• • ' !• ! P U : f | 3



# UNITE D STATE S DEPARTMEN T O F TRANSPORTATIO N FINA L REGULATOR Y IMPAC T ANALYSI S O F

RULEMAKIN G O N ENHANCE D AIRLIN E PASSENGE R

PROTECTION S FINA L REGULATOR Y EVALUATIO N

Decembe r17,200 9

### Thi s Pag e Intentionally Lef t Blan k

HIR I Decisio n Economic s Pag e *

### TABL E O F CONTENT S

ACRONYM S AN D ABBREVIATION S Vl l EXECUTIV E SUMMAR Y 1 1 INTRODUCTION 8 1. 1 State d Nee d fo rRegulatio n 8 1.1. 1 Nee d fo rInterventio n , 9 1.1. 2 Recommendation s o f th e Departmen t o f Transportation' s Inspecto rGeneral . 1 3 1.1. 3 industry Action s 1 4 1. 2 Fina l Regulatio n 1 4 1. 3 Alternative s 1 6 2 BENEFIT-COS T ANALYSI S APPROAC H 1 9 2. 1 Overvie w o f Analytica l Framewor k 1 9 2.1. 1 Valu e o f Tim e 2 0 2.1. 2 Valu e o f Reliabilit y an d Certaint y 2 3 2.1. 3 Ke y Assumption s 2 3 2.1. 4 Limit s t o Availabl e Informatio n 2 5 2. 2 Componen t 1 : Develo p an d Implemen t a Contingenc y Pla n fo rExtende d Tarma c Delay s 2 5 2.2. 1 Componen t Assumption s 3 1 2.2. 2 Scenario s fo rLon g Tarma c Delay s 3 1 2.2. 3 Cos t an d Benefi t Calculation s fo rComponen t 1 3 9 2.2. 4 Adjustment s t o Componen t 1 Covere d b y Alternative s 1 , 2 an d 3 4 5 2. 3 Componen t 2 : Provid e Informatio n fo rFilin g Complaint s an d Respon d t o Consume r Problem s 4 5 2. 4 Componen t 3 : Chronicall y Delaye d Flight s t o b e Declare d Unfai ran d Deceptiv e Practice s an d a n Unfai rMetho d o f Competitio n . ' 4 8 2.4. 1 Arriva l Dela y 5 0 2.4. 2 Summary o f Cos t an d Benefi t Calculatio n fo rComponen t 3 5 0 2.4. 3 Adjustmen t t o Componen t 3 Covere d b y Alternativ e 4 5 0 2. 5 Componen t 4 : Carrier s t o Publis h Dela y Dat a o n Website s 5 1 2.5. 1 Summary o f Cos t an d Benefi t Calculatio n fo rComponen t 4 5 3 2.5. 2 Adjustment s t o Componen t 4 Covere d b y Alternativ e 5 5 4 2. 6 Componen t 5 : Carrier s t o Adop t Custome rServic e Plan s an d Self-Audi t Compliance5 5 3 UPDATE S T O TH E REGULATOR Y EVALUATIO N 5 7 4 RESULT S AN D DISCUSSIO N 6 0 4. 1 Ne t Result s 6 0 4. 2 Ris k

Analysi s 7 5 4. 3 Sensitivit y Analysi s 8 0 4. 4 Qualitativ e an d Non-monetize d Benefit s 8 3 5 FINA L SMAL L BUSINES S IMPAC T ANALYSI S 8 5 APPENDI X A . DAT A SOURCE S 8 9

HXtlDocisio n Economic

s Pag e • ii i

### LIS T O F FIGURE S

Figur e 1 : Complaint s pe r100,00 0 Enplanement s i n 200 7 b y Category , b y Airline s wit h Reportin g Requirement s 1 0 Figur e 2:200 3 - 200 7 Complaint s pe r100,00 0 Enplanements , fo rAirline s wit h Reportin g Requirement s 1 1 Figur e 3 : Tax i Ou t Tim e fo rAirport s (minutes ) 1 1 Figur e 4 : Tax i Ou t Tim e fo rAl l Airports , tim e segment s a s % o f tota l 1 2 Figur e 5 : Tax i Ou t Tim e fo rAl l Airports : Onl y flight s wit h Tax i ou t tim e greate rtha n 6 0 minutes , 1 2 Figur e 6 : Chang e i n Consume rSurplu s fro m Reduce d Tim e o f Filin g Complaint s a s a Functio n o f Uni t Generalize d Cos t 4 7 Figur e 7 : Ne t Presen t Value , Usin g 3 % an d 7 % Discoun t Rates, Probabilit y Distributio n fo rth e Rul e 7 7 Figur e 8 : Presen t Valu e o f Cost s Usin g a 3 % an d 7 % Discoun t Rate , Probabilit y Disthbutio n fo r th e Rul e 7 8 Figur e 9 : Presen t Valu e o f Benefit s Usin g a 3 % an d 7 % Discoun t Rate , Probabilit y Distributio n fo r th e Rul e 7 9 Figur e 10 : Presen t Valu e o f Ne t Benefit s Usin g a 7 % Discoun t Rate , Probabilit y Disthbutio n fo r th e Fina l Rul e an d Alternative s 8 0

HIR I Decisio n Economic

s Pag e • I v

### LIS T O F TABLE S

Tabl e 1 : Summar

y o f Alternative s 1 7 Tabl e 2 : To p 1 % o

f Domesti c Passenge rCarrier s 1 8 Tabl e 3 : Smal l Carrier

s (wit h Fleet

s Consistin g Onl y o

f Plane s betwee n 3 0 an d 6 0 Seats ) 1 8 Tabl e 4 : Valu e o

f Tim e fo rAi rPassenger

s 2 1 Tabl e 5 : Valu e o

f Tim e Premium s fo rDifferin g Qualitative Level s o f Service 2 2 Tabl e 6 : Selec

t Airlin e Term s an d Condition s t o Handl e Long , On-boar d Fligh t Delay

s 2 7 Tabl e 7 : Summar

y o f Componen t 1 Requireiiients , Costs , an d Benefits 2 9 Tabl e 8 : Summar

y o f Segment

s o f Tri p Tha t Coul d Experienc

e Chang e i n Qualit

y o rQuantit

y o f Tim e 3 0 Tabl e 9 : Segment

s o f Tri p That Coul d Experience Chang e i n Qualit y o rQuantit

y o f Time : Adoptio n o

f Contingenc

y Pla n 3 2 Tabl e 10 : Segment

s o f Tri p Tha t Coul d Experienc

e Chang e i n Qualit

y o rQuantit

y o f Time : Provisio n o

f Adequat e Food , Water , an d Lavator y Facilitie s an d t o Medica l Attention... . 34 Tabl e 11 : Segment

s o f Tri p Tha t Coul d Experienc

e Chang e i n Qualit

y o rQuantit

y o f Time : Opportunit

y t o Deplan e a

t Gat e 3 5 Tabl e 12 : Segment

s o f Tri p That Coul d Experience Chang e i n Qualit y o rQuantit

y o f Time : Cancelle d Flights (afte rpassenger s boarded ) 3 7 Tabl e 13 : Segment

s o f Tri p Tha t Coul d Experienc

e Chang e i n Qualit

y o rQuantit

y o f Time : Cancelle d Flights (befor

e passenger

s boarded ) 3 8 Tabl e 14 : Averag e o

f 200 7 an d 200 8 Flights an d Passenger s pe rTax i Dela

y Tim e Group , fo r Carrier s Covere d B

y Rul e Bu t No

t Alread y Complian t fo rContingenc y Plan s 4 0 Tabl e 15 : Tota l Costs t o carrier s o f Componen t 1 4 2 Tabl e 16 : Tota l Costs t o passenger s o f Componen t 1 4 2 Tabl e 17 : Benefits t o Passenger s fro m Deplaning , Annuall y 4 4 Tabl e 18 : Summar

y o f Componen t 2 Requirements , Costs an d Benefits 4 6 Tabl e 19 : Tota l Annua l Benefits o f Componen t 2 4 8 Tabl e 20 : Tota l Costs o

f Componen t 2 4 8 Tabl e 21 : Summar

y o f Componen t 3 Requirements , Cost s an d Benefits 4 9 Tabl e 22 : Summar

y o f Componen t 4 Requirements , Costs an d Benefits 5 1 Tabl e 23 : Reportin g Carrier s an d Postin g o

f Dela y Data 5 3 Tabl e 24 : Tota l Costs o

f Componen t 4 5 4 Tabl e 25 : Tota l Benefits o f Componen t 4 5 4 Tabl e 26 : Tota l Costs Associate d wit h Alternativ e 4 55 Tabl e 27 : Summar

y o f Componen t 5 Requirements , Cost s an d Benefits 5 6 Tabl e 28 : Cost

s o f Componen t 5 5 6 Tabl e 29 : Summar

y o f Cost s an d Benefits fo rFina l Rul e an d Alternative s 6 1 K R I Decisio n Economic

s Pag e •Tabl e 30 : Cost s an d Benefits fo rFina l Rul e b y Yea ran d Componen t o f Fina l Rul e (millions) , no t discounted.. ^

