS most of General Motors, and you certainly don't see that with airlines.

Nobody said running an airline was easy -- it's hard work. The people who do it are smart, passionate, leaders who throw their entire being into the business. Even then, so much is out of their control. But perhaps a CEO should take a hard look inside before blaming the government on the industry's woes.

Here are a few of points that suggest the airline industry is not set-up to fail by bad regulation:

1) Some airlines do make money! Except in the worst quarters of the Great Recession (and post 9/11 recession), some airlines eked out profits. Southwest, Alaska, AirTran, to name a few that have shown positive quarters in the bleakest of times. Over the last 25-30 years, Southwest has been one of the highest market cap gainers of all companies based in the US. Across all industries!

2) Yes, government fees and taxes are a problem. BUT there are very tangible costs born by the government and prerequisite for flying planes. Airport security and air traffic control, for example. Who is going to pay for these? The fair way is to tax users of the system, as fees on individual tickets. Who is going to pay for NextGen? Users, through taxes. Yes, this can be (and is) subsidized by private operators (perhaps it should be more!) and the general tax base, but a certain percentage of airline taxes are necessary.

3) Airlines have demonstrated time and time again they will flaunt the law whenever they can. They did it with maintenance (resulting in FAA fines), they did it with price fixing (resulting in more fines and change of anti-trust policies), and they did it through hyper-competitive behavior (again, caught red-handed). Mr. Tilton, you have (fairly or unfairly) inherited the legacy of Crandall et al. The airline business has shown time and again through its history that it will abuse market power to its benefit. This has left the government little choice but to intervene. Even today, airlines and the ATA lobby Congress to avoid environmental legislation (and you wonder why you're not left to your own devices on this issue??) and against redistribution of slots at constricted airports (a fair, and market based methodology). Yes, there is a strong argument that this is in response to over-regulation, not the cause -- and you'd probably be right. That being said, it takes two to tango.

4) Cycles. Like many others, the airline industry is a cyclical industry. When things are good, they make a lot of money. When things are bad, they lose a lot of money. The idea is that you more than recoup your losses in good years. The US (and world) economies always have been, and always will be, cyclical. The unknowns are when the cycles will trigger, how long they'll last, and how good/bad the peaks and valleys will be. The anachronistic nature of when you make money and when you need cash reserves makes planning extremely hard and risky. It stifles buying new planes and opening new routes. But this game is not new to airlines, or to car manufacturers, or electronics companies, or real estate developers, to name a few. Citing a few years of heavy losses is not an anomaly (and certainly not proof the model is broken), it's the norm.

5) Aside from oil, what is an airline's #1 cost? Labor. Look there for the root cause of a broken model. Without taking sides between unions and management, suffice to say labor has been the most contentious, influential, and deterministic factor in the success of an airline. I'd argue how an airline manages its workforce is far more predictive of success than any government regulation.

Perhaps it's time not to reflect on the woes of an industry, but on the business model of your airline. Maybe United (just as an example, it applies to others as well) needs to re-think how it does business -- who if flies, how it flies them, on what equipment,  to where? 

Even if the arguments on regulation are valid (and some of them obviously are), perhaps those challenges can be turned into opportunities for the airline that adjusts its model to that reality? And not incremental changes (like US Airways changing its stock ticker to LCC and pretending it's low cost) -- I'm suggesting fundamental changes to a core business model.

Could it be done? Good question, but either way, it certainly beats whining to an unsympathetic public.

Loading mentions Retweet
Posted by Evan 

Comments [0]

February 11, 2010

Policy & Politics: The slot plot thickens

Big news from the DOT this week: They have tentatively approved the US Airways and Delta slot-swap deal, but pending some conditions that make the approval all but moot. It's a long post -- but stay with me, it's got some pretty interesting policy nuances that are worth discussing.

