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...

Airport proprietors considering development of local rules to manage congestion and delay at their airports must also consider the Airport Noise and Capacity Act of 1990 (ANCA) and Part 161 of the FAA regulations. Part 161 was adopted to implement the provisions of ANCA that require local airports adopting restrictions on Stage 3 aircraft (other than peak pricing) to submit such rules to the FAA for review and approval. Part 161 requires elaborate notification and justification, including a benefit/cost analysis of the proposed restriction before the FAA will even consider the proposed local restriction.

To date these regulations appear to have deterred airport proprietors from developing new local rules designed to deal with local noise or congestion problems. Recently, San Francisco International Airport began to develop a local congestion rule under the Part 161 framework. However, that effort was suspended based on a tentative agreement between United Airlines and the airport. Other airports including Burbank have begun to develop local noise regulations under the procedures laid out in Part 161.

Normally, when a commodity such as runway capacity is scarce and demand is high, we use some form of the price system to allocate that capacity to its most valuable use. But this is not happening at major U.S. airports.

Because federal law requires airports to be available to all airfield users on reasonable and non-discriminatory conditions, smaller aircraft such as turboprops carrying 30 passengers have the same "right" to use the airfield as a Boeing 757 carrying 180 passengers or a Boeing 747 carrying over 400. This situation effectively disguises the additional cost that smaller aircraft impose on the national airport system — costs that passengers ultimately bear in terms of lost time and additional expense resulting from flight delays and cancellations.

The preliminary delay and cancellation data for the Summer of 2000 suggest that delays are continuing to increase. Although the FAA and the airlines reportedly are working more closely to address the national delay problem, much more needs to be done. Some of the approaches being pursued by the FAA and the airlines such as CDM have the potential to exacerbate delays in certain categories of flights (i.e., short haul and commuter) at major U.S. airports. Accordingly, airport management needs to consider steps that it may take to reduce and alleviate delays and congestion at the local level.

A key area where airport management can help reduce passenger frustration is prompting the dissemination of better and more timely information about delays and cancellations.

On-Time Arrival Percentage At Select Major U.S. Airports
(April 2000)
Airport Percent On- Time
• Atlanta (ATL) 77.1
• Boston (BOS) 64.7
• Chicago (ORD) 65.4
• Denver (DEN) 72.7
• Los Angeles (LAX) 69.8
• New York (JFK) 73.6
• New York (LGA) 65.6
• Newark (EWR) 66.8
• Philadelphia (PHL) 68.0
• San Francisco (SFO) 65.4
Source: U.S. DOT Air Travel Consumer Report for April 2000, issued June 2000.

A Historical Perspective — The Slot System
When examining today's problem of flight delays and cancellations, it is useful to reflect on history. During the 1960s, the growing use of jet aircraft, improvements in commercial air service, and rising discretionary incomes led to dramatic increases in demand for passenger air service. By the mid to late 1960s this growing demand resulted in substantial congestion and flight delays at a number of major U.S. airports.

Initially, at the urging of federal regulators, the airlines attempted to agree on voluntary reductions in schedules at the major congested airports. When these negotiations failed, in 1968 the FAA adopted the High Density Rule — also known as the slot system — which limited the number of instrument flight rule operations per hour or half hour periods at five heavily-congested airports. The slot system was intended to be a "temporary" rule, but it eventually was extended for more than 30 years.

Recently, as part of AIR-21 Congress has begun to eliminate the slot system, directing the FAA to award a large number of new slots at the four remaining slot-controlled airports. Although there was a consensus that the slot system had a negative impact on airline competition, there is not yet a consensus on how to manage the scarce runway capacity at major domestic airports. Some mechanism for managing excess demand for runway capacity, however, will have to be found. For instance, since AIR-21 was enacted, the airlines have applied for more than 600 new slot exemptions to expand flights at LaGuardia Airport alone.

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