1) Tarmac delay contingency plans (no delays in excess of 3-hours)

2) Designated consumer advocate at airlines

3) No scheduling of chronically delayed flights

4) Publication of historical delay data on web-sites during purchasing

5) Customer service plans (placed into contract of carriage)

Most attention has been paid to #1 above -- the one that says if airlines leave passengers stranded on a plane for more than 3-hours, they face fines of up to $27,500 per passengers. This has led to speculation from industry experts, air traffic controllers, and CEOs alike that more flights would be canceled rather than risking the fine.

The FAA has given mixed messages over the enforcement of this fine. A few weeks ago, when denying exemptions to the rule due to runway construction at JFK, they said the fines would be enforced with reasonable discretion based on factors that were clearly out of the airlines control (see my blog post on that here). But today, DOT Secretary Ray LaHood made it clear the max fine would apply (read about that here)

So how will airlines respond?

For one, the cost could be very high. In 2009, 903 flights had tarmac delays in excess of 3-hours. In Jan and Feb of 2010, 82 flights qualified (see data from the Bureau of Transportation Statistics here). At $27,500 per person with an average of 100 pax per flight -- that's a staggering sum (the quick math shows it could cost the industry more than $200mm per month at the current rates with max fines applied!). That leaves the airlines no choice but to respond.

The easiest response is to cancel flights more readily. Especially at hubs where an airline has more flexibility, that would eliminate the concern and obviously the cost of that is far less than $27,500 per person (re-booking at full-fare on another airline would cost a fraction of that!). So even if they get it wrong 90% of the time, it's still a money saver over the fines. Then again, most of these are weather-related delays where an airline would not be required to foot the bill for re-accomidation. As such, the cost/benefit analysis would likely swing to cancel very fast.

That being said, there's a lot of bad PR to be had for the airline that leads this strategy. The ideal response (from the DOT and customer perspective) is that airlines just figure out how to bring planes back before 3-hours if necessary. This would eliminate pre-emptive canceling and would mean they'll only cancel those ~900 flights per year -- a small, more manageable figure. That still has a negative impact on travelers, but at least it wouldn't require a guessing game. The problem with that is at some airports (read: most airports where this is a problem), bringing a plane back is non-trivial. Also, that process would have to start around 2-hours after departure, so there is still some uncertainty of whether the plane will be able to take-off by the 3-hour mark. However, new procedures that allow planes to queue for take-off without leaving the gate are being tested at JFK which could make this issue much less prevalent.

My guess: More pre-emptive cancellations, but perhaps not super-noticable for the casual traveler. I see some limited impact, but likely not anything that fundamentally changes the game. The incentive for savvy travelers to double-book on multiple flights or airlines will go up, since a higher cancelation rate means you'll need to spread your options.

What about the other parts of the rule?

My research in December in conjunction with the Associated Press showed the impact of the chronically delayed flights rule will be minimal (see that here). Few flights qualify under tight rule definitions and even then, the fix would be relatively easy.

The only other rule with a noticeable effect on passengers might be the publication of historical delay data. However, this is already being done by many carriers and online travel search sites. I think it's an outstanding question whether that data has any impact on bookings (anyone out there care to comment? Have you ever changed your booking behavior based on historical delay data?). Overall, this is an administrative nuisance for airlines and dubious value to consumers.

In answer to my title question: Yes, air travel will be the same. With the exception of maybe a slightly higher cancellation rate at certain airports (e.g. JFK, Newark), it will be business as usual at airlines. All their whining and complaining about the rules is for naught. And similarly, it's unclear the FlyersRights folks will get much satisfaction. 

But we'll see what really happens -- it all begins tonight at midnight.