Impact of Three-Hour Tarmac Delay Rules and Fines
On Cancellations, Passenger Travel Time and Welfare

 
 

On April 29, 2010 United States Department of Transportation rules banning taxi-out, taxi-in and diversion ground times greater than three hours became effective. These rules were the product of a decade-long debate between airlines, consumer groups and regulators over the federal role in mandating how airlines manage departures during severe weather events. 


Our research program outlines the background and specific of the tarmac delay rules.  Using historical data of tarmac delays, the causes and patterns of extended tarmac delays are analyzed. We analyze airline responses to the tarmac delay rule and provide a case study. We review reported cancellation data for May 2010 and compare current (post-rule) trends against historical patterns. We assess public cost and benefit with particular focus on the balance between tarmac delays and cancellations. DOT had projected that public benefits exceed public costs from the tarmac delay rules, but initial results under the rule indicate that public costs have far outweighed realized benefits.  The rule and enforcement strategy have created significant public harm. 


This paper concludes that while 110,000 passengers a year will be spared an average of 3.26 hours of taxi-out delays, at least 200,000 passengers will be on more than 2,600 flights cancelled directly and solely to comply with tarmac delay regulations. Due to aircraft availability and network design, these 2,600 flights will drive at least another 2,600 indirect cancellations, displacing another 200,000 passengers.  The total impact will be at least 5,200 flights and 400,000 passengers impacted.  DOT had projected just 41 annual incremental cancellations from the rule; this number was exceeded in the first month alone.


In the long term, we estimate that a 4:1 ratio of direct and indirect cancellations to prevented delays will result. For every three-hour tarmac delay prevented by the rule, two flights will be directly cancelled and another two flights indirectly cancelled.  In the short term, profound uncertainty about enforcement of the rule has driven a significantly higher cancellation ratio. Airlines are canceling flights that would not otherwise be impacted to avoid prohibitive and disproportionate fines.  Because tarmac-related cancellations peak during the summer months, when airline load factors are the highest, finding new seats for displaced passengers is challenging. For passengers on cancelled flights, re-booking time is significant. The net cost to public welfare from the DOT rules approaches $4 billion, discounted over a 20 year period.


We conclude that DOT’s tarmac rules and punitive fine threats have driven significant cancellations and public costs far in excess of quantifiable benefits. A transparent, rational fine structure, publicly available and disclosed, will reduce cancellations resulting from airlines’ extreme risk-aversion and minimize the public costs. The underlying tarmac delay rules, particularly those related to weather-driven taxi-out delays, should be re-examined by regulators, legislators and consumers to determine if the trade-offs inherent are in the public interest.

 

JULY 20, 2010

TARMAC I:  EXPLORATORY MODEL OF CANCELLATIONS CAUSED BY THE TARMAC DELAY RULE

A COLLABORATIVE RESEARCH PROGRAM BETWEEN
THE AIRLINE ZONE AND MARKS AVIATION LLC


CONTACT INFORMATION


DARRYL JENKINS

DJENKINS@TARMACLIMIT.COM


JOSHUA MARKS

JMARKS@TARMACLIMIT.COM

ABSTRACT

Study Materials:

    Overview Presentation (July 20, 2010)
    Overview.pdf

    Research Paper (July 20, 2010)
    Tarmac_Paper.pdf

    Letter to The Hon. Secretary Ray LaHood, DOT (July 20, 2010)
    DOT_Letter.pdf

    Appendix:  Reconciliation of Public Welfare
    Slide_Appendix.pdf

Background & Relevant Materials:

    DOT Regulatory Impact Analysis (December 19, 2009)    
    DOT_RIA_JAN10.pdf

    Marks, J. and D. Jenkins. Modeling Passenger Re-Accommodation Time
    for Flight Cancellations in Airline Networks  (June 30, 2010)
    Passenger Displacement Paper.pdf

    DOT Enforcement Guidance (April 28, 2010)
    DOT_Guidance.pdf

    DOT Press Release Responding to Study (July 20, 2010 @ 2pm)
    DOT_Response.pdf

    Complete cancellation data for May, 1988-2010 (zip, July 26, 2010)
    15_YEAR_26JUL10.xlsx.zip

