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Monday, December 10, 2007

DOT Pressure Stems Chronic Delays, Airlines Cut Capacity

Airlines have changed flight routes, added flight crews and are making additional aircraft available to stem the tide of chronically delayed flights and all it took was a Congressional mandate, pressure from the Department of Transportation (DOT) and a spate of enforcement actions. Related Story  Regional flights were often the top five most chronically delayed flights, but, as the industry knows only too well, their major partners are responsible for scheduling those flights.
“Tough scrutiny and a willingness to impose serious penalties have caused the airlines to correct these chronically delayed flights,” DOT Secretary Mary Peters said. “We will continue to be vigilant, and we will maintain our strong enforcement of these rules to help keep passengers from being treated unfairly.”
The subject of delays and DOT statistics were a large part of the recent Regional Airline Association meeting in Washington when participants learned that clarifying exactly who is responsible for scheduling, delays, cancellations and lost baggage is not a rulemaking that DOT is pushing and is probably more than a year away. Related Story
The investigation of 20 airlines was launched in May to determine whether the carriers were engaging in unrealistic advertising practices by publishing schedules for flights that almost never operate on time. DOT focused on chronically delayed flights - flights that were more than 15 minutes late, more than 70 percent of the time – over the first three calendar quarters of this year.
The Department identified 183 flights that were chronically delayed during the first quarter, and in May advised the 15 airlines that operated those delayed flights that they needed to take corrective action. In July, after the end of the second quarter, the six airlines operating 25 flights that were chronically delayed for two consecutive quarters were notified that if they failed to address these flights by the following quarter, they would face financial penalties of up to $25,000 per violation.
As a result, Secretary Peters said, by the end of September none of the chronically delayed flights from the first two quarters were chronically delayed in the third quarter. In addition, the investigation found that airlines are now monitoring chronically delayed flights more closely, and are taking a number of steps to correct chronically delayed flights.
The Secretary said the department also issued a proposal earlier this month to require airlines to create legally binding contingency plans for extended tarmac delays, respond to all consumer complaints within 30 days, publish complaint information online, and provide on-time performance information for their international flights in addition to their domestic flights.
The announcement was made at the same time DOT reported the nation’s largest airlines recorded lower rates of flight delays and cancellations this past October than during the same month last year but higher than those posted in September 2007, according to the Air Travel Consumer Report released today by the DOT’s Bureau of Transportation Statistics (BTS). The 20 carriers reporting on-time performance recorded an overall on-time arrival rate of 78.2 percent in October, better than October 2006’s 72.9 percent but below September 2007’s 81.7 percent.
The report also shows that these carriers canceled 1.2 percent of their scheduled flights in October, down from October 2006’s cancellation rate of 1.9 percent but slightly higher than September 2007’s 1.1 percent.
The carriers filing on-time performance data reported that 7.54 percent of their October flights were delayed by aviation system delays, compared to 5.89 percent in September; 6.62 percent by late-arriving aircraft, compared to 5.32 percent in September; 5.63 percent by factors within the airline’s control, such as maintenance or crew problems, compared to 5.25 percent in September; 0.64 percent by extreme weather, compared to 0.56 percent in September; and 0.05 percent for security reasons, the same percentage as September. Weather is a factor in both the extreme-weather category and the aviation-system category. This includes delays from FAA re-routing of flights. Weather is also a factor in delays attributed to late-arriving aircraft, although airlines do not report specific causes in that category.
In October, 39.83 percent of late flights were delayed by weather, down 1.44 percent from October 2006, when 40.41 percent of late flights were delayed by weather, and up 16.60 percent from September when 34.16 percent of late flights were delayed by weather.
Fuel prices may further mitigate the congestion and delay problem as airlines cut schedules for 2008, according to a report in USA Today, which did an analysis which showed American, United, Delta, Continental, Northwest and US Airways, have scheduled 4.4 percent fewer seats for January compared to the year-ago period. The cuts included their regional partners. However, reporters Barbara De Lollis and Barbara Hanson said that fuel and strategy do not account for the entire reason for cutting capacity. American has a high number of planes out of service, they said, in preparation for next summer.
“The year-to-year seat reduction by the big carriers means 72,000 fewer seats a day in the continental US at a time when the average domestic flight has been running about four-fifths full,” they said. “About three percent more people flew in the January-August period vs. the same period in 2006.” All of which means price and selection will be more of a problem, not to mention finding a seat on should a given flight encounter a problem.
The newspaper reported that Northwest will fly 20 percent fewer seats next year in both the Memphis and Minneapolis markets, but those schedules will shift capacity to regional aircraft; good news for Pinnacle and Mesaba but not for passengers who face large fare increases. United has scheduled 8.4 percent fewer seats for January than it did in January 2007, creating the deepest cut amongst the mainline airlines, according to the report. Delta, however, is holding steady with the same capacity as last January.
Meanwhile, the newspaper’s Dan Reed reported that business travel costs are expected to rise six percent next year. He cited the American Express Global Business Travel Forecast, which said the average cost of a domestic business trip — including airfare, lodging and car rental costs — will rise to $1,110 while international will rise seven percent to $3,171. While they may seem high, they are actually the smallest increases in the last four years, according to Reed, who noted they still beat the inflation rate which is expected to stay about 2.3 percent annually.
“In mid-November, business fares on the USA's 280 busiest routes were up eight percent year-over-year, according to data from price tracker Harrell Associates,” said Reed in his report. “The American Express forecast foresees an annual increase next year for international business-class fares in a range of five percent to 10 percent. For domestic coach fares, it projects increases in a range of one to five percent.
The National Business Travel Association reported that rather than cut travel, most businesses are tightening travel policies and limit business and first class travel. About 43 percent of its corporate members will be working more with discount carriers, double the rate of survey the organization conducted four years ago, according to Reed.