Could Help Solve the NYC Congestion Conundrum
Business Travel Coalition (BTC) has recently concluded due diligence, including a month-long survey of business travel industry professionals, to determine if it should support passenger rights legislation contained within S.1451, the FAA Air Transportation Modernization and Safety Improvement Act. BTC endorses this language introduced by Senators Barbara Boxer (D-CA) and Olympia Snowe (R-ME). In particular BTC unequivocally supports the provision that would provide passengers with an option to disembark after three hours of delay, should a captain decide it is reasonable and safe to do so.
Since 1999, BTC has testified four times in Congress in opposition to passenger rights legislation. In lieu of Congressional intervention in the marketplace, anathema to businesses whose interests BTC represents, BTC called for the voluntary airline Customer Service Plans that was announced in September 1999. In testimony in March of that year, however, as well as in follow-on testimony throughout the years, BTC cautioned that if the airlines do not fix service and extended ground delay problems, someone will eventually endeavor to do so for them.
From BTC’s 1999 testimony: “Like other industries that have faced the ominous threat of government intervention, airlines should view this legislation as a major warning and move decisively to address Congressional concerns. The industry needs to take immediate steps to head off this and further Congressional action, which will surely follow, if the industry’s problems are not corrected in the near term.”
II. BTC SURVEY
As part of its due diligence, BTC conducted an online survey of travel industry professionals and business travelers and follow-up in-person and phone interviews between July 26 and August 31, 2009.
- The survey was distributed to 7,000 randomly selected participants from BTC’s electronic community of 35,000.
- Some 674 persons completed the BTC survey including:
- 198 corporate travel managers,
- 123 travel management company executives,
- 25 airline staff,
- 187 business travelers, and
- 141 “other,” which includes travel professionals from hotel, credit card, consultancy, technology, rental car, payment systems, limo and destination management companies as well as representatives from academia, state and federal government, labor and industry associations.
- Underscoring the concern of global travel departments looking after their nationals traveling through the U.S. aviation system, survey participants represented the following 12 countries: U.S., Canada, Belgium, South Africa, UK, United Arab Emirates, Germany, Thailand, Sweden, Finland and Italy.
Key Survey Results (Summary results, with survey participant comments, can be found at Addendum 1; complete and filtered quantitative results by participant segment can be found at Addendum 2.)
- 91% of survey respondents indicated addressing extended tarmac delays should be a priority for airlines to address.
- 85% of those surveyed conceptually support passenger-rights legislation.
- 82% of survey participants support proposed Senate legislation that would allow passengers to disembark after 3 hours of on aircraft delay, should a captain decide it is reasonable and safe to do so.
- 85% think U.S. airlines have not done enough in the past 10 years – allowing for all their cost constraints – to improve customer service levels.
- 77% say airline customer service – broadly defined – has not improved at all in the past 10 years.
- 80% believe airlines have not made a compelling case against passenger rights legislation.
- 64% indicate they believe that airlines will not endeavor to voluntarily improve customer service levels to an acceptable degree.
- 55% think airlines will not, via an industry-wide commitment, codify passenger-rights commitments and obligations in contracts of carriage.
- 85% stated Business Travel Coalition should weigh in on the efficacy of passenger rights legislation, and support it.
A. Uneven Progress
After 10 years of Congressional pressure on airlines as well as highly unfavorable press reports of nightmarish delays and conditions for passengers, the response by the airline industry has been uneven, as confirmed in U.S. DOT Inspector General reports to Congress. While some airlines have taken limited positive steps on behalf of their customers, at the industry-level airlines appear either unwilling or unable to fix this extended ground delay problem.
B. Market Failure
Based upon BTC survey and interview results it is clear that the vast majority of travel industry professionals and organizations, including BTC, has now concluded in this case, i.e. more than 10 years after the infamous Detroit Metro snowstorm debacle, that there is an evident market failure that can only be addressed by government intervention. Congressional legislation appears to be the preferred option over proposed U.S. Department of Transportation (DOT) rules in light of airlines’ history of legally challenging DOT regulations they are not in support of.
