Flight Delays Cost Passengers Billions

The Federal Aviation Association (FAA) heard from researchers this week claiming that airline passengers lose $16.7 billion annually due to flight delays.   

When a flight is delayed for an hour or so, people get hungry and spend unnecessary money on food. When the delay is more substantial, there are souvenir shops, taxi rides, maybe even hotel rooms…all acting as vacuums, sucking nearly $17 billion of wasted money out of passengers’ pockets.

According to Mark Hansen, a civil and environmental engineering professor at the University of California at Berkeley who led the study, the report is the most comprehensive ever on the true cost of flight delays because of the method it used to calculate the costs. In an article in the Washington Post, he explained that earlier research stuck with the oversimplified equation that a plane with 100 passengers that’s delayed for 10 minutes costs 1,000 minutes in total. In reality, Hansen said, the ripple effects of that delay can be far worse for passengers, who lose much more than ten minutes if a connecting flight is missed.   

“We knew that passengers’ costs were being underestimated by using the more simplistic approach,” said Cynthia Barnhart, interim dean and professor of civil and environmental engineering at the Massachusetts Institute of Technology School of Engineering. “We didn’t know the large extent they were being underestimated.”

The total cost to passengers, airlines and other parts of the economy is $32.9 billion, according to the FAA-commissioned report. Researchers calculated that airlines spend $8.3 billion on higher expenses for their crew, fuel and maintenance.They also lose money by building delays into their schedules, causing them to run fewer flights. (This can also cause aggravation when you plan to have someone pick you up at a certain time, then, lo-and-behold! you arrive 30 minutes early…rare, but it happens.)   

The report used data from 2007, when one in four flights arrived more than 15 minutes late. Researchers estimate that the delays hurt the country’s gross domestic product by $4 billion that year. However, things might be looking up-last week, the Transportation Department released statistics on August 2010 flight delays; the overall on-time arrival rate was 81.7%, up from 76.7% in July, based on data from 18 carriers.

To help with those 18.3% of flights that were late in August, the FAA will be overhauling aircraft navigation systems, replacing radar with Global Positioning System technology.  The program will cost tens of billions of dollars to install and the FAA is hoping to complete the project by 2025.   

(Is it disconcerting to anyone else that you can walk down the street and buy a GPS for a little more than $100 yet it will take the airline industry 15 years and tens of billions of dollars to do the same?)