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30 Table 1.4. 2025 Airport flight delay cost estimates (1, 4, 5). 2025 Flight Costs 2025 Flight Costs On-time On-time 2003 2025 (2003 On-time (100% On-time Airport 2003 (%) 2025 (%) Boardings Boardings Benchmark) ($) Benchmark) ($) Baltimore, MD (BWI) 83 61 10,200,000 14,900,000 613,000,000 1,078,000,000 Boston, MA (BOS) 83 53 11,100,000 21,100,000 1,212,000,000 1,874,000,000 Las Vegas, NV (LAS) 85 54 17,800,000 32,900,000 1,899,000,000 2,828,000,000 Los Angeles, CA (LAX) 89 63 27,200,000 38,800,000 1,898,000,000 2,681,000,000 New York, NY (JFK) 83 58 15,900,000 27,800,000 1,343,000,000 2,220,000,000 New York, NY (LGA) 84 54 11,400,000 18,800,000 1,082,000,000 1,640,000,000 Newark, NJ (EWR) 83 48 14,800,000 25,000,000 1,617,000,000 2,418,000,000 Philadelphia, PA (PHL) 79 62 12,100,000 16,700,000 533,000,000 1,184,000,000 San Diego, CA (SAN) 88 63 7,700,000 14,400,000 667,000,000 989,000,000 San Francisco, CA (SFO) 89 66 14,400,000 20,800,000 910,000,000 1,344,000,000 Washington, D.C. (DCA) 88 60 6,900,000 12,400,000 639,000,000 923,000,000 Washington, D.C. (IAD) 82 79 8,200,000 12,800,000 82,000,000 504,000,000 157,500,000 256,300,000 12,496,000,000 19,682,000,000 to 100% on-time) is over $9.4 billion/year. When this is added To reiterate, the assumptions made in this section are to the $6 billion on-time costs and airline costs8 that are simply that the number of flight operations will increase in likely added to passenger fares as calculated in the Senate JEC proportion to the number of passengers (as projected in the report (8), the total comes to $15.4 billion/year in passen- FACT 2 study and assuming no significant changes in aver- gers' lost value due to delays at the 12 largest mega-region age aircraft sizes) and that delays will increase also in pro- airports. This amounts, on average, to $78 per passenger- portion (as estimated from statistical regressions of past trip at these airports. Of this, passengers would be willing to delays vs. flight volumes). Since FACT 2 passenger volumes pay a fare that is $48 higher, on average, to avoid the time are used as a base for these calculations, the relevant FACT 2 delays and additional inconveniences associated with delayed growth assumptions are incorporated. In addition, it is flights. The remaining $30/passenger is the amount that the assumed that there are not significant airport capacity airlines need to add to fares in order to compensate for their enhancement projects at the major airports nor any signif- higher costs due to delays. The aggregate costs are shown in icant capacity increase from NextGen initiatives nor any Table 1.3. policy intervention to reduce delays--in other words, a "do nothing" assumption. 1.6 The Costs of Doing Nothing 1.6.1 Future Costs of Delays at the It was requested that this project devote additional atten- Mega-region Airports tion to the economic and environmental implications of continuing on with the present pattern of degradation in The FAA's FACT 2 report (1) projects air traffic volumes service quality in the mega-regions. In conformance with this out to the year 2025. It does not, however, forecast the likely request, the research team has created a new analytical proce- delays associated with those volumes and with status quo dure that would examine the implications of having attained policies. There are, of course, many factors that could affect no solutions to the issues discussed in this project. The reader future delays, not the least of which are the rates of progress should be aware that these calculations are not based on the on NextGen implementation, changes in airport and airspace same set of assumptions as the FACT 2 study (1), which did configurations, and some of the policies described later in this explicitly deal with changes in capacity and operations that report. However, historical data can provide an indication of might (or might not) come into play between now and 2025. how on-time performance at each airport has affected flight Rather, the work of the research team predicts the future con- volumes given current and past conditions and operating ditions based strictly on the scenario that solutions are not policies. Monthly on-time performance and traffic volume found and implemented (see Figure 1.7). data were obtained from U.S. DOT/BTS data (5) for the period 2002September 2008 (the most recent month for 8 It is unclear from the document cited what fuel burn assumptions were made which these data were available at the time of the analysis). for the time that the aircraft is on the ground and not at the gate. However, this These data were used to develop a simple regression model is a small portion of the overall delay-related fuel burn. with on-time performance as the airport-dependent variable