, 62 Tabl e 31 : Cost

s an d Benefits fo rAlternative s onl y fo rComponent s Whic h Diffe rfro m Fina l Rul e (millions) , no t discounte d ......6 7 Tabl e 32 : Provisiona l Estimate s o f Expecte d Benefits o

f Componen t 5 , Implementin g an d Self Auditin g Custome rService Pla n 7 5 Tabl e 33 : Summar

y Results o

f Ris k Analysi s 76 Tabl e 34 : Sensitivit

y Analysi s Results , Cost

s 8 1 Tabl e 35 : Sensitivit

y Analysi s Results , Benefits 82 Tabl e 36 : Smal l Carrier

s wit h Plane s Onl y betwee n 3 0 an d 6 0 Seat s 8 6 Tabl e 37 : Tota l Costs (i n millions ) fo reac h Componen t 8 6 Tabl e 38 : Annualize d Costs pe rFirm , Te n Year s 8 7 Tabl e 39 : Receipts fo rSmal l Carrier s 8 7 Tabl e 40 : Annualize d costs as a percen t o f annua l receipts pe rfir m : 8 8

( x R I Decisio n Econoniic

s Pag e • V i

### ACRONYM S AN D ABBREVIATION S

ANPR M - Advanc

e Notice o

f Propose d Rulemakin g AOT P - Airlin e On-Tim e Performanc e AT A - Ai rTranspor

t Associatio n AT C - Ai rTraffi c Contro l BLS - Burea u o

f Labo rStatistics BT S - Burea u o

f Transportatio n Statistics CP I - Consume rPrice Inde x Departmen t o rDO

T o rUSDO

T - Departmen t o

f Transportatio n FA A - Federa l Aviatio n Administratio n GD S - Globa l Distributio n System s I G - Inspecto rGenera l o

f th e Departmen t o

f Transportatio n LOS - Leve l o

f servic e NPR M - Notice o

f Propose d Rulemakin g NP V - Ne t Presen t Valu e 0M B - Offic e o

f Managemen t an d Budge t OT C - onlin e trave l companie s RA P - Ris k

Analysi s Proces s RI A - Regulator

y Impac t Analysi s SB A - Smal l Busines s Administratio n TS A - Transportatio n Securit y Administratio n

H I R I Decisio n Economic

s Pag e • Vi i

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H^RlDBcisio n Economic s Pag e • Vii i

### EXECUTIV E SUMMAR Y Th e U.S . Departmen t

o f Transportatio n (DOT ) i s presentin g thi s Fina l Regulatory Impac t Analysi s (regulatory analysi s o r RIA ) prepare db y HDRjDecisio n Economic s (HDR ) i n support o f th e Fina l Rulemakin g o n Enhance dAirlin e Passenge r Protections . Thi s RI A estimate s th e economi c impact , i n term s o f al l cost s an dbenefits , accruin g t o passengers , ai r carrier s an dothe r entitie s regulate dunde r

thi s action , a s require db y Executiv e Orde r (EO ) 12866 . Economi c impact s ar e measure do n a n incrementa l basi s an dagains t th e curren t

statu s o f passenge r

right s o n domesti c airlin e carriers . A detaile ddescriptio n o f th e Propose dRul e an dan initia l assessmen t o f th e strea mo f

cost s an d benefit s o f

th e Propose dRul e wer e provide dt o th e publi c fo r comment . Th e Departmen t ha s reviewe dth e publi c comment s t o bot h th e Propose dRul e an dth e initia l Regulator y Impac t Analysi s an dha s mad e relevan t adjustment s t o bot h th e Rul e an dRIA . A discussio n o f th e comment s an dresponse s t o th e conunent s ca n b e foun di n th e Preambl e t o th e Fina l Rule . Th e estimate s o f

tota l cost s an dbenefit s o f th e Fina l Rul e an dth e alternative s assesse dpresente di n thi s RI A reflec t

update s i n respons e t o th e publi c comment s an da s aresul t o f further research . I n additio n t o complyin g with E O 12866 , thi s documen t addresse s requirement s o f thre e othe r acts : Th e Trad e Agreement s Ac t require s agencie s t o conside r existin g internationa l standard s an d avoi duimecessaril y interferenc e with internationa l trade . Th e Departmen t ha s determine dtha t th e Fina l Rul e doe s no t

impose an y significan t

barrier s t o internationa l trade . Th e Unfunde dMandate s Refor mAc t o f 199 5 require s agencie s t o asses s th e impac t o f ane w Rul e o r regulator y chang e o n state , local , and/o r triba l governments ; Th e Departmen t ha s determine dtha t

th e Fina l Rul e wil l not impose additiona l cost s t o state , loca l o r triba l governments . Th e Regulatory Flexibilit y Ac t o f 198 0 require s tha t

agencie s asses s th e economi c impac t o f a ne w Rul e o r

regulator y chang e o n smal l businesse s an dconside r alternative s t o achiev e th e sam e goa l wit h les s impact . Th e impac t o f thi s Fina l Rul e o n smal l carrier s i s discusse dbelow . Nee dfo r Regulatio n A histor y o f

persisten t

an dsignifican t

fligh t delay s an dincreasin g consume r complaint s le dDO T t o identif y anee dfor

aregulatio n t o secur e airlin e passenge r rights . Notabl e delay s i n 199 9 le d carrier s t o agre e t o tak e voluntary actio n t o reduc e custome r complaints . Fo r

th e las t decade , effort s t o improv e custome r servic e focuse do n self-regulation , bu t repeate dan dsignifican t incident s o f

on-boar ddelay s an dcontinuin g increase s i n consume r complaint s ha s le dDO T t o th e conclusio n that , i n thi s industry , voluntar y respons e fall s shor t o f identifie dneeds :
• Onl y 7 o f

