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6 TRB DelayWorkshop Hansen

6 TRB DelayWorkshop Hansen

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1

Total Delay Impact Study
Mark Hansen, Thea Graham, Bo Zou,
Chieh-Yu Hsao et. al
TRB
January 11, 2009

2
Outline
Motivation
Goals and Scope
Results to Date
3
Impact of Aviation on the U.S. Economy
Aviation accounts for
– 11 million aviation-related jobs
– $1.2 trillion in economic activity
– 5.6 Percent Contribution to Gross
Domestic Product
– Adds $61 Billion to the U.S. Trade
Balance
The Aviation Industry contributes to the U.S. Economy and International Trade
4
Questions to be Addressed
What are the ripple effects?
Quality of life
Economic productivity
Global economic position
Transportation choice
Societal costs?
Environmental consequences
from uncontained delay?
5
Project Deliverables
Estimate the total cost of airline delay on the
economy and society
Direct costs including passenger and air carriers
Indirect costs, i.e. economic productivity, lost wages, etc.
Tertiary costs including societal and quality of life costs
Estimate the impact of aviation infrastructure
investment on US economic productivity
Final Report – January 2010

6
Approach
2007 as case study year
Quantify flight delays and related
metrics
Quantify passenger delays
Assess economic impact
Costs to airlines and passengers
Costs to other sectors
Firm-level case studies
Adaptation cast studies


7
Results to Date
Impact of flight delays on
passenger route demand
Impact of flight delays on airline
costs
8
Impact of Delays on Passenger
Route Demand
9
Introduction
The model
Predicts aggregate link flows from flows in particular city-pair
markets
Deals with demand generation and demand assignment in a
single model (consistent with random utility theory), and quantifies
“induced” air travel
Models both multiple routes and multiple airports within regions
Capture patterns of correlations among alternatives
Answer empirical questions
How is air service demand affected by causal factors, such as fare
and delay?
What are the welfare impacts of different scenarios, including
different levels of congestion and scheduled flight time?



10
The Demand Model
Model city-pair demand generation and its assignment
among airports and routes



City A City B
H1
H2
O1
O2
O3
D1
D2
Origin airport
Connecting airport
Destination airport
Travel by other
modes, or non-
travel
11
Estimation Results
• NL3B model is the preferred model
– Routes between two cities (within a
nest) are correlated
– A route is
 more likely to be substituted by another
route of the same O-D airport pair than the
routes of the other O-D airport pairs
 least likely to be substituted by the non-air
alternative
– Most coefficients are significant and
have expected signs

Non-
Air
O1
D1
NL3B
O1
D2
O1
H1
D1
O1
H2
D1
O1
H2
D2
O1
H3
D2
Air
OD Airport
Variable NL3B
-OLS
NL3B
-IV
Fare (hundreds of 2004 dollars) -0.160
***
-1.546
***

[0.005] [0.206]
ln(Frequency)—Direct
(flights per quarter)
1.337
***
1.240
***

[0.016] [0.029]
ln(Max frequency of two segments)—
Connecting (flights per quarter)
0.440
***
0.627
***

[0.009] [0.030]
ln(Min frequency of two segments)—
Connecting (flights per quarter)
0.822
***
0.957
***

[0.007] [0.023]
Scheduled flight time—Direct
(minutes)
-0.019
***
-0.004
[0.000] [0.002]
Scheduled flight time— Connecting
(minutes)
-0.019
***
-0.006
**

[0.000] [0.002]
Dummy for direct routes
(=1, if direct route)
3.874
***
6.066
***

[0.141] [0.397]
Positive hub arrival delay
t-1
(minutes per flight)
-0.002
**
-0.006
***

[0.001] [0.002]
Positive hub arrival delay
t-4

(minutes per flight)
-0.002
**
-0.007
***

[0.001] [0.002]
Inclusive value of level 3
(parameter=
a p
ì ì / )
0.937
***
0.664
***

[0.011] [0.014]
Inclusive value of level 2
(parameter=
m a
ì ì / )
0.711
***
0.795
***

[0.009] [0.010]
Inclusive value of level 2 *market
distance
-0.008
***
-0.012
***

[0.001] [0.001]
Market distance (hundreds of miles)

0.018
***
-0.024
***

[0.005] [0.005]
ln(market distance) 1.888
***
1.575
***

[0.048] [0.046]
Per capita personal income of market
(thousands of 2004 dollars)
0.015
***
0.038
***

[0.003] [0.003]
Constant (level 1) -17.316
***
-16.229
***

[0.116] [0.102]

12
System Delay Experiment:
Hub Delay
• The delay of the 30 hub airports reduce by 100%
• Changes in traffic (from NL3B-IV):
– Connecting routes: +6.6 million trips
– Direct routes: -1.9 million trips
– All air routes: +4.7million trips

13
System Delay Experiment
Impacts on LADC Market
• The delay of the 30 hub airports reduce by 100%
LA DC
ORD
ATL
+23,093
+6,437 (10.4%)
+6,941(15.4%)
+3,501(4.5%)
Other Hubs: +11,673(6.4%)
-12,985 (3.4%)
LAX
ONT
SNA
BUR
LGB
PSP
DEN
DFW
PHX
+3,884 (5.1%)
+3,643 (5.7%)
DCA
IAD
BWI
+9,472(1.6%)
+8,309(6.1%)
+3,770(5.1%)
+1,367(5.2%)
+786(5.1%)
-611(1.2%)
+1,605(0.6%)
+12,501(6.0%)
+8,987(2.0%)
14
System Delay Experiment:
Schedule Padding
• Calculated from individual flight data: ASQP (2004)
• For each route-quarter,
Padding time=
Average scheduled flight time -
20
th
percentile of actual gate to gate time
• Scenarios for schedule padding,
New scheduled flight time
=Average scheduled flight time - padding time
= 20
th
percentile of actual gate to gate time




