(Co-authored with Timothy O’Neil-Dunne)

Lost in the was a pause in an ongoing epidemic of almost Biblical proportions. We are talking about the US practice of bluffing true flight times AKA schedule padding. With the resurgence of planes in the sky as we emerge from lockdowns – yes – schedule padding is BACK BABY!

Airline schedule padding has a real cost.  Based on US DoT data, we estimate that in 2019 the nine largest US airlines could have bought (for cash) over 43 brand new planes (estimated at $60m each for a new narrow-body aircraft) from the time used for schedule padding.

Airlines operate in a tough environment.  Getting planes to their destinations within a reasonable time is one of the marvels of the modern age. There are many exogenous factors affecting every flight – from weather to shortages to tarmac congestion.  Airline managers have been able to use these exogenous factors as a blanket to hide operational inefficiencies.  While this may have been helpful to airline managers, it frustrates and represents a loss of value to shareholders. And there is not an insignificant impact on the environment from running engines longer than necessary, dare we point out.

The DoT 15 Minute rule

In 1987 the US DoT implemented on-time reporting – arising out of frustration by the US Congress of airlines’ poor on-time performance. To make this more reliable the definition of “On Time” was defined as within 15 mins of scheduled departure or arrival time. GDS display algorithms penalized poor-performing flights.  Congress mandated the “name and shame” of poorly performing carriers.  

But airlines quickly realized they could keep their on-time performance on track if they just fudged schedules. Take a look at CRS times compare with actual times between New York and Miami as an example.

In case you wonder what those “missing minutes” are worth, the following table gives you a guide.

Between 2016 and 1Q21 the average US domestic flight was 151 minutes duration, so a 15-minute “window” represents a 10% cover.  would your industry like a 10% error factor to (legally) allow you to claim you’re on time with a deliverable?  Does this industry really need 10% error? Let’s see what the leading clearinghouse of airline schedule (OAG) and on-time performance (OTP) data has to say:

Probably most people in the industry would accept that an OTP of 80% or above is pretty good. That’s 4 in 5 flights arriving within 15 minutes of their scheduled arrival time. The very best airlines and airports succeed in punctuality closer to 90% – but they remain the exception rather than the rule.

Going much beyond 80% of flights on time will be easier for some than for others. Operating at congested airports and in congested airspace will make it harder. And as climate change begins to create more chaotic weather conditions, and storms, in particular, keeping to schedule will be harder.

Achieving OTP well above 80% requires focus but there may be a point where striving towards ever higher OTP may be detrimental to the bottom line. The benefit of incremental improvements may be outweighed by the cost of achieving them. 

The global airline trade group, IATA, provides a classification of over 80 delay codes. Thus the problem is not one of the data, but rather a manipulation of its meaning.

Combining Data

The US DoT has the most granular level of airline operational data in the world.  For analysts (including these authors) this is a rich source providing excellent insight into the operations of the airline industry.  It also acts as a global benchmark for airlines outside the US.

But factoring back in the padding (average of all major over six minutes per domestic flight) shows something different in the actual behavior. (For those of you interested in eye-popping math: For 2019, multiply $89/operational minute x 6 minutes x 4,415,800 flights for the dollar impact)

As can be seen, when factoring back in the specific padding, averaged for each airline domestic systemwide, the picture changes. And SURPRISE, some airlines appear to be missing the 15-minute target.  Airlines above the red dashed line are late.  So, the next time your US domestic pilot proudly proclaims he arrived early, smile a little smile and hum Fleetwood Mac’s “Little Lies”.

There are several questions that should be asked of the US airline industry:

  1. should shareholders react knowing there is so much slack in schedules?
    1. Flight operations are clearly sub-optimal
    2. And the data suggest the problem is getting worse
  2. much could the economy have benefitted from the US airline industry having less schedule padding?
    1. much would the economy benefit from better schedule efficiencies?
    2. much are travelers paying for this lost time? What is that time worth?
  3. The average real schedule delay tells us aircraft engines are running longer than they should be.
    1. What is the environmental cost of this?
    2. What can the airline industry do to improve or fix this?
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