Let's review. Last August, US Airways and Delta reached an agreement to swap slots at LaGuardia and Reagan National airports. It would allow each airline to consolidate operations between the two airports. The plan called for US Airways to give Delta 280 slots at LGA (that's 140 additional flights in and out) along with it's beautiful terminal (the newest and by far the nicest at LGA). In exchange, Delta would give US Airways 84 slots at DCA and some international route authority. As part of the deal, both promised to start new service from their newly consolidated cities -- thereby expanding non-stop service into the two airports, especially DCA. Delta also promised to upgrade all of the US Airway's current turbo-prop service to regional jets.

Why do US Airways and Delta even have to "ask" the DOT for permission to do this? Surely there could be anti-trust repercussions, but that's not the DOT's purview, that's the DOJ.

It dates back to a rule called the LGA Interim Order (or "Order" for short) which the FAA published in December of 2006. It set limits on operations at LGA to prevent even further congestion and delays -- effectively freezing how many slots were available. The idea was to do that temporarily, giving the FAA time to figure out a more sustainable and fair way of allocating slots, an admittedly scarce resource. But the FAA punted on a real solution, extending the "Order" several times, most recently in fall of 2009 with a new expiration of October 29, 2011. DCA is under it's own restriction, called the High Density Rule, or "HDR".

The problem here is that the Order is set to expire in 2011, so that any transaction an airline makes now effectively becomes moot at that point under the current regulation. That freezes transactions, since no airline wants to buy or sell slots with an expiration date looming. Hence FAA permission is required to "waive" the Order and make a complete transfer that will transcend the expiration date of the current regulation.

It's relatively straightforward to see the benefit of the swap to US Airways and Delta. Each gets to shore up a new "hub" where they have lots of market power, cost synergies, and connecting abilities. US Airways LGA operation is hemorrhaging cash and this allows them to get out of it and for a huge benefit at DCA. There is also benefit to a handful of new cities that have been promised service as a result of the swap, places like Islip, Ithaca, Pensacola, Tallahassee, Birmingham, and Little Rock (to name a few). All have been promised regional jet service to DCA and connecting power all over the east coast.

The DOT, however, was a little more skeptical. In their ruling earlier this week, they stated that while there were some pro-competitive benefits to the deal by opening new service and competition on certain routes, there was also A LOT of anti-competitive possibilities resulting from massive concentration increases at both airpots. The swap would give Delta at LGA and US Airways at DCA very large market share leads. At LGA, Delta would then own 49% of all slots, as compared to 24% today. At DCA, US Airways would go on to own 54% of slots, as compared to 44% today. The resulting market shares would make the two airlines 2-3x bigger than the #2 player at each airport -- dominant market share, especially at LGA where US Airways, Delta, and American all are in a near-tie for market leader today.

The DOT has a clear mandate to keep the air transport industry competitive, hence its jurisdiction to rule based on competitiveness. They cited many studies showing how increased market concentration leads to higher average fares, and already cited LGA and DCA as high-fare airports. They also refuted US Airways' and Delta's claim that the market is defined by all metro-area airports together by showing how massive fare differences between the airports (JFK vs. EWR vs. LGA, and DCA vs. IAD vs. BWI) prove they are NOT the same market, otherwise you would expect a leveling of fares between airports. They also refuted the notion that the particular cities to be served would make the market power increase moot. The DOT stated that the airlines are not bound to follow any current route plan and could shift capacity at will. The DOT has to use its jurisdiction over slots, it cannot legislate which routes airlines fly.

In summary, the airlines said it was all happy and good for the airlines and the consumer. The DOT was skeptical. So they approved the slot swap, but only provided they give some up. Basically they have to sell some of the slots (14 at DCA, 20 at LGA) as a tax for increasing market power. And even worse, they have to give it up to airlines who are new to the airports or currently have less than 5% of slots -- leaving only LCCs in the game. They go on to explicitly say that LCCs bring low cost, innovation, and better operations (yes, they even say that!) to airports, which are all good for the consumer. So in order for the swap to go through, US Airways and Delta have to let airlines like Southwest, Spirit, or AirTran get more slots at LGA and DCA. Remember, the only reason they want to swap is to PREVENT airlines like those from getting any slots! In a previous post I mentioned how airlines will hold onto slots just to keep others out, even if it means they lose money. This is EXACTLY what US Airways is doing at LGA today -- running turbo-props to Philadelphia just to hold onto the slots, at their own peril. So what makes the DOT think that suddenly they'll be okay with selling slots to Southwest?