1 8 airline s with a

t leas t 1 % o f domesti c scheduled-servic e passenge r revenue s hav e institute dfixe dlimit s t o on-tarma c delay s prio r t o providin g passenge r

amenitie s and/o r deplanmg ;• Onl y 5 o f 1 8 airline s with at

leas t 1 % o f domesti c scheduled-servic e passenge r revenue s hav e adopte dcustome r

servic e plan s with regular self-audits ; an d

• Onl y 3 o f

1 8 airline s with a

t leas t 1 % o f domesti c scheduled-servic e passenge r revenue s publis h dela y dat ao n thei r publi c websites . DO T believe s tha t

regulatio n i s warrante dt o ensur e tha t airline s mee t

minimu mstandard s for passenge r servic e an dt o avoi ddiminishmen t o f passenge r

car e beyon dacceptabl e levels . Fina l Rul e A Notic e o f

Propose dRulemakin g (NPRM ) o n Enhancin g Airlin e Passenge r Protection s announce dDOT' s consideratio n o f apropose drul e tha t

include dfiv e component s t o ensur e tha t airlin e passenge r

car e an dservic e mee t minimu mstandards . Thes e fiv e component s ar e summarize dbelow. ' 1 . Requir e carrier s t o adop t an dpublis h contingenc y plan s fo r length y tarma c dela y thei r websites . An y certificate do r commute r

ai r carrie r tha t operate s domesti c schedule d passenge r servic e (includin g an y charte r services ) tha t

use s an y aircraf

t with 3 0 o r

mor e passenge r seat s wil l b e require dt o develo p acontingenc y pla n for lon g groun ddelay s o n th e tarma c for

al l it s flights , includin g thos e o n aircraf t containin g fewer

tha n 3 0 seats . Eac h contingenc y pla n wil l specif y tha t th e carrie r

wil l ensur e a ) tha t

passenger s o n plane s delaye do n th e tarma c for tw o hour s wil l hav e acces s t o food , water , clea n lavatories , an dth e assistanc e o f medica l persona l i

f needed , an db ) passenger s o n plane s delaye do n th e tarma c for thre e hour s wil l b e permitte dt o deplane , unles s ther e i s asafet y and/o r security-relate dimpedimen t t o deplanin g passenger s o r ai r traffi c contro l (ATC ) advise s th e pilo t

tha t permittin g passenger s t o retur n t o th e gat e o r disembar

k woul d significantl y disrup t

airport operation s (a s describe di n th e preamble) . Contingenc y plan s mus t b e mad e availabl e o n carrie r websites . Carrier s wil l als o b e require dt o maintai n informatio n for tw o year s o n delay s tha t trigge r th e contingenc y plan . Th e informatio n wil l includ e th e length o f th e delay , th e caus e o f th e delay an didentif

y step s take n b y th e carrie r t o alleviat e passenge r

discomfort . 2 . Requir e carrier s t o respon dt o consume r problems . Ever y certificate dan dcommute r ai r carrie r tha t operate s schedule ddomesti c passenge r servic e usin g an y aircraf t with 3 0 o r mor e passenge r

seat s wil l b e require dt o designat e an employe e a t it s syste m operation s cente r

an dat eac h airport

dispatc h cente r

t o monito r

delay s an dt o hav e inpu t o n decision s regardin g fligh t cancellations . Eac h suc h carrie r wil l als o b e require dt o provid e informatio n o n ho w t o fil e consume r complaint s a

t eac h airpor

t dispatc h center , o n it s website , an do n al l e-ticke t confirmations . Eac h suc h carrie r wil l b e require dt o sen dasubstantiv e respons e t o eac h consume r complain t

withi n 6 0 day s o f

receip t an d acknowledg e receip t

o f th e complain t

withi n 3 0 days. ^ Fo r mor e detail , se e tii e accompanyin

g Notic e o f Fina l Rulemaking . Th e Rul e wil l no t requir e resolutio n o f th e complaint

, bu t rathe r atarge t respons e upo n receipt. H X ( I Decisio n Economic s Pag e • 23 . Declar e th e operatio n o f flights tha t

remai n chronicall y delaye dt o b e a n unfai r an d deceptiv e practic e an da n unfai r metho do f

competition . Th e Fina l Rul e define s a chronicall y delaye dfligh t a s afligh t

tha t i s operate db y acarrie r

that i s carryin g 1 % o r mor e o f al l domesti c passengers , tha t i s flow n a

t leas t 1 0 time s i n amonth , an dtha t arrive s mor e tha n 3 0 minute s lat e mor e tha n 50 % o f th e time . I

f thi s flight

continue s t o operat e for

four consecutiv e month s at

thi s leve l o f

delay , it wil l b e considere dan unfai r an ddeceptiv e practic e an dsubjec t t o enforcemen t

action . 4 . Requir e carrier s t o publis h dela y dat ao n thei r websites . Th e DO T propose s t o requir e tha t airline s tha t

ar e currentl y require dt o repor t on-tim e performanc e dat at o th e Bureau o f Transportatio n Statistic s (BTS ) (i.e. , reportin g carriers ) t o publis h som e dela y informatio n o n thei r

website s for

eac h fligh t

i t operate s an dfor

eac h fligh t

it s U.S . code shar e partner s operat e fo r whic h schedul e informatio n i s available . Thi s informatio n i s t o includ e th e percentag e o f on-tim e arrivals , th e percentag e o f arrival s delaye dmor e tha n 3 0 minute s with specia l highlightin g i f th e fligh t wa s lat e mor e tha n 50 % o f th e time , an d th e percentag e o f

cancellation s if

5 percen t

o r mor e o f th e flight' s operation s wer e cancele di n th e covere dmonth . Ther e wil l b e tw o option s for dat apresentatio n - o n th e we b pag e wit

h th e initia l listing s o r

b y hyperlin k

o n that page . 5 . Eac h carrie r

mus t adop t acustome r

servic e pla n an dself-audi t adherenc e t o it . Th e DO T propose s requirin g an y certificate do r commute r

ai r carrie r tha t operate s schedule d domesti c schedule dpassenge r servic e t o adop t

acustome r

servic e pla n int o tha t

addresse s th e issue s covere db y th e 1 2 part s o f th e Ai r Transport

Association' s (ATA ) Custome r Servic e Commitmen t

an dt o self-audi t

adherenc e t o thi s custome r servic e plan . Alternative s Evaluate d Th e Offic e o f

Managemen t

an dBudge t

(0MB ) state s that

regulator y analyse s shoul dconside r alternative s t o th e Rul e o r regulatio n bein g evaluate dan dpublis h result s a s part o f th e rulemakin g process. ^ Th e initia l RI A publishe dwith th e NPR M evaluate dfour alternative s t o variou s component s whic h wer e considere db y th e Departmen t befor e comin g t o decision s o n th e Fina l Rule . Th e cost s an dbenefit s for thes e alternatives , a s wel l a s for th e optio n presente da s th e propose drule , hav e bee n update di n respons e t o comment s b y th e publi c o n cos t an dbenefi t assumption s an dvalue s an dar e include di n thi s Fina l RIA . Thes e alternative s are : Alternativ e 1 : Thi s alternativ e affect s Componen t 1 (contingenc y plan s for length y tarma c delays ) an dassume s DOT-impose dtarma c delay limit s o f tw o hour s befor e guarante e o f food , water , etc. , an dfou r

hour s (instea do f

thre e hours ) before allowin g passenger s t o deplane . Thi s contingenc y pla n woul db e require dfor al l carrier s with aircraf

t seatin g 3 0 passenger s o r more . Al l othe r component s o f

th e Fina l Rul e ar e maintained . Alternativ e 2 : Thi s alternativ e als o affect s Componen t 1 an dallow s carrier s t o determin e th e tim e triggers . Thi s wa s th e propose doptio n for th e Rul e describe di n th e NPRM . Base dupo n existin g carrie r

contingenc y plans , i t

wa s estimate dthat

tim e limit s institute db y carrie s wil l converg e ont o atarma c dela y limit s o f tw o hour s befor e guarante e o f food , water , etc , an dfiv e

^ Circula r A-4 , Offic e o f Managemen

t an dBudget , Septembe

r 17,2003 . H ] RI Decisio n Economic s Pag e • 3hour s befor e allowin g passenger s t o deplane.' * Contingenc y plan s woul db e require dfor al l carrier s with aircraf

t seatin g 3 0 passenger s o r more . Al l othe r

component s o f

th e Fina l Rul e ar e maintained . Alternativ e 3 : Thi s alternativ e require s th e contingenc y pla n (define di n Componen t 1 ) t o appl y t o carrier s tha t

operat e at

leas t on e fligh t

with aircraf

t seatin g 6 0 o r

mor e passenger s (instea do f 3 0 o r more) . Al l othe r

component s o f

th e Fina l Rul e ar e maintained . Alternativ e 4 : Thi s alternativ e redefine s what constitute s achronicall y delaye dfligh t i n Componen t