C. Nature of Problem
To focus the debate on root causes, such as bad weather or antiquated ATC technology, is to avoid discussing the real problem which is how airlines respond to irregular operations, which they often cause by over scheduling. Likewise, to blame mishaps on the poor judgment of individual airline employees, as was done in the Rochester, MN case, is to miss the larger, structural leadership failure at the individual airline and industry levels. If airline CEOs were as focused and committed, for example, as they were after 9/11 in securing from Congress, in just days, $5 billion in direct payments and $10 billion in federal loan guarantees, the problem would have been solved many years ago.
D. Scope of Problem
According to DOT, 613 flights experienced extended tarmac delays of 3 hours or more during the first 6 months of 2009. Members of Congress, the U.S. DOT Inspector General, consumer groups and travel industry organizations are not seeking a one-size-fits-all solution.These stakeholders understand that it is not desirable or possible to solve for 100% of extended-tarmac-delay problems, and that no two airports or irregular operations are the same. The fact that some airlines, operating in many airports under various conditions, have instituted hour-specific passenger-deplaning guidelines indicates they have become analytically comfortable with a protocol wherein one size fits most extended ground delay problems. That’s all that passengers want codified in law so that there are consequences and incentives for improvement in outcomes for incidents like Rochester, MN or NYC.
E. Unintended Consequences
To say there would be unintended consequences from a Congressional law is stating the obvious. There are always benefits and drawbacks from any public policy decision, some anticipated, and some not. The question is whether the problem is worth solving at a governmental level, and on balance, if the solution would likely generate public policy benefits sufficient to effectively solve the problem. Currently, the airline industry policy of denying there is problem is generating its own set of serious unintended consequences, including negative impacts on the health and welfare of passengers, lost productivity for business travelers and diminished airline brand quality.
It seems that no matter where in the world passenger rights standards are proposed, opponents drag out the dire but fatigued “unintended consequences” warning. For example, a spokesman for the Air Transport Association recently told the San Francisco Chronicle, "I promise you that if a three-hour rule goes into effect, we'll be having this conversation again and talking about the unintended consequences..." And in Europe, the International Air Transport Association and the European Low Fares Airline Association claimed that the now-implemented EU passenger rights regulations would limit consumer choice.
The sky, it turns out, did not fall in Europe. An EU-based travel management company CEO interviewed by BTC stated, “The EU regulations on flight cancellations and delays were expected to increase costs without much benefit to passengers. However, it seems not to have had that result. My experience is that vague reasons for cancellations have disappeared, and that the airlines will re-route and provide overnight accommodations when technical reasons prohibit them from flying. Compensation for cancellations is paid without argument.”
F. Statistical Insignificance
Airline industry spokespersons characterize the aforementioned 613 flight delays of 3 or more hours as statistically insignificant even though some 100,000 passengers were impacted. The argument that extended ground delays are statistically insignificant is lost on the daughter who had her eighty-five year old father parked in a hot metal tube for five hours in August; this is first and foremost a health and safety issue.
The deadly February 12 crash near Buffalo, NY was also statistically insignificant, but we rightfully investigated, held hearings and will no doubt tirelessly endeavor to learn important lessons and improve upon crash statistics. Passengers and their advocates expect a high level of determination should also be brought to bear on the growing problem of extended ground delays.
This is first and foremost a health and safety issue. We spend hundreds of millions of dollars endeavoring to incrementally improve upon aircraft accident statistics. Why should passengers accept less with respect to the 613 reported incidents during the first six months of 2009 in which passengers spent greater than three hours on grounded planes?
As one former major airline CEO recently told BTC, “Beyond 3 hours, the airlines need to fix the problem, and if they are forced to do so, they will.” Implied in this statement is that if airlines are given sufficient time before implementation of passenger rights legislation, e.g., 6 months, they will likely identify the key operational barriers and work to emplace policies and processes to overcome them before implementation.What’s more, according to DOT's 116-page impact analysis of proposed passenger protections (Sept. 2008), airlines stand to benefit from new efficiencies generated by the process-redesign required to solve for the extended ground delay problem. A 3-hour single standard needs to be legislated that will generate benefits for all stakeholders.
