Effects of fuel prices on air transportation performance at New York and San Francisco airports

Abstract

Industry strategists, government regulators, and the media have focused on addressing concerns over the performance of the air transportation system with respect to delays. One of the strategies proposed has been to limit the scheduled operations at an airport to a priori feasible capacity limits. This approach has been criticized on the basis that it would reduce the number of markets served and increase airfares. This paper describes a comparison of the behavior of the of the air transportation system (e.g. markets, economics, and performance) during the recent run-up in fuel prices at slot-controlled New York airports and non-slot controlled San Francisco airports. The results indicate that slot controlled airports yielded improved performance (e.g. less delayed and cancelled flights) through reductions in frequency and de-peaking schedules. There was no significant change in markets service. However, there is a marked decrease in the number of markets served by two or more airlines.On the other hand, the non-slot controlled airports in the San Francisco region showed an increase in flight delays and cancellations during the same period. The number of market served and airfares did not change. These results provide some justification for slot-controls at airports that need to manage network congestion. Even in the presence of fluctuations in passenger demand and economic shocks, passengers saw an improvement in service (i.e. a lessening of delays and cancellation) without any significant loss in markets served or frequency to those markets. The only significant reduction in frequency was to the Washington DC, Chicago and Boston markets where there was decrease in frequency and an upguaging of aircraft to accommodate the passenger demand.

Sensitivity analysis to the cost of delay model for NextGen benefits analysis

“…We therefore varied these costs and examined how the delay costs incurred by airlines are impacted by variations in these costs. In previous work [2], we saw that airlines have incurred far wider swings in fuel costs between 2005-2009 then any variation seen in crew costs, maintenance costs or other operations costs. Fuel costs have been as low as $2.50 per gallon and as high as $3.50 per gallon during this time period.…”

Airline response to changing economics and policy

“…This study expands on prior efforts to analyze the behavior of airlines at congested airports [8]. It compares the performance at the New York airports to the performance at the Philadelphia and San Francisco airports from 2005 through 2009.…”

“…Previous analysis has shown that airline behavior changes with changes in fuel prices [8]. This analysis examines the New York airports (Newark Liberty, New York John F. Kennedy, and LaGuardia), Philadelphia's airport (Philadelphia International), and the San Francisco airports (San Francisco International, San Jose, and Oakland) from January 2005 to December 2009 for trends in airline behavior and the impacts of this behavior on airport congestion and profitability.…”

A Congestion Pricing Model to Handle "Day of Operations" Airport Capacity Reductions

“…Therefore, these costs were varied and observations were made on how the delay costs incurred by airlines are impacted by variations in these costs. In previous work [Ferguson et al, 2009], it was observed that airlines have incurred far wider swings in fuel costs between 2005-2009 than any variation seen in crew costs, maintenance costs or other operations costs. Fuel costs have been as low as $2.50 per gallon and as high as $3.50 per gallon during this time period.…”