    Secretary of Transportation Interview on WTOP (July 23, 2010)

Press and Media Coverage

    USA Today (July 21, 2010)
    Centre for Asia Pacific Aviation (July 21, 2010)
    Time Magazine (July 21, 2010)
    Chicago Tribune (July 20, 2010)
    Associated Press (July 20, 2010)
    NPR MarketPlace (July 20, 2010)
Tarmac_Limits_files/Overview.pdfTarmac_Limits_files/Tarmac_Paper.pdfTarmac_Limits_files/DOT_Letter.pdfTarmac_Limits_files/Slide_Appendix.pdfTarmac_Limits_files/DOT_RIA_JAN10.pdfTarmac_Limits_files/DOT_RIA_JAN10.pdfTarmac_Limits_files/Passenger%20Displacement%20Paper.pdfTarmac_Limits_files/DOT_Guidance.pdfTarmac_Limits_files/DOT_Response.pdfTarmac_Limits_files/15_YEAR_26JUL10.xlsx.ziphttp://www.wtopnews.com/?sid=2009958&nid=93http://www.usatoday.com/travel/flights/2010-07-21-tarmacdelays21_ST_N.htmhttp://www.centreforaviation.com/news/2010/07/21/tarmac-delay-rules-to-cost-the-public-welfare-usd4-billion/page1http://www.time.com/time/travel/article/0,31542,2005334,00.htmlhttp://www.chicagotribune.com/business/ct-biz-0720-tarmac-delays-20100720,0,4264419.storyhttp://www.google.com/hostednews/ap/article/ALeqM5jW6uI07pPNDvlg94hUVgCm5gZHrAD9H318J00http://marketplace.publicradio.org/display/web/2010/07/20/pm-three-hour-tarmac-rule-makes-more-delays/shapeimage_5_link_0shapeimage_5_link_1shapeimage_5_link_2shapeimage_5_link_3shapeimage_5_link_4shapeimage_5_link_5shapeimage_5_link_6shapeimage_5_link_7shapeimage_5_link_8shapeimage_5_link_9shapeimage_5_link_10shapeimage_5_link_11shapeimage_5_link_12shapeimage_5_link_13shapeimage_5_link_14shapeimage_5_link_15shapeimage_5_link_16

NOVEMBER 18, 2010

TARMAC II:  five-month impact of the
three hour rule on cancellations

Study Materials


    Overview Presentation (November 18, 2010)

    Tarmac Update Overview.pdf


    Research Paper (November 18, 2010)

    MA AZ Summer 2010 Cancellations & Tarmac Rule 18 NOV 2010.pdf


    Press Release (November 18, 2010)  

    MA AZ Press Release Nov 18 2010.pdf


    Complete Appendices and Exhibits

    MA AZ Summer 2010 Exhibits (Complete).pdf


    Individual exhibits available for download below.


Overview


The most comprehensive analysis to date of U.S. airline tarmac delays has confirmed that the threat of punitive fines related to DOT’s new three-hour delay rule has driven thousands of flight cancellations.  While the rule reduced tarmac delays by 523 flights this year, it drove an increase in cancellations by 5,064 flights, stranding 384,356 passengers on those flights.  The report, issued today, shows that threatened multi-million dollar fines and conflicting regulations are causing significant consumer harm.


The joint and independent study used a large-scale database of flight operations, weather, and air traffic control data to isolate the causes of cancellations.  Despite the best weather in a decade and fewer planes in the sky, airlines are cancelling flights at far greater rates under the rule than they did before.


In a webcast today explaining the study’s findings, The Airline Zone President Darryl Jenkins said, “the new tarmac delay rule had good intentions. DOT has threatened multi-million dollar fines for even minor violations, and needs to provide clarification on enforcement.  Facing punitive fines, airlines simply cancel flights that have any exposure to the rule, so thousands of passengers who would not have experienced a long on-board delay are stranded and inconvenienced. The rule is doing more harm than good.”


