Annual U.S. Impact of Flight Delays (NEXTOR report)

Recognizing the significant strain placed by flight delays on the U.S. air transportation system, in August 2008 the Federal Aviation Administration (FAA) commissioned five NEXTOR universities (UC Berkeley, MIT, George Mason University, the University of Maryland and Virginia Tech) and the Brattle Group to conduct a comprehensive study on the total delay impact (TDI) in the United States. On December 16, 2010, NEXTOR published its revised final report, entitled Total Delay Impact Study: A Comprehensive Assessment of the Costs and Impacts of Flight Delay in the United States. The study analyzed data from 2007 to calculate the economic impact of flight delays on airlines and passengers, the costs of lost demand, and the toll on U.S. gross domestic product (GDP).

Growing delays threaten the competitiveness of the U.S. in the world economy by limiting the ability of the air transport system to serve the needs of the U.S. economy… In addition to improving business performance generally, air transport impacts the economy through the jobs and revenue it directly creates in air transport-related industries, the expenditures of air travelers on auxiliary goods and services, and the secondary impacts that result as these dollars recycle throughout the economy.

The authors found that increased delays directly correlate with increased costs:

“Flight delay is a serious and widespread problem in the United States. Increasing flight delays place a significant strain on the U.S. air travel system and cost airlines,    passengers and society many billions of dollars each year… The $8.3 billion airline component consists of increased expenses for crew, fuel and maintenance, among others. The $16.7 billion passenger component is based on the passenger time lost due to schedule buffer, delayed flights, flight cancellations and missed connections. The $2.2 billion cost from lost demand is an estimate of the welfare loss incurred by passengers who avoid air travel as the result of delays…

In addition to these direct costs imposed on the airline industry and its customers, flight delays have indirect effects on the U.S. economy. Specifically, inefficiency in the air transportation sector increases the cost of doing business for other sectors, making the associated business less productive… The TDI team estimates that air transportation delays reduced the 2007 U.S. GDP by $4 billion.

One can certainly expect that new aviation technologies and procedures, including those associated with the Next Generation Air Transportation System (NextGen), coupled with appropriate government policies and infrastructure investments, have the potential to reduce the identified costs by a very large percentage.”

Detailed Breakdown of Cost of Air Transportation Delay in 2007

In 2007, domestic flight delays were found to cost the U.S. economy $31.2 billion in 2007, including $8.3 billion in direct costs to airlines, $16.7 billion in direct costs to passengers, $2.2 billion from lost demand and $4.0 billion in forgone GDP.

Line Item Cost Component

Category $ Billions
Flight Delay Against Schedule Airlines 4.6
Intrinsic Flight Delay due to Schedule Buffer Airlines 3.7
Excess Travel Time due to Schedule Buffer Passengers 6.0
Passenger Delay Against Schedule: Delayed Flights Passengers 4.7
Passenger Delay Against Schedule: Canceled Flights Passengers 3.2
Passenger Delay Against Schedule: Missed Connections Passengers 1.5
Capacity-Induced Schedule Delay Passengers 0.7
Voluntary Early-Departure-Time Adjustment Passengers 0.6
Welfare loss due to switch from air to automobile Shared 2.0
Externality cost from increased road traffic Shared 0.2
Forgone GDP Shared 4.0
Total U.S. Cost All 31.2

 

ABOUT A4A

Airlines for America (A4A) members are Alaska Airlines, American Airlines, Atlas Air, Delta Air Lines, FedEx, Hawaiian Airlines, JetBlue Airways, Southwest Airlines, United Airlines and UPS. Air Canada is an associate member.

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