Is this politics? or good policy? I believe it's a little of both. On one hand, the DOT's ruling is pretty sound. There is reason to believe that the market power increases will translate to higher fares, and there is definite reason to question the motives of the airlines. If the airports weren't capacity constrained, then natural market powers would counteract monopoly fare increases by enticing new entrants. But since there cannot be any new entrants at either of these airports, there's no protection and the DOT has a mandate to use its control over slots (an airline privilege, not a right) as a way to install some checks.

However, I do believe that lower cost options at nearby airports (JFK, for example) does mitigate this issue quite a bit. LGA attracts higher willingness to pay passengers and is slot-contrained, so it has higher fares. If fares go up even more, passengers will likely switch to JFK.

But the requirements for the swap are arbitrary. Yes, they've justified the number of slots each would have to sell and to whom in a reasonable way, but the punishment doesn't fit the crime. At least allow them to sell slots to whatever airline they want, not just new entrants. The problem here is that the FAA has been unable to find a way to allow new airlines access to LGA and DCA because it can't win any political fights with the network carriers. This is a back-handed way of getting back at them by forcing them to acquiesce on that effort in order to get what they want. And yes, the DOT must know this is tantamount to killing the deal -- there is no way they'll go through with this swap if it means selling slots to LCC competitors. But perhaps the DOT doesn't care, it is sending a message loud and clear: If you're going to block us from doing our job, we're going to make it hard for you to manipulate the system to your benefit. Tit for tat. A bit of good politicking, but perhaps a bit of good policy also.

Finally, you might be interested to know who voiced support or criticism of the slot swap during the last few months. US Airways and Delta got many folks to send letters to the DOT and FAA in support of the swap, among them: Mayors, City Councils, Chamber of Commerces, and Airport Authorities from 11 cities with proposed new service, over 30 members of congress, 4 senators (New York and Arkansas), Governor Patterson of NY, and 22 Delta employees. Noteworthy is that while all 4 senators are democrats, the members of congress span both parties.

And who voiced concerns about the plan? Only 3 letters: Syracuse Chamber of Commerce (afraid of competition on flights to upstate NY from Rochester, Ithaca, and Buffalo), a group of 4 from congress (including Oberstar, the chair of the Committee on Transportation and Infrastructure, and Costello, the chair of the Subcommittee on Aviation), and a lengthy letter from Spirit Air Lines' lawyer, detailing how the plan hurts them at LGA and recommending the plan they eventually adopted, leaving an opening for Spirit to perhaps acquire new slots.

The letter conspicuously absent? The one from Southwest, or perhaps AirTran. The ruling reeks of their involvement as they stand to benefit the most from the DOT's new entrant requirement. You can bet there were phone calls -- why send a letter and make things messy?

Next steps: Another public comment phase on the ruling, but unless it changes dramatically, it's pretty much dead in the water.

The score in this battle: US Airways / Delta - 0. FAA - 1.

Read all the documentation yourself at: http://www.regulations.gov/search/Regs/home.html#docketDetail?R=FAA-2010-0109

Loading mentions Retweet
Posted by Evan 

Comments [0]

February 5, 2010

Are airlines adding more buffer time to flights? Yes, but not as much as you might think

I read the WSJ Middle Seat Column article on buffer times (Why a Six-Hour Flight Now Takes Seven)

Scott McCartney did some analysis on how block time (or scheduled flight duration) has changed since 1996.
He noted that in a sample size of 50 flights he looked up, block time has gone up, indicating airlines are adding more buffer time into flights.

