Industrial Engineering

Good Policy or Costly Regulation?

policy

Picture source: zodiacregistry.com

INDUSTRIAL ENGINEER – Volume 43 Number 6

 Tarmac rule has cut lengthy delays, but more flights have been canceled

An industrial engineering professor and other researchers maintain that the April 2010 rule designed to curb lengthy tarmac delays has backfired, costing airlines billions of dollars due to business disruption and lost productivity.

Air Transport World online reports that in the first nine months of the rule, cancellation rates were up an average of 0.28 points from the nine months before the U.S Department of Transportation threatened fines of up to $27,500 for each passenger stuck in a plane on a tarmac for more than three hours. That would equal 8,000 more cancellations per year. The DOT estimated the regulation would cause 41 more cancellations per year and more than 400 cancellations per year would wipe out the rule’s benefits.

Regulations backers, including U.S Transportation Secretary Ray LaHood, say critics overstate the number of cancellations, the number of lengthy tarmac delays has dropped significantly, and airlines now must treat passengers like human beings, not cargo. In the nine months before the rule was enacted, there were 604 tarmac delays of more than three hours. In the nine months after, there were 16. Amy Cohn, a professor of industrial engineering at the University of Michiganm and others contend that airlines just cancel more flights rather than risk the exorbitant fines.

“Almost all passengers want to go to their destinations, but the big penalty and rigid rule mean planes may turn back even when they did not need to and the flight could have taken off,” she said.

She discounted the argument that few passengers are complaining. “It is not enough to say passengers are happy. They do not know why their flights was canceled,” she said.