12/25/2009

Another government regulation: Three hour maximum for planes on the tarmac

It seems like such an obvious regulation right? It is important to note first that airlines have a strong incentive to get things right to begin with. If they keep people a long time on the tarmac, people won't fly their airlines again.

This year through Oct. 31, there were 864 flights with taxi out times of three hours or more, according to the Bureau of Transportation Statistics. Transportation officials, using 2007 and 2008 data, said there are an average of 1,500 domestic flights a year carrying about 114,000 passengers that are delayed more than three hours. . . ."


That is an annual rate of 1,037 flights this year. For 2007 and 2008, it is an average of 822.5 million passengers and 10.94 million flights. So that is 0.01 percent of passengers were on flights delayed by more than three hours and 0.01 percent of flights.

So what are the implications? Given the huge fines per passenger, airlines won't even put people on planes if there is a chance that the plane won't take off soon. Zero tolerance rules also make about as much sense here as they do for schools or anything else. I would guess that many people have been on their plane queuing to take off when the FAA tells planes that they have to wait because of weather. Now suppose that after waiting for two and a half hours the FAA tells the airlines that they will soon give the all clear, would you like to have to go back to the terminal?

Passengers value getting to their destinations and they also value not being stuck on planes, but who is best to make those decisions? The customers or the government? It is also costly to return passengers to the terminal and remove baggage from the planes before the three hours are up. If airlines make the wrong decisions, what do you think will happen to whether passengers are willing to take their planes. If this is a significant problem, should airlines be competing against each other for passengers based on this issue? The rules will make the airlines more risk averse than passengers want them to be. One clear implication is that this will raise the price of air travel.

There are probably a range of responses that different airlines will take on their own. If you are in first class, you probably get served a lot even when you are on the tarmac. Some airlines will serve passengers in coach more than others. Those services cost something and passengers can pick the airlines that they want based upon price and whether they are willing to save a few dollars and take that additional risk. People can bring water bottles on the plane with them if they would rather save a few dollars and do it that way.

What bothered me was a report that the transportation department warned airlines not to appeal the decision.

There might be some tests that can be done given that the rules apply differently to different types of flights.

The regulations apply to domestic flights. U.S. carriers operating international flights departing from or arriving in the United States must specify, in advance, their own time limits for deplaning passengers. Foreign carriers do not fly between two U.S. cities and are not covered by the rules. Tarmac strandings have mostly involved domestic flights, but the department is studying extending the three-hour limit to international flights, LaHood said. . . .

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6 Comments:

Blogger DJMooreTX said...

If this is the regulation I think it is, the airlines have the option of returning the passengers to the terminal. They also need to provide food, water, and functioning toilets to passengers after two hours.

If the regulation just flatly assessed a fine for a delay, that would kill airtravel, but I don't think that's what's going on here.

My question?

Why do the airlines not now immediately return to the terminal if the plane sits on the tarmac for more than about thirty minutes? What's the incentive to stay away from the terminal?

12/25/2009 5:26 PM  
Blogger Brian P said...

I'm not a fan of them being able to hold me against my will while on the ground and given some of the horror stories of sitting on the tarmac, something had to change.

12/25/2009 11:28 PM  
Blogger Al B. said...

Talk about overly-simplistic analysis! Of those 822.5 million passengers per year, the vast majority are going to be business travelers. And when your company says you need to be in Seattle by tomorrow morning, your options are limited, particularly when your company insists that you take the least expensive available flight.

The airlines do compete for passengers, but they don't have to provide 'good' service, they just have to provide service that isn't any worse than any other airline. It costs a lot of money for an airline to fly an airplane from one city to another. If they don't have a sufficient number of passengers on a particular plane to defray the cost of the flight, they routinely delay or cancel flights to consolidate their passengers onto fewer flights. Of course, if they do this too often, they do alienate their passengers, so they offer fewer flights. There is going to be an optimal number of flights that minimizes the number of delays and cancellations without sacrificing the loss of potential business. Too few flights, and some potential customers will be forced to use another airline. If they have a good experience with that other airline, they may not be back any time soon.