“DOT used a bazooka to kill an ant. The public policy objective of ending long on-board delays is valid. However, unintended consequences of DOT’s rule are growing,” said Joshua Marks of Marks Aviation.  “There is no question the ant is dead – tarmac delays have ended.  But the collateral damage must be addressed quickly for this rule to be sustainable.”


“To put it another way, every day 3.5 tarmac delayed flights were eliminated this year, but the equivalent of 18 Boeing 737s were cancelled daily in the process,” Marks said.


The report, Summer 2010 Cancellations and the Five-Month Impact of the Three-Hour Rule, reveals that airlines cancelled 5,064 additional flights during the five months from May through September 2010 – 18% more than the same 2009 period – under the new tarmac delay rule.  Based on analysis of nearly 100 million lines of data, the report shows the strong connection between enforcement of the tarmac delay rule and unnecessary flight cancellations.


The report recommend several changes to how the rule is enforced and monitored, so that both long onboard delays and cancellations can be minimized. Those recommendations include clarifying inconsistent and conflicting rule language, providing fine and enforcement guidance to airlines, improving airline-to-air traffic control communication during onboard delays, collecting tarmac rule cancellation details from airlines, and postponing expansion of fixed tarmac time limits to international airlines and small airports until cancellations are brought under control. The consultants do not recommend ending the rule until enforcement changes allow a true assessment of costs and benefits.


Individual Exhibits


    Exhibit 01 - On-Time Performance.pdf

    Exhibit 02 - Cancellations Nationwide.pdf

    Exhibit 03 - Cancellations at Major Hubs.pdf

    Exhibit 04 - Departures, Taxi Delays and Cancellations.pdf

    Exhibit 05 - IMC Weather & Weather Conditions, by Airport.pdf

    Exhibit 06 - Cancellations by Cause and Phase, 2010 and 2009.pdf

    Exhibit 07 - Assessing Cancellation Trends YOY.pdf

    Exhibit 08 - Cancellation Phases by Airport.pdf

    Exhibit 09 - Historical Tarmac Delay Occurrence by Month.pdf

    Exhibit 10 - Tarmac Delay Trends by Phase.pdf

    Exhibit 11 - Gate Return Trends YOY.pdf

    Exhibit 12 - Cancellation Trends after Gate Returns.pdf

    Exhibit 13 - Cancellations by Airport, by Month.pdf

    Exhibit 14 - Cancellations by Airport, by Causal Factor.pdf

    Exhibit 15 - Taxi-In Times at Major Airports.pdf

    Exhibit 16 - Operations, On-Time and Cancellations, 15 Year History.pdf

    Exhibit 17 - General Systemwide Weather Conditions.pdf

    Exhibit 18 - Weather Summaries 2000-2010, NE USA.pdf

    Exhibit 19 - Weather Summaries 2000-2010, Southern USA.pdf

    Exhibit 20 - Weather Summaries 2000-2010, Midwest USA.pdf

    Exhibit 21 - Weather Summaries 2000-2010, Western USA.pdf

    Exhibit 22 - IMC Prevalence by Airport, 2000-2010, Daytime.pdf

    Exhibit 23 - IMC Prevalence by Airport, 2000-2010.pdf

    Exhibit 24 - IMC Conditions at Tarmac-Prone Airports YOY.pdf

    Exhibit 25 - Taxi-Out and Taxi-In Rates of Occurrence, 1995-2010.pdf

    Exhibit 26ABCDE - Incremental Pax on Cancelled Flights.pdf

    Exhibit 27 - Reporting and Non-Reporting Carriers.pdf

    Exhibit 28AB - Estimating Change in 3+ Hour Passengers.pdf

    Exhibit 29 - Causes of Cancellation vs. Phases of Flight (Matrices).pdf

    Exhibit 30 - Chart of Change in Cancellations by Cause.pdf

    Exhibit 31 - Chart of Change in Cancellations by Phase.pdf

    Exhibit 32 - Chart of Change in Airspace Cancellations by Phase.pdf

    Exhibit 33 - Chart of Change in Weather Cancellations by Phase.pdf

    Exhibit 34 - Chart of Change in Carrier Cancellations by Phase.pdf

    Exhibit 35 - Airport % Change in Weather.pdf

    Exhibit 36 - Airport Change in Flight Cancellations.pdf

UPDATED MARCH 29, 2011

TARMAC III: DEBUNKING DOT’S CLAIMS

DOT’S OWN METHODOLOGY SHOWS

CANCELLATION RATE INCREASE FROM THE RULE

Study Materials


    Overview Presentation (March 29, 2011)

