Article ID Journal Published Year Pages File Type
1023688 Transportation Research Part E: Logistics and Transportation Review 2012 10 Pages PDF
Abstract

US airline passengers increasingly have access to flight delay information from online sources. As a result, air passenger travel decisions can be expected to be influenced by delay information. In addition, delays affect airline operations, resulting in increased block times on routes and, in general, higher carrier costs and airfares. This paper examines the impact of flight delays on both passenger demand and airfares. Delays are calculated against scheduled block times as well as against more idealized feasible flight times. Based on econometric estimations, welfare impacts of flight delays are calculated. We find that flight delays on a route reduce passenger demand and raise airfares, producing significant decreases in both consumer and producer welfare. Since producer welfare effects are estimated to be three times as large as consumer welfare effects, we conclude that from an economic efficiency rationale, airlines should be required to pay for the bulk of flight delay remediation efforts.

► Impact of flight delays on passenger demand, airfares and societal welfare. ► Flight delays on a route reduce passenger demand and raise airfares. ► Flight delays decrease both consumer and producer welfare.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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