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# Delays at Logan Airport Problem Set (Problem 1)

Problem #1 In the Delays at Logan Airport case, we discussed various proposals for reducing congestion at Logan Airport. One method for mitigating the impact of delays was peakperiod pricing. In the case, normal, good weather operation capacity (i.e., both arrivals and departures) hovered around 120 planes per hour. Assuming that the number of arrivals roughly equals the number of departures, this implies an average arrival capacity of 60 planes per hour. Though three runways total are in operation during good weather, only two are used for arrivals, which implies that each arrival runway has an hourly capacity of 30 planes per hour. During the peak period, arrival rates generally range from 44.5 planes per hour to a little over 60 planes per hour. The FAA has estimated that delays cost airlines around \$348 on average per plane per hour in both airplane operating costs and extra ground crew time for a 19 seat turboprop, and \$1,585 for a representative 150-seat plane. Assume that the corresponding cost for regional jets is \$640 per hour. This number does not, however, include the costs to airline passengers created by delays (such as missed meetings, events, or inconvenience), some of which may be borne by airlines in terms of foregone revenue, as frustrated passengers shift to alternative means of transportation or forego travel altogether. The Air Transport Association (a major airline industry group), has, however, used a \$25.70 per hour estimate as the value of apassenger's time in its estimate of annual delay costs. The FAA also only deems a flight delayed if the flight arrives or departs more than fifteen minutes past schedule. a. Assume normal, good weather capacity, and a 70% passenger load factor. Using the attached Excel exercise, what are the per plane delay times and operational and passenger delay costs associated with arrival rates of 50 planes per hour, for all three types of planes mentioned? At 55 planes per hour? At 59? b. How would your answers to a) change if we used the FAA's definition of delay? Does this definition of delay appear more or less reasonable? c. Based on your analysis, do you believe peak period pricing, by reducing arrival rates during periods of heavy demand, might represent an effective means of reducing the costs of over scheduling?

## Delays at Logan Airport Problem Set (Problem 2)

Clearly, peak periods exist for a reason; that is, they are not random fluctuations but rather exist due to passengers' desires for landings and takeoffs at certain choice periods during the day. As such, for fear of angering their customers, airlines will only shift flight to different periods during the day if the costs of incurring peak charges outweigh the cost (in terms of lost revenue) of shifting flights to off-peak periods. An operating expense breakdown for three airplane classes is listed in Exhibit 1. In addition, per passenger revenue for different aircraft sizes is listed in Exhibit 2. (Exhibits 1 and 2 are attached.) a. For which airplane types listed (conventional jet, regional jet, and turboprop) would a peak-period landing fee of \$100 have a significant economic impact? What about a \$150 fee? What about \$200? b. Based on your answer to 2(a), whether peak period pricing has a significant effect on the magnitude of delays my depend on the particular mix of airplane classes utilizing Logan during a peak hour. Do you believe peak period pricing would have a significant effect if the typical airplane mix were 40% turboprop, 18% regional jet, and 42% conventional jet, as it approximately stands at Logan? What about 20% turboprop, 30% regional yet, and 50% conventional jet, as one future scenario for 2015 envisioned by Massport/FAA hast it? c. To what extent might savings in delay costs that result from demand management offset peak period fees?

## Delays at Logan Airport Problem Set (problem #3)

Problem #3 In the case, we learned that adverse weather conditions are primary cause of delays at Logan Airport. When weather conditions deteriorate, or when winds from the northwest become moderately strong, Logan's capacity drops from three runways (where one runway handles both arrivals and departures, one runway only departures, and one runway only arrivals) to two (where two runways handle both arrivals and departures.) Arrival capacity in the former case averages around 60 planes an hour, and in the latter case (a situation that occurs on average 30 days a year), 45 planes an hour. When weather conditions are particularly severe (a situation that occurs on average 10 days a year), only one runway for both arrivals and departures is in operation at Logan, and total arrival capacity drops to 30 operations an hour. a. What would you expect to happen if arrival rates exceeded service rates during any one period at Logan? b. Assume Logan's weekday peaking pattern resembles the 2000 case shown in Exhibit 8 of the Delays at Logan Airport case, with arrival rates composing half of the operations per hour shown. For normal, good weather capacity--i.e., capacity of 60 arrivals per hour- what are the estimated delay times and delay costs for a plane landing at hour 17? What if Logan drops to two total runways in operations (each with an average capacity of 22.5 arrivals per hour each? What if only one runway (with an average capacity of 30 arrivals per hour) is in operation? You will need your Excel spreadsheet to answer this question.