3 (whic h declare s chronicall y delaye dflight s "unfai r an ddeceptive" ) t o on e tha t arrive s at leas t 3 0 minute s lat e a

t leas t 60 % o f time , (no t

50 % o f time ) i n thre e consecutiv e quarters . Al l othe r

component s o f

th e Fina l Rul e ar e maintained . Alternativ e 5 : Thi s alternativ e woul drequir e reportin g carrier s an donlin e trave l agencie s t o pos t delay dat ao n thei r

website s (Componen t

4 o f th e Fina l Rule) . Trave l agencie s tha t operat e exclusivel y online , a s wel l a s thos e tha t allo w customer s t o purchas e airlin e ticket s online , woul d b e require dt o publis h som e dela y informatio n o n thei r website s befor e th e poin t o f purchase , similar t o thi s requiremen t

for reportin g carriers . Summar y o f

Update s t o th e Regulator y Impac t Assessmen t I n respons e t o th e comment s submitte di n respons e t o th e NPRM , an da s aresul t o f furthe r researc h an ddat acollection , change s hav e bee n mad e t o som e o f th e variable s tha t

mak e u p th e estimation s o f

cost s an dbenefit s i n thi s RIA . Commenter s include dman y privat e citizens , consume r advocac y groups , airlin e industry associations , airlin e carriers , trave l agenc y associations , airport

associations , an dlawmakers . On e o f th e mos t frequen t comment s mad e b y airlin e industry association s an dairlin e carrier s wa s tha t th e rang e o f

cost s estimate dwa s to o low , an dspecificall y di dnot includ e th e cost s o f litigatio n whic h ma y aris e despit e carriers ' compliance . Th e estimat e t o collec t an dpos t dela y dat ao n carrie r

website s wa s increased . Th e Departmen t believe s tha t

suc h litigatio n cost s woul d b e aregular

functio n o f

doin g business . Nevertheless , th e Departmen t ha s decide dno t

t o requir e a t thi s tim e tha t

carrier s incorporat e thei r contingenc y plan s an dcustome r servic e plan s int o thei r contract s o f

carriage . Al l change s ar e discusse di n detai l i n chapte r 3 . Summar y o f

Result s Th e goa l o f

thi s analysi s i s t o asses s th e incrementa l benefit s an dcost s attributabl e t o adoptio n o f th e regulations . A fundamental indicato r o f apublicl y acceptabl e rul e i s on e i n whic h publi c benefit s excee dpubli c costs . Th e differenc e betwee n benefit s an dcost s quantifie dove r th e plannin g horizo n lifecycl e an ddiscounte dt o th e presen t represent s afundamental indicato r o f projecte dworth . OM B Circular A- 4 stipulate s tha t

thi s difference , th e ne t

presen t valu e (NPV) , shoul db e regarde da s aprincipa l measur e o f valu e produce db y abenefit-cos t analysis . Further , E O 1286 6 state s tha t

agencie s shoul dattemp t

t o maximiz e th e ne t

benefit s o f

thei r rulemakings , subjec t t o statutory requirements . A NP V greate r tha n zer o indicate s tha t

benefit s excee dcost s

' ' Fo r mor e detai l see Initia l Regulatory Impac t Analysi s o f

Propose dAirlin e Passenge r Protections , Septembe r 2008 . H R I Decision Economic

s Pag e • 4an dthat

th e regulatio n ca n b e expecte dt o increas e th e genera l leve l o f economi c welfar e accordingly . Monetize doutcome s wer e estimate dfor al l impact s tha t

me t tw o conditions : (1 ) volum e estimate s wer e availabl e o r coul db e estimated ; an d(2 ) value s o f uni t change s i n outcome s coul d b e determine do r

estimate dusin g analogou s experience , availabl e statistics , o r with acceptabl e shado w pricin g techniques . Th e tim e frame for th e estimatio n o f

th e monetize dimpact s o f th e Enhance dAirlin e Passenge r Protection s i s se t

a t 2 0 years . Carrier s wil l b e expecte dt o b e complian t b y th e en do f

th e firs t year . Th e expecte dpresen t

valu e o f cost s ove r

a20-year

perio dusin g a7 % discoun t rat e i s $100. 6 millio n for

carrier s an dpassengers ; whil e th e expecte dpresen t valu e o f monetize dbenefit s i s $169. 7 million . NP V o f

th e Fina l Rul e for

2 0 year s at

a7 % discoun t

rat e i s $69. 1 million . Th e NPV s for th e alternative s rang e fro m-$1 7 t o $7 4 millio n a t a7 % discoun t

rate . Th e ne t

presen t valu e o f alternative s 1 an d2 ar e extremel y close , whil e an dth e ne t presen t valu e o f th e Rul e an d alternativ e 4 ar e als o similar . Give n th e multipl e avenue s throug h whic h uncertaint y i n specifi c input s ca n affec t

comparativ e ne t

benefit s amon g alternatives , th e Departmen t ha s chose n th e optio n for th e Rul e whic h i t

believe s maximize s both quantifiabl e an dunquantifiabl e ne t benefit s t o society , withou t

placin g a n undu e burde n o n th e industry . Tabl e ES-1 : Summar

y o f Cost s an dBenefit s fo

r Fina l Rul e an dAlternative s ^ 2 0 Yea r Ufgcycii e Analysl» Bwi«flt»(milltoris) Fina l Ftur » AIt t Al

t 2 AW$ Al t 4 Att S 2 0 Yea rP V 7 % discountin g $169. 7 $152. 7 $149. 1 $144. 0 $168. 2 $168. 6 2 0 Yea r P V 3 % discountin

g $249. 2 $224. 5 $219. 2 $211. 9 $247. 0 $247. 5 Coat s (mlHtons

) Fina

l Rut o Att i Air 2 Al t 3 Al t 4 Alt & 2 0 Yea rP V 7 % discountin g $100. 6 $79. 3 $75. 4 $80. 4 $100. 6 $185. 8 2 0 Yea rP V 3 % discountin g $141. 3 $110. 3 $104. 7 $111. 9 $141. 3 $230. 3

ilna l Rul e Alt t Alt 2 Alt s Al

t 4 2 0 Yea r P V 7 % discountin

g $69. 1 $73. 4 $73. 7 $63. 7 $67. 6 ($17.2) 2 0 Yea r P V 3 % discountin

g $107. 9 $114. 2 $114. 5 $100. 0 $105. 7 $17. 2 Economi c forecast s traditionall y tak e th e for mo f asingl e "expecte doutcome " supplemente d wit h alternativ e scenarios . Th e limitatio n o f aforecas t

with asingl e expecte doutcom e i s tha t whil e it ma y provid e th e singl e bes t statistica l estimate , i t

offer s n o informatio n abou t th e rang e o f othe r possibl e outcome s an dthei r associate dprobabilities . Thi s RI A incorporate s a n analytica l ris k approac h tha t

attache s range s (probability distributions ) t o th e forecast s o f eac h inpu t variable , allowin g al l input s t o b e varie dsimultaneousl y withi n thei r distributions . Applyin g uncertaint y t o benefi t

an dcos t estimate s i n thi s maimer provide s arang e o f

probability-base d outcome s for

th e expecte dbenefit s an dcost s o f th e Fina l Rule . Th e result s o f th e uncertaint y analysi s indicat e tha t

usin g a7 % discoun t

rate , ther e i s an 80 % probabilit y tha t th e 20-year

NP V o f th e Rul e wil l b e betwee n $21. 8 an d$123. 4 million . Th e result s indicat e tha t th e Rul e wil l mos t likel y hav e ane t

positiv e impact ; th e probabilit y o f th e NP V bein g negativ e i s les s tha n 10 % (se e sectio n 4. 2 for

greate r detail ) ove r

2 0 years .

HLR I Decision Economic s Pag e • 5Tabl e ES-2 : Summar y Result s o f Ris k

Analysi s 20-Yea rPerio d Fina l Rul e a t 7 % discoun t rat e Fina l Rul e a t 3 % discoun t rat e Media n NP V ($M ) $66. 2 $101. 8 10 % Probabilit y o f NO T Exceedin g

$21. 8 $37. 9 QC o Probabilit y o f

NO T Exceedin g

$123. 4 $193. 2 Th e median , risk-adjuste dNP V varie s slightl y fro mth e expecte dNP V show n i n Tabl e ES-1 , du e t o th e statistica l ris k analysi s calculation . Benefit s of

th e Rul e tha t

coul dnot b e measure do r

monetize dar e als o assesse di n thi s RIA . Non quantifie dbenefit s ma y include : Unde r Componen t

1 (Contingenc y Plans )

- Improve dManagemen t

O f Fligh t Delays .

