Tragedy of the airport.

The search for better economic policy.
July 25 2005 11:53 AM

Tragedy of the Airport

Why you get stuck for hours at O'Hare.

Are airlines causing flight delays on purpose? Click image to expand.
Are airlines causing flight delays on purpose?

Two weeks ago, Ken Mead, the inspector general at the U.S. Department of Transportation, predicted that this summer will be the worst ever for flight delays, with more than 25 percent of planes leaving late. Get ready to spend some time parked on the tarmac at the nation's busiest airports. Atlanta has the worst record this year, with more than 35 percent of flights delayed; Chicago's O'Hare ranked last in 2004 with 30 percent.

Mead cited rising demand as a cause of delays and also faulted the growth of low-cost carriers. But blaming low-cost airlines like Southwest and JetBlue for air-travel delay is exactly backward. The most important source of late flights at big airports is completely within the major airlines' control. In fact, the evidence shows the major carriers are creating the delays on purpose.

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At first glance, this seems crazy. The common explanation given for flight delays is that too many people are flying: The more air traffic, the more delays. That's what most economists say, too. This view of airport congestion makes it seem just like highway congestion. Each time an airline schedules a flight, it doesn't take into account the backups it causes by crowding the airspace. The dynamic generates a tragedy of the commons, in which each of the companies vying for runway slots has an incentive to overschedule.

The problem with this explanation is that it doesn't hold up. Take airports like Atlanta, Washington-Dulles, and Newark, which are dominated by a single carrier. If the tragedy of the commons theory bore out, then these airports would be less tardy, because a dominant carrier has an incentive to take into account the delays that it causes by crowding the runways. That's why the solution that economists always offer for the tragedy of the commons is to give one entity an exclusive property right. Yet Atlanta, Dulles, and Newark are among the top 10 tardiest airports in the country. In a study of more than 65 million flights over 12 years, economists Christopher Mayer at Columbia Business School and Todd Sinai at Wharton business school recently found only a small correlation between the dominance of a single carrier at an airport and the length of flight delays.

Mayer and Sinai's study also identified the real culprit: the deliberate overscheduling of flights at peak periods by major airlines trying to increase the amount of connecting traffic at their hub airports. Major airlines like United, Delta, and American use a hub-and-spoke model as a way to offer consumers more flight choices and to save money by centralizing operations. Most of the traffic they send through a hub is on the way to somewhere else. (Low-cost carriers, on the other hand, typically carry passengers from one point to another without offering many connections.) Overscheduling at the hubs can't explain all delays—weather and maintenance problems also contribute. But nationally, about 75 percent of flights go in or out of hub airports, making overscheduling the most important factor.

American Airlines, for example, uses O'Hare as a hub and schedules a cluster of flights to arrive there from the east in the earlier afternoon. Another cluster leaves for points west and south soon after. In the 30-minute period between 2:45 p.m. and 3:15 p.m., American has scheduled about 18 takeoffs, not counting its regional flights. That comes close to maxing out the airport's capacity, without any other airline. Other airports are even more extreme. Continental has seven flights scheduled to depart during the exact same minute (11:45 a.m.) out of Newark, as well as almost 20 other flights in the surrounding half hour. Some of these flights leave late more than 80 percent of the time. The major airlines know perfectly well that these hideous statistics are inevitable.

To cut down on delays, all Continental and American need to do at Newark and O'Hare respectively is to spread flights throughout the day. Continental does just that at O'Hare, because that airport isn't its hub. Without many connecting passengers to worry about, the airline studiously avoids the congested departure periods. But the hub carriers would lose passengers and money if they did this. Spreading out flights would leave some connecting passengers with long layovers, and everyone in the travel business knows that people won't pay as much for those tickets. Most people have a hard time figuring out which flights are leaving at overscheduled times, so they tend to avoid tickets that already have long delays built into them.

How can you avoid getting stuck on a late-leaving flight out of O'Hare? You've got three alternatives. If you are flying on a dominant carrier out of its hub, you can try to fly at a quiet time of day. To figure out when that is, you can download the airline's timetable from its Web site to check when flights to other cities are scheduled to leave. You could also fly on an airline that doesn't use O'Hare as a hub or on a low-cost carrier, both of which tend to avoid the crowded periods. Your last option is to take a deep breath and thank your airline for having so many connecting flights for you. If you're delayed, you're just paying the price of access to all those convenient choices. Of course, that doesn't help me, since I live here in Chicago and have 350,000 frequent flyer miles on American that I need to use.

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