A number of times, I've atempted to book a reservation and the airline was happy to oblige, but wouldn't issue me a seat assignment. Whenever I asked if that meant that the flight was over-booked, I was always told, "No, the flight is merely 'booked to capacity'." Of course, not everyone shows up for a flight that they've booked, so the airlines routinely over-book, with the expectation that at least some of the wait-listed passengers will be able to fill seats that have opened up at the last minute. But if you're not experienced enough to realize that not being assigned a seat means that you are actually wait-listed, well, that's just too bad for you.

I once sat in a terminal for eight hours waiting for a commuter flight that had been delayed. At one point early on, they had everyone board a shuttle bus to go out to the airplane. The shuttle bus was nearly empty, and never left the terminal. We were then herded back into the terminal and given the lame excuse that they couldn't take off because the plane didn't have a flight attendant, who was supposedly on another flight that had been delayed. Seven hours later, we got back on the shuttle bus again. This time, the bus was full and we finally took off. After a few experiences like this, you realize that customer comfort is not their primary concern.

While customer satisfaction isn't a complete externality to the airlines, it is only one of a number of factors that they consider when they dynamically optimize their performance. And if they keep you on the plane for six hours rather than keep you in the terminal for six hours, you're less likely to ask for a refund and go looking for another flight with a different airline. After all, you're already on the plane, they haven't told you when it will take off, and it could be any minute now -- so you wait.

12/26/2009 8:09 AM  
Blogger John Lott said...

Dear DJMooreTX:

There were several reasons why the airlines just don't immediately return to the terminal. But the main reasons are it is costly for the airlines to do that and unload the passengers and luggage and they might have some expectation that they will be given the all clear in a relatively short amount of time. There are a lot of trade-offs (some people would rather be getting on to their destination even if it means having to wait an additional half hour) and if the airline guesses what its passengers want wrong, it will suffer the loss of the patronage.

12/26/2009 1:28 PM  
Blogger John Lott said...

Dear Al B.:

Thanks for the post. On overbooking, I assume that you have never actually been bumped from a plane. What happens is that they keep offering people higher and higher payments until enough people value the pay off more than being on that flight. If the airlines didn't overbook, the airfares would be significantly higher. A number of passengers book seats and then cancel at the last moment. If you ever fly standby, you would see that it is actually quite common for people not to show up for a flight.

"they don't have to provide 'good' service, they just have to provide service that isn't any worse." My guess is that if someone thought that they could do a better job of figuring out the trade-offs in customer preferences that I mentioned (see post above), they would buy one of the airlines or start their own. The FAA rules will raise prices and do a much worse job of guessing customer preferences. Why do you think that the FAA will have a better incentive at getting these decisions correct?

12/26/2009 1:35 PM  
Blogger Al B. said...

John,

Thanks for your reply. You're right, I've never been bumped from a plane. I've also never made a reservation when the airline refused to issue me a seat assignment. However, I have been treated like a piece of meat enough times to come to the realization that my satisfaction is not the airline's primary concern -- cost (maximizing profit, minimizing loss) is. On one consulting job that I had in South Carolina, I had to travel back and forth from Philadelphia 16 times. On 15 of those 16 trips, I was either delayed for several hours or had either my initial flight or my connecting flight canceled.

Do I think that the new regulation will make the cost of flying more expensive? Absolutely! It changes the equations that an airline uses to compute its optimum strategy, which, given the amount of money it costs to run an airline, I have no doubt that they do on a constant, real-time basis. And it changes things on an industry-wide basis. However, the fees thay my company pays to send me to remote places is an externality to me -- my time and the amount of aggravation that I experience are not. I suspect that this is true for the vast majority of the 822.5 million passengers who fly each year.

Raising airfares will no doubt reduce the number of travelers per year, as companies reduce the number of marginally cost-effective trips they have their employees make. This, in turn, will force the airlines to develop new optimal strategies to attract customers at a lower level of total business that also demands greater respect for customer comfort. The result should be a kinder, gentler air travel system. Those of us who can't vote with our feet can still complain to our elected representatives, who can then influence the FAA.

12/26/2009 6:53 PM  

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