This creates different customer expectations and allows a better on-time performance.

Since I'm a stickler for comprehensive analysis, I decided to run the analysis on ALL flights for March 1996 and compare it to March 2009 (I wanted to compare actuals also, so I used 2009 instead of 2010 scheduled). Yes -- you can get all of this data publicly. You don't need to hold onto old timetables as Scott suggests. That way I can run the analysis on all flights simultaneously rather than looking up a sample size.

So what are the results?

(note: Scope is March 1996 compared to March 2009. Like flights are the same carrier, origin, destination, and hour of departure. Only major airlines that operated in both months are included: Delta, Northwest, US Airways, American, Southwest, Alaska, United, and Continental)

1) For all like-flights, average scheduled time has gone up by a whopping 8 minutes on average. Actual flight time (gate to gate) also went up, by an average of 6 minutes. That increase in 6 minutes is split mostly between air time and taxi-out time (with taxi-in time going up on average only by 1 minute).

2) By airline, Delta increased their schedule times the most (up by 13 minutes on average!), Northwest and American the lowest (5 minutes increase on average). But Continental and United experienced the biggest increase in actual time -- 9 and 8 minutes respectively.  For Continental, that was mostly taxi-out time (Congrats Newark!), for United it was air time.

3) By Departure airport, JFK had the highest increase in scheduled times -- an average increase of 27 minutes across all airlines. This is the phenomenon Scott was referring to -- airlines buffering with more time to account for long airport delays. However, the actual increase in time for flights from JFK was only 10 minutes, and 2/3rds of that was the result of air time, NOT taxi out time. The next highest increase at major airports came from LGA and IAD at 16 and 14 minutes respectively. Lots of smaller airports also had increases in block time -- most notably the Hawaiian airports. Anyone have any ideas why? Remember this would be only Hawaii - Mainland flights operated by the major carriers.

4) By Arrival Airport: EWR takes the cake for major airports (15 minutes average increase in time), followed by LGA, and ATL at 14 and 13 minutes respectively.

5) For Flight: The winner is Continental's Chicago - Newark flights leaving at 5 and 6pm, both getting an additional 45 minutes of time. It's notable that that actual increase in time was only 19 and 22 minutes for those two flights! So Continental is certainly over-compensating.  Those time increases are mostly from taxi out time (due to ground delay programs at Newark, no doubt). AA's JFK-LAX flights also got a bunch more time  -- near 40 minutes despite actual flight time increases of only 13 and 15 minutes. (Note: Scott refers to Delta's JFK-LAX flight as adding an hour. This is true, but the departure time also changed. In 1996 it was a 9:40pm flight with a 6 hour duration, and in 2010 it is a 9pm flight with a 7 hour duration. In my 2009 analysis, it was an 8:30pm flight with a 6 hour 33 min duration. Certainly some of that time is related to the micro-managing of the departure slot given how finicky JFK is in the evenings, although I don't disagree with Scott's assertion that part of it is also related to adding more buffer time).

What about flights that were actually much more late -- did airlines add more time?

The flights whose flight time grew the most from 1996 to 2009 were Continental's Newark-Boston  and Cleveland-Boston (between major airports with big enough sample size). These flights took on average for the month 69 and 54 more minutes in 2009 than 1996. But Continental only added 2 minutes and subtracted 1 minute to those two flights! Continental appears to have missed the ball on adding buffer time to those particular flights.

Overall -- 87% of flights had time added to their scheduled between 1996 and 2009, while only 80% experienced longer actual elapsed times. Meanwhile, 10% had time subtracted from their schedules, but 16% of flights were faster in actuality. So airlines were certainly over-compensating in 2009.

Motives? Like Scott says, they are many fold: Better operations overall, better on-time performance, better ability to plan.