- Reduce dStres s Amon g Delaye dPassenger s An dCrew .

- Decrease dAnxiety With Regar dT o Flying .

- Improve dCustome r

Goo dWil l Toward s Carriers .

- Improve dOveral l Carrie r Operations . Unde r Componen t

2 (Custome r

Complaints )

- Decrease dAnge r

Towar dCarrier s Durin g Resolutio n o f Complaints .

- Decrease dLega l an dAdministrativ e Fee s fro mBette r Response s t o Consume r Complaints . Unde r Componen t

3 (Chronicall y Delaye dFlights )

- Improve dCustome r

Goo dWil l Toward s Carriers .

- Improve dManagemen t

O f Flight s an dSchedules . Unde r Componen t

4 (Postin g Dela y Data)

- Improve dManagemen t

O f Flight s an dSchedules . Unde r Componen t

5 (Incorporatin g an dAuditin g Custome r Servic e Plans )

- Valu e o f

Improve dCustome r

Servic e Base do n Self-Auditin g o f Adherenc e t o Custome r Servic e Plans .

- Improve dCustome r

Goo dWil l Toward s Carriers . Accountin g Statemen t A s require db y OM B Circular A-4 , thi s RI A include s a n accountin g statemen t

indicatin g th e classificatio n o f

th e annua l expenditure s associate dwith thi s rule . Th e tabl e provide s ou r bes t estimat e o f

th e annua l dollar

amoun t o f thes e cost s an dbenefits , expresse di n 200 9 dollars , at 3 % an d7 % discoun t

rates . W e estimat e tha t

th e benefit s wil l b e $15. 7 millio n annualize da t a7 % discoun t rate , o r $16. 3 ihillio n annualize da t a3 % discoun t

rate . Cos t

o f thi s rul e ar e estimate dt o b e approximatel y $9. 3 millio n annualize da t a7 % discoun t

rate , o r $9. 3 millio n annualize da t a 3 % discoun t

rate , ove r

a20-yea r perio do f analysis .

HI^ I Decisio n Economic s Pag e • 6Tabl e ES-3 : Accountin g Statemen t 1 Ove r20-yea rperio d j Primar y Estimate Benefits Annualize d Monetize d ($millions/year

) $15. 7

$16. 3 Estimate s

Lo w Estimate $11. 7 $12. 2 Hiq h Estimate

$21. 1 $22. 1 Yea r

Dolla r 200 9 200 9 Unit

s Discoun t Rat e 7 % 3 % Peno d Covere d 2010-202 9 2010-202 9 Costs Annualize d Monetize d ($millions/vear

) $9. 3

$9. 3 $7. 5

$7. 6 $11. 5

$11. 6 200 9

200 9 7 %

3 % 2010-202 9 2010-202 9 Fina l Regulator y Flexibilit y Analysi s Th e Fina l Rul e i s expecte dt o affec t smal l carrier s whic h ar e define db y DO T a s thos e whos e fleet s ar e mad e u p exclusivel y o f aircraf t with 6 0 seat s o r

less. ^ Component s one , two , an dfiv e o f th e Fina l Rul e - th e developmen t an dimplementatio n o f contingenc y plans , respondin g t o consume r complaints , an dadoptio n o f acustome r

servic e plan appl y t o domesti c flight s o f carrier s with regularl y schedule dpassenge r flight s tha t

hav e an y aircraf t with 3 0 o r

mor e seats . Smal l carrier s tha t collec t a t leas t 1 % o f al l domesti c passenge r revenu e mus t

als o compl y wit

h component s 3 , th e determinatio n o f chronicall y delaye dflight s a s a n unfai r practice , an d4 , th e postin g o f delay informatio n o n purchas e sites . Th e tota l presen t

valu e o f th e estimate dcos t

o f th e Rul e for

th e 1 1 smal l carrier s identifie da s havin g 6 0 o r

fewe r seat s i s $48. 9 million . Whe n tota l cost s ar e aimualize dan dcompare dt o aimual receipt s pe r

firm , cost s ar e les s tha n 0.09 % o f receipt s for

smal l carrier s fo r

whic h financial dat awer e available . Alternativ e 5 woul dals o impac t smal l trave l agencie s with onlin e bookin g engines .

' Se e 1 4 CF RChapte r

11 . Not e that

th e Smal l Busines s Administratio n definitio n i s no t used . Not e als o that

th e rul e wil l no t

appl y to carrier s wit

h fleet s tha t

consis t entirel y o f

plane s that

seat fewer than 3 0 passenge r

no r carrier s that d o no t hav e regularl y schedule dflights . H u R I Decisio n Economic s Pag e • 7

### 1 INTRODUCTIO N

Th e U.S . Departmen

t o f Transportatio n (DOT) i s presenting thi s Fina l Regulator

y Impact Analysi s (regulator

y analysi s o

r RIA) prepare db

y HDR|Decisioii Economic s (HDR ) i n suppor t o f th e Fina l Rulemaking o

n EnhancedAirline Passenge r Protections . Thi s RI

A estimate s th e economi c impact

i n term s o

f all cost s an

dbenefit s o

n passengers , airlin e carrier s an dothe r entitie s affecte

db y thi s action , a

s require db y Executiv e Orde r (EO ) 12866 . Th

e economi c impacts ar e meastlredon a

n incrementa

l basi s an dagains t th e curren t statu s o f passengers ' right s on domesti c airline carriers . A detaile ddescriptio n o

f the ProposedRule an

da n initia l assessmen

t o f th e strea mo f cost s an d benefits o f the ProposedRule wer

e provide dto the publi c fo r comment . Th

e Departmen

t ha s reviewedth e publi c comments t o bot h the ProposedRul e an

dth e initia

l Regulator

y Impact Analysi s an

dha s mad e relevan t adjustments t

o the Rule an

dRIA . A discussio n o

f the comments an dresponse s t

o th e comments ca

n b e foun di n th e Preamble t

o th e Fina l Rule . Th e estimate s o

f tota l cost s an dbenefits o

f th e Fina l Rul e an dth e alternative s assessedpresentedi n thi s RI A reflect update s i n respons e t

o th e publi c comments an

das aresult

o f furthe r research . 

### 1. 1 State d Nee d fo rRegulatio n Proposal s fo

r airlin e passenge

r protection s hav e bee

n debatedfo

r th e las t te n years . I

n Januar y 1999 , majo r tarma c delay s lef

t som e Northwes t

Airline s (Northwest

) passenger s snowboun

don plane s i n Detroit fo r ove r eigh t hour s attractin g nationa

l medi aattention. ^ Incident s suc h as thi s ledto Congressiona

l discussion s to enhanc e passenge r right s t o basi c comfort, safet

y an d convenienc e whe

n subjectedt

o length y tarma c delays . Thi s ledt

o Congressiona

l proposal s fo

r a "Passenge r Bil l o f Rights." ^ Congres s an

dth e Ai r Transpor t Associatio n (ATA

) cam e t o a n agreemen t tha t gav e the carrier s the opportunit y to addres s thes e concern s as a n industry , withou

t regulation. ^ Thi s ledsom

e carrier s t o adopt mor e stringen t consume r servic e plan s tha

t addressed how t o dea l wit h majo r tarma c delays . However , no t

all carrier s adoptedsuc

h plans ; an

dth e industr y soo n face dothe r issues , including th e drop in deman dfollowing th e terroris t

attack s on Septembe r 11 , 2001 , an

drisin g fiie

l prices . A s aresult , carrier s focu s o n passenge r right s an d tarma c delay s subsided , resultin g i n incomplet