IV. SINGLE-STANDARD BENEFITS
Each year approximately 100,000 passengers, many of whom are infants, elderly or suffering ailments, are confined in unhealthy conditions aboard excessively delayed aircraft. A single standard would provide an important safeguard for the health and welfare of passengers.
Large organizations that fund business travel activities would benefit from increased business traveler productivity as airlines respond to a single standard with new, more efficient processes and fewer extended onboard delays.
Excessive ground delays and customer service meltdowns result in bad publicity and a failure of an airport authority’s core mission to facilitate passengers throughout the aviation system. A single 3-hour standard, with attendant financial penalties, would force airlines to address this problem.
Flight crews aboard excessively delayed aircraft would benefit by avoiding suffering through the same unhealthy conditions as passengers (probably more often) as well as the additional mental stress caused by having to often deal with upset customers in an operating environment without bright-line go, no-go parameters.
Over the past few years, the airlines, as a collective brand, have damaged their image, weakened the customer value proposition, and no doubt, consequently decreased their pricing power. A single 3-hour standard will help them help themselves.
Helping Solve the NYC Congestion Conundrum
While the 3 NYC airports and the Philadelphia airport can typically amount to some 12% of the Operational Evolution Partnership (OEP) 35 operations, they can cause more than 45% of the delays and 48% of the delay minutes throughout the National Airspace System (NAS) resulting in material financial, lost-productivity and environmental costs for all stakeholders.
The delays are chiefly caused by the over scheduling of flights where the demand exceeds capacity at critical times of the day, using many regional jets (70 passengers and below) instead of fewer larger jets, and an increase in non-air carrier operations, such as private jets.
Solutions for the over-scheduling problem at NYC have either been (1)politically unpalatable, such as slot auctions, (2) impossible to develop and implement because of antitrust laws, or (3) competitively unfeasible because airline “A” would not unilaterally reduce its schedule only to have airline “B” fill in and increase its market share, and in some cases raise airport-costs for airline “A.”
With a rule in excess of 3 hours (preferred by airlines) they could likely ignore the consequences of potential fines in order to maintain market shares at NYC, and elsewhere. Importantly though, according to industry experts, a 3-hour rule could only be workable for NYC airports if airlines drew down their schedules to better match the capacity limitations of the airports. If they did not, political pressure and horrendously bad publicity from so many delays would be a weekly event with attendant calls for further government action. Airlines would have very strong unilateral incentives to right-size their NYC operations during the many months before such legislation were to become effective.
Reduced NYC airline flight schedules may not cost airlines lost revenues, especially if a single flight can replace several small regional jets. Additionally, an improved pricing environment from reduced capacity would be an offset as would significant operational benefits from more efficient system-wide operations across the U.S. Moreover, with airline industry capacity and operations declining now would be an opportune time to test this hypothesis before demand returns in full force.
A 3-hour deplaning option for passengers should represent the maximum Congress should consider when the Senate and House conference on this legislation. 3 hours is too long for most persons to tolerate sitting in a sealed metal tube; but it is likely within the margin of safety. Anything greater than 3 hours is risky.
A passenger’s chance of fatal blood clots increases at 4 hours on the tarmac (UN WHO WRIGHT report 2007). These events are usually accompanied by some amount of dehydration and lack of available, potable hydration. An EPA water report in 2008 stated that 17% of all airplane water tested had true coliformin it and recommended that elderly passengers, children or anyone whose underlying health condition is compromised (which DOT says is 20% of all passengers) not drink the water. A 3-hour maximum with a 30-minute extension provides passengers with the best possible scenario for avoiding exposure to these risks.
·1 in 7 Americans are diagnosed diabetics, with 3.89 per hundred classified as undiagnosed diabetics. Being deprived of glucose or medications beyond 3 hours is life threatening for many with diabetes.
·30% of all Americans have some degree of claustrophobia, which would be mitigated by having the knowledge that they won't be "trapped" indefinitely.
·Elderly, disabled persons, children and anyone with compromised health will have the assurance they will be able to get their needs met in 3.5 hours.