It's a game airlines play to balance their operational needs and customer service. Sometimes they win, sometimes they lose. But predictability of delays is the biggest lever to help them play this game. Over time, we hope to use FlightCaster data to help with these kinds of decisions as we gather more data and analyze it in different ways.

Evan

Loading mentions Retweet
Posted by Evan 

Comments [0]

February 2, 2010

Mobile and Travel: Implementation has been slow, but are we nearing an inflection point?

Mobile has been in the forefront of travel industry's mind for a while now.
It seems the topic is only getting hotter, yet implementation of meaningful mobile applications still lags behind many other industries.

To me, that appears counter-intuitive since when is mobile more relevant than while traveling?

The crux of this dichotomy lies in the distinction between travel planning and actually traveling. Most online travel companies make the money during travel planning. They help you get through the massive amounts of information about what flights to choose, hotels to stay in, activities to do, and then they take an affiliate fee off of that booking or capitalize on the traffic to generate advertising revenue. Even the airlines and hotels themselves make their money during the planning phase: You choose them weeks or months before you fly or stay.

This disconnects the purchasing decision from the actual traveling and therefore makes it a tenuous connection between day-of-travel mobile strategies and bottom line.

FlightCaster is a day-of-travel tool. We help the traveler navigate issues related to real-time flight delays. The mobile applications in that space are obvious. But because this is disconnected from the purchasing decision, your usual travel companies haven't invested in more day-of-travel functionality.

Anyone have an iPhone app for their favorite airline? Probably not. Because in the US, only Southwest has an app and it was just released in January.

Yes, there are over 140k apps and 3 billion (yes, with a b) downloads of apps on the iPhone -- every company from Whole Foods to State Farm has an app, but only 1 US airline -- an industry whose entire business is people traveling, on the go, almost by definition the core market for mobile apps.

There are two things that are going to change this (and it IS changing, just not nearly as fast as it should):

1) Airlines recognizing that they HAVE to provide tools for their customers day-of-travel. It's' no longer a luxury, it's a necessity. This is what is happening now. There are thousands of travel apps by 3rd party developers (like us). Airlines are realizing they are missing out, so they are building their own and teaming up with current app makers to do so (See recent announcement from Mobiata, maker of FlightTrack in the iPhone: Two US airlines taking seat upgrades to mobile apps through Farelogix, Mobiata)

2) Making a more direct connection between travel planning (i.e. the bottom line) and mobile strategies.

Regarding point 2), there is much consternation. Traditionally, even the biggest and most informed players in the travel space have said repeatedly they don't believe people want to book travel on their smartphone. Eye for Travel's Mobile Report in 2009 clearly showed that travel suppliers are unsure about mobile applications (Eye For Travel). Even more, you have companies talking about what people don't want to do. Just today, a report from the UK shows that 78% of people answer "no, never" to the question: Would you use your mobile to purchase online? (See post here)

But then you have companies like Kayak saying that they're building mobile booking tools because they understand it's the future (See that post here)

So who's right? Why are companies so slow to providing tools for booking travel on smartphones?

My take is that it is irresponsible to say that people won't do something on their mobile device. If we've learned anything in the last 2 years, it's that there is no limit to what smartphone are capable of, and also no limit to users adopting seemingly far-fetched applications. What seems unlikely or impossible today becomes the norm not in years, but in months!

So a warning to all you travel companies: Travel planning and booking IS going to be important in the mobile world and whether you think so or not (or like it or not), you best get on board or your competitors will beat you. Also, day-of-travel will remain the killer-app for smartphone, so invest in it! Your presence in that space will impact your customer loyalty. At FlightCaster, we know that experience has a long way to go and that's why we're working with travel companies who understand how much more can be done to help travelers while en route, and why that is a critical part of the value proposition to their customers.

Feel free to share your thoughts below: Would you book travel on your smartphone? Which is the best application of mobile in the travel world: Planning tools or day-of-travel tools? Are both required for a travel company to be successful?

Evan

Loading mentions Retweet
Posted by Evan 

Comments [3]