Research Focus

:: Air Traffic Management and Control
:: System Performance Studies and Metrics
:: Aviation Economics and Policy

Project List

:: Tarmac Delay Rule
:: Oil Price Impact
:: Air Cargo Delays

Research: Aviation Economics and Policy


Project Summaries:

The following are the NEXTOR II research projects in the area of Aviation Economics and Policy:

An Analysis of the Tarmac Delay Rule

Sponsor: Air Traffic Organization, System Operations Services

Participants: Massachusetts Institute of Technology

The aim of this project is to understand and evaluate how policies and trends in the airline industry impact passenger delays in the US National Aviation System. In particular, we are investigating the USDOT Tarmac Delay Rule, which went into effect in April 2010, as an effort to curb lengthy delays during the taxi-out and taxi-in phases.

In this work we attempt to analyze the effectiveness of the rule from a passenger-centric point of view. Using the Passenger Delay Calculator, developed at MIT, and testing a range of assumptions on cancellation decisions by airlines, and passenger re-booking times, we perform sensitivity analyses using USDOT data from 2007 and one quarter of booking data purchased from a large legacy carrier to validate the model. As of now, we have obtained passenger delay results for several days in 2007 assuming hypothetical scenarios where the tarmac delays rule existed for those days; the same analysis will be performed on days in 2006 and 2008-2011 once purchased itinerary data for those years becomes available. The results suggest that while the rule has been a highly effective deterrent for airlines to keep tarmac times under three hours, passengers are faced with the tradeoff of foregoing long tarmac delays and enduring cancellations and rebookings, or experiencing longer tarmac delays but shortened delays in arriving at their destination.

Oil Impacts in Aviation

Sponsor: FAA ATO

Participants: University of California Berkeley, MIT and Virginia Tech

High oil prices continue to be a problem for all aviation users. This projects attempts to understand the overall economic impacts of oil prices to commercial aviation including passenger, cargo and general aviation users. The project also studies how oil prices impact air traffic control operations and air traffic management policies.

Specifically, Virginia Tech has developed a series of statistical and life cycle cost models to evaluate the impact of oil prices on general aviation users. UC Berkeley is doing the same for cargo operators and MIT for commercial operations. Virginia Tech is also developing national level economic modeling tools to understand the impacts of oil prices into the economy. Virginia Tech has briefed the FAA and GAO on the models developed and is sharing data sources and information with GAO as they study similar impacts by a Congressional mandate.

The models developed will be used by FAA to direct investments analysis and policies.

Cost of Delay to Cargo and Overnight Package Delivery Firms

Sponsor: Air Traffic Organization

Participants: University of California Berkeley

Duration: On-going

The Federal Aviation Administration is engaged in a comprehensive overhaul of Air Traffic Management (ATM) and the National Airspace System (NAS) known as NextGen. NextGen promises to enhance the safety and reliability of air transportation, to improve efficiency in the NAS, and to reduce aviation’s impact on the environment. As part of the investment planning process for NextGen a large number of cost-benefit analyses and trade-off studies need to be performed, to better allocate the limited resources available and to justify the program to Congress and other aviation stakeholders. When conducting such studies the FAA uses models of the NAS, and estimates flight delays, fuel burn, cancellations, and other relevant operational metrics with and without particular investments, technologies, and procedures. The differences in the values of these metrics are then converted to economic terms to facilitate comparisons with the costs of implementing the technologies and procedures.

Much research has been performed into the cost of delay on airline operations. One way to value the cost of delay is by using aircraft direct operating costs (ADOC). A great deal of data already exists on ADOC for all types of commercial aircraft, used for both passenger and cargo service. In addition to ADOC, when passenger flights are delayed, these delays can also be assigned an additional cost based on their impact to passengers, using Department of Transportation (DOT) guidance on passenger value of time (PVT). Unfortunately, a similar concept does not exist for cargo flights, even though we believe that there is a “business cost of delay” for these services.

For overnight package services such as UPS and FedEx, if packages arrive sufficiently late to their hubs, then they can miss the “sort.” This means that they likely will be delayed an entire day, until the next evening’s sort. Because these operators offer on-time delivery guarantees to their customers, large delays may have significant consequences, while small delays may have very little impact at all. The FAA requires research into means to estimate the cost of delays to operators such as UPS and FedEx.

UC Berkeley will study the magnitude and impact of delays on overnight and other cargo carriers. They will identify ways to estimate package delays using flight segment data such as that available to the FAA from operational databases and produced by NAS-wide simulation models. Additionally, they will investigate the business costs incurred to the carriers as a function of the lateness of the shipments.