e efforts . I

n 2008 , no t

all carrier s hav e explicit , enhancedpassenge

r protection s relate dto length y tarma c delays . A review b y the DO T Inspector Genera l (IG) i n 2000 , conducteda

t th e reques t

o f Congress , concludedtha

t carrier s ha

dmad e improvements but

ha dno t don e enough. ^

* Se e U S Departmen t

o f Transportation' s Inspecto r Genera l i n "Action s Neede dt o Minimiz e Long , On-Boar dFligh t Delays, " Offic e o f

th e Inspecto r

General , U S Departmen t o f Transportation , report

AV-2007-077 , Septembe r 25 , 2007 . ^ Ravich , Timoth y M . "Re-Regulatio n an dAirlin e Passengers ' Rights. " Journa l o f Ai r La w an dCommerce . 2002 . an dCNJ^.com , "Clinto n administratio n propose s passenge r right s legislation, " Marc h 10 , 1999 . * "Action s Neede dt o Minimiz e Long , On-Boar dFligh t Delays, " Offic e o f

th e Inspecto r

General . ^ "Fina l Repor t

o n AWin e Custome r

Servic e Commitment, " Offic e o f th e Inspecto r

General , U S Departmen t o f Transportation , report

AV-200 1 -020 , Septembe r 12,2001 . H I R I Decisio n Economic s Pag e • 8

### Significan

t tarma c delay s o

f u p t o nin e hour s occurredagain i n lat e 200 6 an dearl y 2007 , prompting anothe

r nationa l discussio n o

f th e needfo

r apassenge

r bil l o f rights . * ° The Office o

f th e Secretar

y o f Transportatio n commissionedthe I G to repor

t again o n tarma

c delay s an

d provid e recommendation s (summarizedbelo w in Section 1.1.1.2) . Thi s report , "Action s Needed to Minimiz e Long , On-Boar dFligh t Delays, " was releasedSeptembe r 25 , 2007 , an

dledt o th e AdvancedNotic e o

f ProposedRulemaking (ANPRM) o f the Passenge

r Bill o f Rights . The ANPRM , summarizedi

n Section 1.2, was publishe di n th e Federa

l Registe r Vol . 27 , No . 223 , Novembe r 20,2007 . 1.1. 1 Nee d fo rInterventio n I n ligh t o f the histor

y o f persisten t fligh t delays , significan

t on-boar ddelay s an

dincreasing custome r complaints , th e Departmen t concludedtha

t ther e i s aneedfo

r regulatio n t

o secur e airlin e passenge

r rights . Afte

r incident s o

f notabl e delay s i

n 1999 , carrier s agreedto tak e voluntar y action t o reduc e custome

r complaint s an

dself-regulation ha

dbeen the focu s o

f effort s to improve custome

r servic e during th e las t

decade . Continuedincident s o f long on-boar

ddelay s an da n increas e in consume

r complaint s hav e ledDO

T to conclud

e tha t th e industry' s voluntar

y respons e fall s shor

t o f identifiedneeds :
• Onl y 7 o f 1 8 airline s wit

h a t leas t 1 % o f domesti c scheduled-servic e passenge r revenue s hav e institute dfixedlimit s t o on-tarma

c delay s prior

t o th e provisio n o

f amenitie s an

d deplaning ;
• Onl y 5 o f 1 8 airline s wit

h a t leas t 1 % o f domesti c scheduled-servic e passenge r revenue s hav e adoptedcustome

r servic e plan s wit

h regula r sel f audits ; an d

• Onl y 3 o f 1 8 airline s wit

h a t leas t 1 % o f domesti c scheduled-servic e passenge r revenue s publis h dela

y datao n thei r websites . Th e DO T believe s tha

t regulatio n i s warrantedto ensur e tha t all airline s mee

t passenge r car e minimu mstandard s an

dt o avoiddevelopmen

t o f competitiv e pressur

e t o minimiz e passenge

r car e beyondacceptabl e levels . 1.1.1. 1 Overvie w I n th e 1 2 month s ending Ma y 2009 , th e UnitedState s ha d10 5 carrier s wit

h scheduledservic e fo

r mor e tha n 9. 5 millio n flights serving 62 5 millio n passengers . O f the 10 5 carrier s (includin g feede r airlines) , 2 0 accountedfo r a t leas t 1 % o f domesti c passenge

r revenues , which require d the mt o repor t on-tim e performanc e dat

at o th e Burea

u o f Transportatio n Statistic s (se e Tabl e 2 i n Section 1. 3 below) . Th e airline industr

y i s undergoing consolidation . ATA , Aloha , Frontier , an dSkybu s airline s hav e declaredbankruptc y i

n 200 7 or 2008.' * hi April 2008 , DeltaAirline s (Delta ) an dNorthwes t

' " "Action s Neede dt o Minimiz e Long , On-Boar dFligh t Delays, " Offic e o f

th e Inspecto r

General . " Thompson , Maris aE . "Airlin e Bankruptcies : Who' s Nex t t o Fall? " Morningstar , Ma y 28 , 2008 . H I R I Decisio n Economic s Pag e • 9

### Airline s (Northwest ) agreedto merge . Unitedan d Continenta

l announceda

n inten t t o for ma marketing alliance . A

t the sam e time , increasing fue

l price s ar e creatin g additiona

l pressures.' ^ Meanwhile , dela

y trends , complaint s pe

r enplanements , an

d length y tarma c delay s hav e increasedin recen

t years . Delay s impac t

bot h carrier s an

d passengers . Som

e delays , suc

h as thos e experience don th e tarma c versu s thos e experiencedin aterminal , impos e greate r discomfor t and/o r limite dopportunit

y t o us e tim e productively fo

r passengers . Th e figure s below illustrat

e recen t trend s i n complaint s an

ddelays . Las t

year , 40 % o

f complaint s to airline s concernedfligh t problems , acategor

y including delays , cancellation s an d missed connection s (se e Figur

e 1) . Sinc e 2003 , the numbe r o f complaint s pe

r 100,000 enplanement s increasedb y nearly 50 % (Figur e 2) . I n the sam e tim e period , taxi-out

time s increasedb y 55 % (Figur e 3) , wit h adecreasing portio n o

f taxi-out time s o f 1 5 minute s o

r les s (Figur

e 4) . Figur e 1 : Complaint s pe r100,00 0 Enplanement s i n 200 7 b y Category , b y Airline s wit h Reportin g '^equireme^t s

Southwes t ExpressJe t Frontie r Skywes t Hawaiia n Alask a JetBlu e Mes a Airline s AirTra n Pinnacl e Continenta l Northwes t America n an d America n Eagl e Delta , incl . Comair , AS A

Unite d U S Airway s Source : Air

Trave l Consume r

Report , USDOT .

' ^ Wald , Matthe w L . "Delt aan dNorthwes t Defen daMerger, " Ne w Yor k Times , May 9 , 2008 . ' ^ Stone , Rod . "Mor e Fue l Surcharge s Coul dCur b Ai r Travel, " Wal l Stree t

Journal , Jun e 3 , 2008 . H J l I Decisio n Econoniic s Pag e • 1 0Figur e 2 : 200 3 - 200 7 Complaint s pe r100,00 0 Enplanements , fo rAirline s wit h Fteportin g

Requirement s



### i^'.': ' Source : Ai rTrave l Consume rReport , USDOT . igur e 3 : Tax i Ou t Tim e fo rAirport s (minutes ) 8,000,00 0

6,000,00 0

1,000,00 0

199 5 199 6 199 7 199 8 199 9 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 Source : Burea

u o f Transportatio n Statistics .

