Friday, October 5, 2007

ALL The Planes Are Late

I've been known to post a missive or two about bad customer service, and particularly about how U.S. Airways customer service really sucks. Now James Fallows links to this Patrick Smith's latest Salon "Ask the Pilot" column about why that plane is always late. According to Smith the answer is simple: the airport doesn't have enough slots to accomodate the number of takeoffs and landings at peak times. In particular, he thinks that regional jets are the big villain:

It's an airline scheduling issue, plain and simple. Carriers have created this mess through a self-defeating insistence that frequency of flights is the ultimate key to success. Over the past several years, they have portioned capacity onto smaller and smaller planes making more and more departures. The results of this strategy can be seen on any afternoon at airports such as JFK, Newark, LaGuardia and Washington National, where small regional jets (RJs) account for up to half of all takeoffs and landings. It is not the total volume of passengers slowing things down, it's the inefficient way they are divvied up. In some places, 50 percent of the traffic is carrying a quarter of the people.

How bad does it get? Two weeks ago I was working a flight from Europe to JFK. We landed shortly after 5 p.m. -- several minutes ahead of schedule, ironically -- only to spend the next two hours -- two hours -- taxiing from the end of the runway to our parking position. Our assigned gate was open and available the entire time, but the airport had become a spaghetti snarl of planes. Taxiways were blocked; aprons, clogged. It was literally gridlock -- with scores of 50- and 70-seat RJs jockeying for space with A340s and 747s.

Fair enough -- he's a pilot, and he can see and make sense out of what he sees outside his own window.

If you are like me (fat chance) your market-oriented libertarian instincts kick in: the obvious choice is simply to charge more for takeoffs and landings during peak periods. Yet Smith rejects this obvious solution:

So-called peak-period pricing is a popular and controversial idea, akin to levying heavy tolls on automobile drivers as a way of reducing downtown traffic jams. In cities like London, apparently, such disincentives have met with success. But jetliners are not cars, and airlines are not private motorists. The result would be higher fares with a minimal effect on congestion. Speaking last week to the Senate Subcommittee on Aviation Operations, Safety, and Security, Zane Rowe, a vice president at Continental, said that peak-period pricing "will do nothing more than reduce service to small communities, reduce job growth and raise fares for commercial passengers." Rowe is partly right. The bit about small communities is certainly an eyebrow-raiser, now that RJs operate on mainline trunk routes as much as they fly to minor cities. (Out of New York, they service such "small communities" as Chicago, Miami and Dallas.) He's correct, however, about costs being passed along to fliers. With average ticket prices as low as they are, it'd be relatively easy for airlines to pass along a modest rise to customers. You already pay extra to fly at the choicest times (even if your flights don't actually leave or arrive when they're supposed to). You'd probably pay more. For the scheme to encourage any measurable consolidation, fees would need to be fairly radical, which is to say very expensive, and I don't foresee that happening. The airlines are too strong, regulators too timid. Instead, the probable result: pricier tickets, same delays.

This can't be right. Basic economics tells us that if the price goes up, the amount demanded will go down. You cannot have pricier tickets and no reduction at all in the commodity being priced. At the margin, some travelers will shift to less-popular times. "Pricier tickets, same delays" is simply not a possible outcome.

Now, if they set the price for peak hour departure too low, then it won't have much of an impact, and so we will have pricier tickets and only slightly reduced delays. But if the congestion fee is that modest, well, ticket prices won't go up that much, either.

Besides, having government set the fee for a particular time is a clumsy and stupid way of going about implementing a congestion-fee system. The obvious solution is to figure out how many takeoffs and landings an airport can accomodate during a particular period and then auction off the rights to prime slots. Instead, Smith prefers a command-and-control solution:

If you ask me, the only hope is for carriers to consolidate departures and wean themselves away from their berserk obsession with regional jets. They can do this voluntarily, or the government can force them to by imposing caps. For example: At Kennedy, no aircraft with fewer than 100 seats shall be allowed to take off or land between 5 p.m. and 10 p.m. Or, during that same time frame, each carrier serving the airport must reduce its schedule by a certain prorated percentage that reflects its share of total passengers.

I'm quite certain this man knows more than I do about flying an airplane, or even about the mechanics of how airports work, but it's goofy to think that government-imposed caps will work better than a price system. If nothing else, he claims that government won't set the price high enough because of the strength of airlines and weakness of regulators. Then why, pray tell, does he imagine that government will set the cap correctly? And if he bans planes with fewer than 100 seats, doesn't he just create an incentive to produce airplanes with exactly 101 seats?

For the life of me, I just don't understand the appeal of command-and-control regulations, when market-based solutions are obviously superior.

UPDATE: Reading the comments, I must say, great minds think alike:

Surely the simplest and market friendly solution would be to cap the number of slots at the most congested airports and conduct an open auction for the right to use the slot. This would give the larger airliners an advantage in that their per seat slot cost would be lower than commuter and executive jets and would have the extra advantage of raising funds for the upgrade of traffic control systems.

Alas, this insightful commenter was anonymous, but whoever it was, he or she got it exactly right.

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