    Tarmac III Presentation.pdf


    Executive Summary (March 29, 2011)

    Executive Summary.pdf


    Complete Exhibit Set (March 29, 2011)

    Exhibits.xlsx


    Methodology, DOT Aviation Enforcement Office (March 17, 2011)

    DOT Methodology.pdf


    Updated 7pm March 29, 2011

    Additional exhibits available below.


Overview


In previous reports issued in July and November 2010, the joint research program of The Airline Zone Inc. and Marks Aviation LLC confirmed that the three-hour taxi time limit and the threat of punitive fines were driving thousands of flight cancellations.  The reports found that the rule, fines and conflicting regulations are causing significant consumer harm by forcing the cancellation of thousands of flights that would not otherwise be subject to egregious taxi times.


DOT denies any link between the three-hour tarmac rule, extreme fines and resulting flight cancellation rates, even in the face of consistent cancellation rate trends.  DOT recently released data which purports to show a decrease in cancellations post rule - but DOT fails to disclose that it used a sample set of radically different size in 2010 to make its comparisons.  Expressed on a percentage rate basis, DOT’s own data confirm - officially - that cancellation rates due to the tarmac delay rule have increased between 25 and 42 percent.


“DOT recently said that certain airline cancellations related to the three-hour tarmac rule are actually down year over year.  They intentionally do not state the cancellation rate, which shows a staggering increase,” said Darryl Jenkins, a noted author, professor of aviation and consultant to labor and airlines.  “Instead, they hide behind unequal and arbitrary sample sizes.” 


“The connection between the three-hour time limit, extreme fines, heavy-handed enforcement and cancellation rates is now clear,” said Jenkins.  “DOT insists on measuring cancellations only when long tarmac delays occur.  We use their approach to show, beyond doubt, the cancellation rate jump that DOT continues to deny.”


“There are immediate steps DOT could take to reduce cancellations while preserving the consumer protection intent of the tarmac rule,” said Joshua Marks.  “But DOT refuses to listen to industry, consumers or reason.”


Sample sizes used by DOT for counting cancellations are between 35% and 47% smaller in 2010 versus 2009. In one data set, DOT arbitrarily excludes thousands of cancellations without evidence or explanation. In another set, these cancellations are included. “That fails high-school statistics,” said Jenkins.


“Even DOT’s data sets and arbitrary methodologies show a 25% jump in cancellation rates due to the rule.  The time to debate whether the tarmac rule causes cancellations has ended,” said Marks. 


“Small communities bear the brunt of cancellations. Extreme per-passenger fines force airlines to prioritize larger aircraft where fine risk is greatest,” Marks said. “Hundreds of thousands of passengers on cancelled flights have had vacations ruined and business disrupted.  DOT must adapt the rule to prevent egregious tarmac delays without the collateral damage we see everywhere.”


The report calls on DOT to adapt the rule by creating a graduated fine structure per flight rather than assessing fines per passenger. The consultants repeat their call for a new tarmac delay cancellation code to better track airline decisions, and they recommend fixing the domestic rule before expanding it to international flights or small airports, where passenger re-accommodation times from cancellations are measured in days, not hours.


“We want DOT to be honest and forthright with the American public,” said Jenkins.


Additional Exhibits


BTS 2-Hour Tarmac Time Summaries (For Data Validation)

BTS 2-Hr Delays, 2009.pdf

BTS 2-Hr Delays, 2010.pdf


Summary of Key Hubs

Rate Change in Key Markets.pdf


Raw Data Set (For Database Users)

DataSetMayOct0910.zip


Small Community Summary Exhibit

Exhibit Q - Small Communities.xlsx


Passenger Impact Slide

Passenger Impact Slide.pdf