HZR . I Decisio n Economic s Pag e • 1 1Figur e 100 % - 90% - 80 % 70 % 60 % 50 % 40 % - 30 % 20 % • 10 % • 4 : Tax i Ou t Tim e fo rAl l i /Virport s ,



## - vn p g m~

~ 

# • :.•. . •,....•:.• i i mm W

^ . \

i 

# • 

# • 

# n I

(

r

1 .• •

199 5 199 6 199 7 199 8 199 9 tim e segment s a s % o f tota l



## m m m 

# ' 1 Kv l 

# ...•:.. . .•'... I 

# I I I

; * • ; '•i -

. ••1 ' ••-.; '

. 1 •

.-

200 0 2001 200 2 

# • n 1 1 n B~ ' 

# :- | 

# 1 IJ : 

# 1 

# 1 II I 

# 1 II I 

# 1 1 1

, | i^i j B Greate rtha n 6 0 B31-6 0
• 16-3 0 1 SO-1 5 

### m »

S 

# i ti l w ,• «
200 3 200 4 200 5 200 6 200 7 Source : Burea

u o f Transportation Statistics , T-lO O database . Figur e 5 : Tax i Ou t Tim e fo rAl l Airports : Onl y flight s wit h Tax i ou t tim e greate rtha n 6 0 minute s 90,00 0

10,00 0 199 6 199 7 1 200 0 200 1 200 2 200 3 200 4 200 5 200 6 200 7 Source : Burea

u o f Transportation Statistics , T-100 databas e 1.1.1. 2 Lates t Significan t Incident s o f Extende d Tarma c Delay s I n 2007 , th e Offic e o f

th e Secretary o f

Transportatio n commissione dth e DO T I G to : 1 ) Report

o n tw o specifi c incident s involvin g America n Airline s (American ) an d JetBlu e Airway s (JetBlue ) i n whic h passenger s wer e strande do n aircraf t fo r extende dperiod s o f

time ;

H I R I Decisio n Economic s Pag e • 1 2

### 2 ) Examine Ai r Transpor t Associatio n (ATA

) membe r airline s custome

r servic e plans , contract s o f carriage , an

dinterna l policie s dealing wit

h long , on-boar

ddelays ; 3 ) Highligh

t bes t practice s to hel

p dea l wit h thes e situations ; an

d 4 ) Provid

e recommendation s o n wha t airlines , airports , an

dthe governmen

t ca n d o to preven t recurrenc e o

f suc h events . The I G repor t summarize s th e America

n an dJetBlu e incident s to establis h afoundation fo r recommendation s to enhanc e passenge r rights . Thes e incident s wer e causedby sever

e weathe r condition s an

da n uncoordinate deffor

t to resolv e issue s fo

r passenger s on th e tarmac . Th e America

n fligh t dela y occurredo n Decembe

r 29 , 2006 , whe

n th e Dallas-For

t Wort h are a experiencedlightnin g storm s an datornado warning . The airpor t shu t down operation s severa

l time s ove r a n eight-hou

r perio dan dAmerica n divertedove

r 10 0 flights to othe

r airports . Man

y passenger s on diverte dflights wer e o n th e tarma

c fo r u p to nin e hours . The JetBlu e cas e happene do n Februar y 14 , 2007 , whe

n asnowstor

mhi t th e Northeast , strandin g hundred s o

f JetBlu e passenger s o

n the tarma

c a t JF K Internationa

l Airpor t (JFK) , som

e fo r mor e tha n te n hours . A

t one point , JetBlu e ha

d5 2 aircraf

t on th e groun

da t JFK wit h onl y 2 1 gate s available . JetBlu e publicly admittedshortcoming s i n the wa y i t handledthi s situation . Th e I G repor t note s tha t fligh t delay s ar e increasing , wit

h acortespondin g increas e in on-boar d delays . 1.1. 2 Recommendation s o f tli e Departmen t o f Transportation' s Inspecto rGenera l The I G repor t concludedtha

t i n ligh t o f recen t events , DO

T shouldtak

e amor e activ e rol e i

n overseeing custome

r servic e issues , an

dtha t som e action s b y th e DOT , th e airlines , airports , an d th e Federa l Aviatio n Administratio n (FAA ) ca n begin immediately . To improve accotmtability , enforcement , an

dprotectio n afforde

dto ai r travelers , the I

G recommendedth e followin g to th e Secretar y o f Transportation : 1 . Requir e eac h certificatedan

dcommute

r airline tha

t provide s domesti c scheduledservic e using an y aircraf t wit h mor e tha n 3 0 passenge

r seats t o (a ) defin e wha t constitute s a

n extendedperio do

f time ; (b ) set

atim e limit on dela y duration s befor

e deplanin g passengers ; an

d(c ) incorporat

e suc h policie s i

n it s contrac t

o f carriag e an

dpos t on it s Interne t site . 2 . Requir e all airline s tha

t repor t on-tim e performanc e to DO

T pursuan t t o 1 4 CF RPar t 23 4 t o establis h specific target s fo r reducing chronicall

y delayedor

cancelledflights . 3 . Requir e all airline s tha

t repor t on-tim e performanc e t

o DO T pursuan t t o 1 4 CF RPar t 23 4 t o pos t on-tim e fligh t performanc e information o n their Interne t sites . 4 . Requir e all airline s tha

t repor t on-tim e performanc e t

o DO T pursuan t t o 1 4 CF RPar t 23 4 to disclos e to customer s a

t the tim e o f booking , withou

t being asked , th e prior

month' s

H K I Decision Economic

s Pag e • 1 3

### on-tim e performanc e rat

e fo r thos e flights tha

t hav e bee n delayed(i.e. , fo

r 3 0 minute s or longer ) o r cancelle d40 % o

r mor e o f the time . 5 . Requir e eac h certificatedan

dcommute

r airline tha

t provide s domesti c scheduledservic e using an y aircraf t wit h mor e tha n 3 0 passenge

r seat s t o self-audi t it s custome

r servic e plan . 6 . Requir e large - an

dmedium-hu

b airpor t operator s t

o establis h an

dimplemen

t aproces s fo r monitoring an

dmitigatin g long , on-boar

ddelay s tha

t involve s contacting the airline t o reques t apla n o f action afte r a n aircraf t ha s remainedfo

r tw o hoitf s o n the tarmac . 7 . Establis h anationa

l task force fo r airlines , airports , an

dFA A t o coordinat

e an ddevelo p contingenc y plan s t

o dea l wit h length y delays , working wit

h carrier s an

dairport s t o shar

e facilitie s an

dmak e gate s availabl e in a

n emergency . 1.1. 3 Industr y Action s Som e carrier s hav e take

n step s to enhanc e passenge r protection s to preven

t futur e occurrence s o

f majo r delay s o n th e tarmac . Alask aAirline s (Alaska) , American , Continental , Hawaiia n Airline s (Hawaiian) , Northwest , Southwes t Airline s (Southwest

) an dUS Airway s hav e adoptedcontingenc y plan s t o ensur e foo d an dwate r during tarma

c delays . Eac

h o f thes e airline s (except

U S Airways ) addressed procedure s t

o deplane passenger s during extendedtarma c delay s in contingency plans . JetBlu e als o addressedth e needto deplane passengers . Som e carrier s pos t

dela y dat ao n thei r websites , bu

t onl y thre e majo

r carrier s do so : American , Continenta

l an dUnited . Alaska , Continental , Northwest , Southwes t an dUnitedhav e initiate dself-audit s o f thei r custome r servic e plans . The Secretar

y o f Transportatio n commissionedaNationa l Tas k Forc e to develo

p mode l contingenc y plan s t

o dea l wit h length y airline on-boar

ddelay s b y the fal

l o f 2008 . Despit e thes e actions , DO

T believe s tha

t fo r th e reason s outline dabove , regulatio n i s warranted . 