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31 Cost in Billions Airports Note: Based on Tables 1.3 and 1.4. Figure 1.7. The cost of doing nothing: Increase in passenger delay costs 20072025, assuming no resolution of key issues. and the number of scheduled flight departures as the primary This amounts, on average, to over $130 per passenger trip at independent variable.9 This equation was used, along with the these airports in 2025, assuming that status quo operations FACT 2 airport traffic forecasts, to estimate on-time perfor- prevail. mance in 2025 at those traffic volumes. The results are shown Assuming also that the Senate JEC estimates for delay-related in Table 1.4. fuel consumption scale directly with increases in delays, these Between the years 2003 and 2025, the average on-time delays would generate an additional 17 million metric tons of performance at the 12 largest coastal mega-region airports is CO2 per year. estimated to decrease on average by 25 points. This assumes It is important to note that this represents the implied costs status quo operating conditions (no capacity increases, etc.) of doing nothing. The FAA's Airport Cost Analysis Guidance and assumes air traffic growth as projected in the FACT 2 suggests that aircraft operators might begin to modify sched- report. ules, adjust aircraft size, and take other actions to reduce Applying the 2003 on-time performance benchmark, this delays. However, one of the theses of this ACRP research is means that the aggregate perceived cost of missed flight con- that airlines in fact will not modify schedules and adjust air- nections and other costs across all boardings at the 12 airports craft sizes (up-gauge) of their own accord, absent policies that of the performance decline in 2025 is over $12 billion/year.10 explicitly incentivize such actions. It is assumed that each air- The absolute cost of the delays (compared to 100% on-time)11 line, acting in its own individual interest, uses airport capacity is almost $20 billion/year. Assuming that the Senate JEC delay in a way that consumes rather than protects airport capacity. costs scale up proportionally, the airline and time delay costs The problem lies with the concept that the aircraft operator would reach $14 billion/year. When these costs are added may have a greater tolerance for delay than the policy makers together, the total comes to $34 billion/year in passengers' seeking to establish a proper balance of throughput and sys- lost value due to delays at the 12 largest mega-region airports. tem delay. Chapter 5 explores this issue further, leading to the suggestions presented in Chapter 6. 9 The actual regression equation used percent of flights delayed as the dependent variable. It included constants to represent the unique conditions at each airport 1.6.1.1 Implication for the Themes of this Research and the weather conditions in each month. It included departures as both a lin- ear effect and the ratio of monthly departures to the maximum number of The magnitude of the effects of delayed flights both on monthly departures from that airport as a quadratic effect. passengers and on carriers should constitute a strong incen- 10 All 2025 costs cited here are in 2007 dollars. If the lower VOT used in FAA studies were applied to the 2003 benchmark assumption, a low-range estimate tive to address at least one of the root causes: congestion of about $9 billion would result. caused by flight schedules that approach or exceed airport 11 The research team agrees with the FAA that a 100% on-time standard for air capacity. Most experienced travelers are well aware of the service is not realistically attainable. The report provides estimates of passenger- locations and patterns of flight delays from their own per- perceived costs using 2003 delay levels as a "realistic" benchmark, but also shows the total cost of all delays for completeness and for comparison to the other costs sonal experience and may further inform themselves using as calculated in the JEC study (8). information from the numerous online sites that offer both