15
Welfare Analysis
 User benefits approximated by the rule of ½





 is calculated from and fare elasticity of
market demand




ly. respective ts, improvemen with the and ut witho
market a of traffic the are Q and
ly; respective ts, improvemen with the and ut witho
market a of fare the are and where,
2 / ) )( (
1 0
1 0
1 0 1 0
m m
m m
m
m m m m
Q
P P
Q Q P P
¿
+ ÷
1
m
P
1
Q
m
16
Welfare Analysis
Scenarios
Net Changes
in Traffic
(Million
Trips)
Total User
Benefits
(Billion
Dollars)
Benefits per
User
($)
(1) Hub Delay
-100%
4.71 0.74 2.48
(2) No Schedule
Padding
7.62 1.17 3.87
(3) Both(1)
and(2)
12.60 1.98 6.44
17
Impact of Delays on Airline
Costs
18
Approaches to Estimating
Cost of Delays to Airlines
Cost Factor
Block-hr DOC (Schumer report)
Block-hr Total Cost (Schumer)
Airline/Airport/ANSP Surveys
(Cook)
Econometric
Economic Cost Function
Unit Cost Change Model
(Discussed here)


19
Unit Cost Change Model
Panel data
9 major airlines
17 years (90-07)
Use changes of cost and influencing
factors
Dependent Variable: % Change in
Operating Cost per ASM
Independent Variables (% or absolute)
Change in delay (using different metrics)
Change in other factors (e.g. costs)


it it it it
c | | | + A + A + = A ) factor other ( y_factor) punctualit ( * ) ost unit_opr_c (
2 1 0
20
Punctuality Factors
Arrival delay
Departure delay
In this study use difference in minutes
between scheduled
and actual arrival/departure time
On-time percentage
a flight is considered on-time when it
arrives less than 15
minutes after its published arrival time
Cancellation rate



21
Metric 1&2: dep./arr. delay
Dependent variable Independent variables Parameter estimates
(t-statistics)
R
2

Percent_cost_change Dep_delay_change
CCI_change
0.007296(3.15)
0.001771(2.98)
0.1281
Dep_delay_change
Percent_CCI_change
0.007759(3.35)
0.2046(2.68)
0.1186
Percent_dep_delay_change
CCI_change
0.0552(2.87)
0.001261(2.67)
0.1187
Percent_dep_delay_change
Percent_CCI_change
0.0586(3.05)
0.1782(2.29)
0.1078
arr_delay_change
CCI_change
0.007429(3.03)
0.001930(3.27)
0.1239
arr_delay_change
Percent_CCI_change
0.007675(3.11)
0.2182(2.86)
0.1097
Percent_arr_delay_change
CCI_change
0.0831(2.94)
0.001928(3.26)
0.1211
Percent_arr_delay_change
Percent_CCI_change
0.0851(2.99)
0.2155(2.81)
0.1057
22
Estimating total delay cost
Our
Estimation
ATA (2007) Schumer (2008)
Cost Factor
Approach
Cost Factor
Approach
Total Cost Approach
Measure of
Delay
A
Arrival delay
> 15 min
C D A B C D
Total
Airline-side
Delay Cost
(billion $)
8.82/9.10
(10.9/11.3)
8.09 3.6 6.1 12.2 21.7 19.1 23.4
delay / cost/cost) (
1
A A = |
( ) ) ASM Total ( * ]
1
1 [ * ) cost unit current ( cost delay total
) delay arr. avg. ( *
1
|
e
÷ =
A: Difference in minutes between scheduled and actual arrival time. Early arrivals set to 0.
B: Actual elapse time-5
th
percentile of observed elapse time for given segment in a given month.
C: Delay leaving the gate +delay during taxi (relative to FAA nominal taxi times) + (airborne delay relative to smaller
of flight plan and block time minus nominal taxi times).
D: Delay leaving the gate +delay during taxi (relative to FAA nominal taxi times) + (airborne delay relative to 5
th

percentile of observed airborne time for given segment in a given month).

23
Estimating marginal delay cost
at a system level
“Diseconomies of scale”: airlines would suffer more for
marginal increase of delay when delay is at a higher level

24
Estimating avg. delay cost
($/min)
delay / cost/cost) (
1
A A = |
( ) ) capacity seat avg ( * ) length stage avg ( * )
$
( * cost/min delay
1
ASM
| =
Our approach
ATA,
2007
Barnett et
al. 2001
Cook et
al. 2004
ITA, 2000
9 airlines
System-
wide
Delay cost
for airlines
($/min)
87.6/90.5 81.7/84.4 60.46 51.70 60.4 78.5
market-dominant airlines tend to suffer more from
delays than do carriers of relatively small size
25
Summary of Cost Estimates
Approach Metrics
System-wide
cost
Our approach
Model 5/6 Arrival delay type A 8.8/9.1
Model 13~16 On-time percentage 8.0/8.2/9.2/9.5
Model 19/23 Cancellation 2.4/2.7*
ATA (2007) Cost factor based
Arrival delay > 15
min
6.9**
Schumer (2008)
Cost factor based
Arrival delay type C 3.6
Arrival delay type D 6.1
Total cost based
Arrival delay type A 12.2
Arrival delay type B 21.7
Arrival delay type C 19.1
Arrival delay type D 23.4
Cancellation cost
Our estimate of system-wide delay cost is in the range of $ 8-9.5 billion.
If cancellation is taken into account, total cost reaches $10.5-12 billion.

26
Future work
Airline/Aircraft type cost data
Additional explanatory variables
Other punctuality metrics
Variance of delay
Long delays
Diversion
Incorporating buffer delay

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