(Republished with permission from the Business Travel Coalition.)
On April 29 a U.S. Department of Transportation rule goes into effect, after a 120-day notice, requiring U.S. airlines to provide passengers an opportunity to deplane after three hours on the tarmac on most commercial aircraft, providing it is safe and operationally feasible to do so. Earlier this year, Business Travel Coalition cautioned DOT that a 120-day implementation period was entirely inadequate. Likewise, BTC encouraged airlines to finally step up and seriously address passenger problems. Nothing has happened.
In watching CNBC and reading reports from analysts’ conferences, one could form the distinct impression that a large-scale, preemptive public relations strategy was being rolled out by the airline industry ahead of a potentially troublesome spring and summer travel season. In the face of potential $27,500 per-passenger fines for extended tarmac delays, airlines are blaming the DOT for coming travel disruptions resulting from flight cancellations, especially in the New York City market. Airlines, however, cannot say they were not warned.
Airlines were cautioned in multiple Congressional testimonies beginning in 1999 that if they did not address passenger concerns, someone would do so for them, and the outcome might not be desirable. So to cry foul now rings hollow. The crux of the problem is not weather-related irregular operations; They happen. Rather, it is how airlines respond to them that matters. Airlines’ unpreparedness—and some say unwillingness—to take care of passenger needs during extended tarmac delays has been well documented, beginning with the Detroit snowstorm debacle in January 1999.
Airlines are now using a once-in-a-generation combination of the winter snow storms in February in the Northeast to suggest the 38,000 cancellations, passenger inconveniences, and millions of dollars of lost revenues could be attributed to the yet-to-be implemented DOT three-hour tarmac rule; and that February is a prologue for customer-service meltdowns to come, courtesy of your DOT. Importantly, even if the new DOT rule had been in effect during the February storms, it is exceedingly unlikely it would have applied, as pilots have to decide it is safe to deplane passengers and air-traffic controllers have to determine if such decisions would disrupt airport operations. Both criteria would no doubt have been in play under such severe conditions.
What’s more, it is unlikely the new rule will cause the kind of sky-will-fall cancellation scenarios being promulgated by airlines in the news media. Proactive cancellations are, in fact, needed at overscheduled airports, and communications technologies such as text messaging are improving customer service before and during irregular operations. To the extent unacceptable spikes in cancellation levels do occur, it will not be a result of the new tarmac rule, but rather that the underlying problem of overscheduling has not been effectively addressed.
To be fair to airlines, DOT was over zealous in its proposed maximum fine of $27,500 per-passenger for an airline that keeps passengers on board longer than three hours without taking off. To convey, as DOT has, that the $27,500 fine is just for extreme-delay cases, which will be subjectively determined by staff at DOT, is problematic. To provide just 120 days for airlines to plan an extensive re-engineering of their systemwide schedule planning and operations is unfortunate. And to do so at JFK, which has runway construction scheduled through June that is expected to affect half of its departures, is regrettable.
As they consider how to respond to the new DOT tarmac rule, airlines essentially have three options:
1. Business As Usual. Airlines can take their chances with DOT fines that could total in the millions of dollars per aircraft and try to manage through the coming busy travel season against a system with fewer seats and aircraft to respond to and recover from irregular operations. Complicating this option will be runway construction at JFK that overlays the spring and early summer increase in air travel.
2. Systemwide Reengineering. At the New York City–area airports, for example, the three-hour rule will be unworkable without serious reengineering efforts, such as reducing schedules, deploying larger aircraft, moving demand to non-peak periods, shifting flights to secondary airports, and radically adjusting policies, processes, and practices. Given that New York airports are directly or indirectly responsible for 75 percent of delays across the entire U.S. system, fundamental changes in New York will necessarily affect airlines’ schedules throughout U.S. domestic and international systems. Essentially, airlines will have to take a total systems view as they reconfigure the approach to their business. However, providing airlines only 120 days to implement the three-hour rule rules out this option for the coming busy travel season.
3. Ad Hoc Depeaking. Airlines know they are overscheduled, especially at New York City airports, but they have neither the time, nor perhaps the will, to rationalize their schedules and operations. Proactively canceling lots of flights ahead of severe weather systems will be a stop-gap measure for rationalizing their schedules, allowing maximum peak scheduling during normal weather operations and reduced scheduling during severe weather.
So, when the airlines go on CNBC and say the new DOT rule will cause many more cancellations, that is the truth. However, what they leave out is that the immediate cause of many cancellations may be the three-hour rule and threat of heavy fines, but the fundamental cause, which remains effectively unaddressed, is the severe overscheduling of flights at these airports.
DOT will respond that airlines have scheduling options to allow them to avoid the $27,500 per-passenger fines. Of course, they will be right, too. But DOT will leave out that instead of providing airlines with nine to 12 months to reengineer exceptionally complex domestic and international systems, they provided only four months. They will also likely sidestep any accountability for knowing the passenger problems that will likely emerge when this tarmac rule is combined with JFK runway construction and the tight and unforgiving industry seat and aircraft capacity constraints.
How will market and political forces likely respond to these potential problems? Airlines and DOT will equally share in the blame. Airlines will be blamed for dismissing the concerns of their customers and of Congress for over a decade. DOT will be blamed for being asleep at the passenger-protections switch during the same time, and for not enabling a thoughtful reengineering of airlines’ scheduling and operations.
As a result, where dissatisfied customers have choices to support airlines that manage through these difficulties in a more passenger-sensitive manner, they will move their business. However, political pressure will likely overtake a relatively slow-moving market response, with members of Congress advocating legislative solutions to what they perceive as flawed DOT policy and continued obstructionist responses from airlines. Of course, the risk here is additional bad decisions that passengers will ultimately pay the price for.
There is still time to avoid these problems. Airlines need to abandon their preemptive blame-game public-relations strategy. DOT needs to use the consumer goodwill and prestige they have acquired through Secretary LaHood’s leadership on this and other passenger-protection issues and guarantee the rule’s ultimate success by extending the time for planning and implementation.
No matter the implementation time frame, a drawdown in schedules at New York City–area airports is exceedingly difficult for airlines to accomplish unilaterally, for competitive and legal reasons. The Port Authority of New York & New Jersey should take a leadership role (with support from the governors of New Jersey and New York as well as the mayor of New York City) and make the case for DOT-administered and U.S. Department of Justice–monitored meetings among airlines to adjust schedules. The alternative could be chaos and further erosion of business travel and tourism.