Congestion costs billions, but airlines show little concern

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Introduction

 March 21, 2019, © Leeham News: There are many estimates for how much flight delays and disruptions cost airlines and passengers. But everyone agrees the total number is big—possibly more than $1bn for each major US airline each year.

In 2017, delays cost airlines and passengers $26.6bn, according to the FAA/Nextor estimate. That total includes direct cost to airlines and travelers, lost demand and indirect costs. Congestion at the three major airports serving New York City directly cost air carriers an estimated $834m a year, according to a 2009 report.

Chicago O’Hare Airport at 7pm, Sunday, March 17, 2019. Source: FlightRadar24.

Yet despite the high cost, flight on-time statistics are basically where they were 20 years ago. Moreover, there are no discernible positive trends in the data collected by the U.S. Bureau of Transportation Statistics.

Of course, airlines take steps to decrease or limit flight delays, and, of course, some things, such as severe weather, are out of anyone’s control.

At the same time, airlines have shown little interest in pushing for low-cost solutions to decreasing system-wide congestion. There is no clear or easy explanations for carrier’s lack of motivation. However, interviews with current and former airline executives, researchers and others highlighted a few key factors.

Summary
  • Reducing air traffic congestion is a huge, hairy beast of a problem.
  • That complexity makes it difficult to see system-based approaches.
  • Airlines are concerned that competitors could benefit more from reduced congestion.

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