Demand Management

Demand Management Coping with flight delays and congestion at airports By G. Brian Busey & George C. Eads August 2000 There is no more vexing problem facing the airport and aviation community than the growing number of air carrier...

This same DOT data shows that 8,590 flights were cancelled by the major carriers at the 29 largest U.S. airports during April of this year.

So what can be done about the rising tide of flight delays, cancellations, and consumer frustration?

Options for Delay Management
One obvious solution to aircraft congestion and delay is to build more runway capacity. But while many major runway projects are in the planning or construction phases, major runway projects involve enormous environmental and political hurdles and thus sometimes require decades to complete, if they ever get off the drawing board.

In the meantime, the FAA, the airlines, and airport management are examining ways to improve flight efficiency and reduce delays. The options tend to fall into two categories:
• enhancing the supply of capacity within the airports' existing runway configuration ("supply enhancement"); or
• decreasing the demand for runway capacity (demand management).

The aviation community has been researching and experimenting with a number of supply enhancement measures. For example, the FAA is considering authorizing new techniques for aircraft approaches such as the Simultaneous Offset Instrument Approach (SOIA), which should, in theory, permit more aircraft to use existing runway capacity during poor weather conditions.

Another new technique that FAA is trying is to place some aircraft into lower than normal altitudes below 30,000 feet, which again increases capacity but at some cost to fuel efficiency. These and other supply enhancement measures, however, are at best a partial solution to the delay problem.

The more viable short-run solutions to flight delays and cancellations must be found in a combination of demand management measures. Indeed, even with the phase-out of the slot system, the FAA and the airlines are nevertheless engaging in actively managing demand for scarce runway capacity at major U.S. airports. The basic strategy presently employed is known as "flow control," which involves the ATC imposing ground holds on flights during periods of bad weather. A relatively new tactic for implementing "flow control" is a process known as Collaborative Decision-Making (CDM). This process allows the FAA and the airlines to cooperatively determine just which flights will be delayed or cancelled when bad weather reduces available runway capacity.

Analysis of the impact of this system, however, shows that it tends to concentrate delays and cancellations on flights that originate most closely to the airport experiencing the bad weather problem. These are short-haul and commuter flights such as the LAX-SFO shuttle service.

Airports also have a role to play in managing flight delays and congestion. Although the Airline Deregula-tion Act of 1978 preempts states and municipalities from enacting laws or rules relating to air carrier prices, routes, or services, the law expressly does not limit airport owners and operators from carrying out their proprietary powers. Federal courts construing this so-called proprietor's rights exception have included the management of noise and congestion among authorized local proprietor powers.

DOT/FAA has also recognized the legitimate role of airports in managing congestion and delays in the final Policy Regarding Airport Rates and Charges ("Final Rates and Charges Policy"), which sets standards for reasonable landing fees and rental charges to the airlines (American Airlines, Inc. v. DOT, 202 F.3d 788,806).

In fact, the Final Rates and Charges Policy expressly authorizes airports to use a "properly structured peak pricing system that allocates limited resources using price during periods of congestion."

Nevertheless, major U.S. airports have not yet adopted peak pricing systems as an approach to managing congestion and delay. This may be due, in part, to contractual limits in existing lease and use agreements with airlines operating at those airports and to the difficulty of designing and implementing an effective peak period landing fee system.

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