### 1. 2 Fina l Regulatio n I n th e ANPR

M on Enhancing Airlin e Passenge r Protections , DO

T aimounce

di t was considering adopting arul e tha

t consiste do

f seve n components . Afte

r reviewing comments in respons e to th e ANPRM , DO

T droppedtw o component s —thos e requirin g carrier s t o publis h complain t dat ao n thei r website s an

drequirin g carrier s t

o repor t on-tim e performanc e o

f internationa

l flights . The remaining component s wer e presentedi

n the NPR M an dar e peir t o f th e Fina l Rule : ' ^

" ^ Reader s shoul dnot e that althoug h th e regulator y impac t evaluatio n attempt s t o mirro r th e term s an dwordin g o f th e regulation , n o attemp t i s mad e t o precisel y replicat e th e regulatory languag e an dreader s ar e cautione dtha t th e t v R \ Decisio n Economic s Pag e • 1 4

### 1 . Requir e carrier s t o adop t an dpublis h contingenc y plan s fo r length y tarma c delay s thei r websites . An

y certificatedo

r commute r ai r carrie r tha t operate s domesti c scheduled passenge r servic e (including charte

r services ) tha

t use s an y aircraf t wit h 3 0 or mor e passenge r seat s will b e require dto develop acontingency pla n fo r long grounddelay s on the tarma c fo r all it s flights , including thos e on aircraf t containing fewe

r tha n 3 0 seats . Each contingenc y pla

n will specif

y tha t th e carrie r will ensur

e a ) tha t passenger s o n plane s delayedon the tarma c fo r tw o o r mor e hour s will hav e acces s to food , water , clea n lavatories , an

dth e assistanc e o

f medica l persona l i f needed , an

db ) passenger s on plane s delayedo n th e tarma

c fo r thre e hour s will b e permitte dto deplane (unles s ther e i s asafet y and/o r security-relate dimpedimen t to deplaning passenger s o

r AT C advise s th e pilo t

tha t permittin g passenger s to retur n t o th e gat e o r disembar k wouldsignificantl

y disrupt airpor t operations) . "^^Contingenc

y plan s mus t

b e mad e availabl e on carrie

r websites . Carrier s will als o b e require dt o maintain information fo

r tw o years o n delay s tha

t trigge r th e contingency plan . Th e information will include th e lengt h o f th e delay , th e caus e o

f th e dela y an didentif y step s take

n by th e carrie

r to alleviat e passenge r discomfort . 2 . Requir e carrier s t o respon dt o consume r problems . Ever

y certificatedan

dcommute

r ai r carrie r tha t operate s scheduleddomesti c passenge r servic e using an

y aircraf t wit h 3 0 o r mor e passenge

r seat s will b e require dto designat e a n employee a

t it s syste m operation s cente

r an da t eac h airpor t dispatch cente

r t o monito r delay s an dt o hav e inpu

t on decision s regarding fligh t cancellations . Eac

h suc h carrie r will als o b e require dt o provid e information o n how t

o fil e consume r complaint s a

t eac h airpor t dispatch center , on it s websit

e an don all e-ticke

t confirmations . Eac

h suc h carrie r wil l b e require dt o sen

d asubstantiv e respons e t

o eac h consume

r complain t withi n 6 0 day s o

f receip t an d acknowledg e receip t

o f the complain

t within 3 0 days.' ^ 3 . Declar e th e operatio n o f flight s tha t

remai n chronicall y delaye dt o b e a n unfai r an d deceptiv e practic e an da n unfai r metho do

f competition . Th

e Fina l Rule define s a chronicall y delayedfligh

t as afligh t tha t i s operatedby acarrie

r tha t i s carryin g 1 % o

r mor e o f all domesti c passengers , tha t i s flown a

t leas t 1 0 time s in amonth , an

dtha t arrive s mor

e tha n 3 0 minute s lat

e mor e tha n 50 % o f the time . I

f thi s flight

continue s t

o operat e fo r fou r consecutiv e month s a

t thi s level o

f delay , i t wil l b e considereda

n unfai r an ddeceptiv e practic e an

dsubject t o enforcemen

t action . 4 . Requir e carrier s t o publis h dela y dat ao n thei r

websites . Th e DO

T propose s t o requir

e tha t airline s tha

t ar e currently require dto repor t on-tim e performanc e dat

ato th e Burea

u o f Transportatio n Statistic s (BTS ) (i.e. , reportin g carriers ) t o publis h som

e dela y information on thei

r website s fo

r eac h flight it operate s an

dfo r each flight

it s U.S . code shar e partner s operat

e fo r whic h schedule information i s available . Thi s information i s t o includ e th e percentag e o

f on-tim e arrivals , th e percentag e o f artival s delayedmor

e tha n 3 0 minute s wit

h specia l highlightin g i

f th e flight was lat e mor e tha n 50 % o f th e time an

d actua l regulatory tex t

an dno t th e tex t o f th e RI A convey s th e specifi c regulatory requirements . Fo r mor e detai l o n th e propose dregulation , se e th e Notic e o f Fina l Rulemaking . ' ^ Se e preambl e t o Fina l Rul e for greate r detai l o n safet

y and/o r ai r traffi c contro l exceptions . ' * Th e Rul e wil l no t

requir e resolutio n o f

th e complaint , bu t

rathe r atarge t respons e upo n receipt . Jr£ R I Decisio n Economic s Pag e •I S

### th e percentag e o f cancellation s i

f 5 percen t o r mor e o f th e flight's operation s wer e cancele din th e coveredmonth . Ther e wil l b e tw o option s fo

r datapresentatio n - on th e we b pag e wit h th e initia l listing s o r b y hyperlin

k on tha t page . 5 . Eac h carrie r

mus t adop t acustome r

servic e pla n an dself-audi t adherenc e t o it . Th e DO T propose s requirin g an

y certificatedo

r commute r ai r carrie r tha t operate s scheduled domesti c scheduledpassenge r servic e t o adopt acustome r servic e pla

n whic h addres s th e issue s coveredb y th e 1 2 part s o f th e Ai r Transpor t Association' s (ATA

) Custome r Servic e Commitmen

t an dt o self-audi t adherenc e t

o thi s custome

r servic e plan . 

### 1. 3 Alternative s Th e Offic e o f Managemen

t an dBudge t (OMB ) state s tha

t aregulator

y impact analysi s (als o calle daregulator

y evaluation ) shouldconside r alternative s t

o the Fina l Rule o r regulatio n being evaluated. ' Thi s RI

A include s fiv

e alternative s t

o variou s component s o

f th e Fina l Rule : Alternativ e 1 : Thi s altemativ e affect s Componen

t 1 (contingency plan s fo

r length y tarma c delays ) an dassume s DOT-imposedtarma c dela y limit s o f tw o hour s befor

e guarantee o

f food , water , etc , an

dfou r hour s (instea

do f thre e hours ) befor

e allowing passenger s t

o deplane . Thi s contingency pla

n wouldb e requiredfo

r al l carrier s wit

h aircraf t seating 3 0 passenger s o r

more . All othe r component s o

f the Fina l Rule ar e maintained . Altemativ e 2 : Thi s altemativ e als o affect s Componen

t 1 an dallow s carrier s to determine th e tim e triggers . Thi s was th e proposedoption fo r th e Rul e describe di

n th e NPRM . Basedupo n existin g carrie

r contingency plans , i

t was estimate dtha

t tim e limit s institute dby carrie s will converg e ont

o atarma c dela y limit s o f tw o hour s befor

e guarantee o

f food , water , etc , an

dfiv e hour s befor

e allowing passenger s to deplane'^ . Contingency plan s wouldb e require dfo r all carrier s wit

h aircraf t seating 3 0 passenger s or

more . All othe

r component s o

f the Fina l Rul e ar e maintained . Altemativ e 3 : Thi s altemativ e require s th e contingenc y pla

n (define di n Componen

t 1 ) to appl y t o carrier s tha

t operat e a t leas t on e flight wit h aircraf t seating 6 0 o

r mor e passenger s (instea

do f 3 0 or more) . Al l othe r component s o

f the Fina l Rule ar e maintained . Altemativ e 4 : Thi s altemativ e redefine s wha t constitute s achronically delayedflight i n Componen t 3 (whic h declare s chronicall

y delayedflights "unfai

r an ddeceptive" ) t

o on e tha t arrive s a t leas t 3 0 minute s lat

e a t leas t 60 % o f time , (not

50 % o f time ) fo r thre e consecutiv e calenda r quarters . All othe

r component s o

f the Fina l Rule ar e maintained . Altemativ e 5 : Thi s altemativ e wouldrequir e reportin g carrier s an

donline travel agencie s to pos t dela y dat aon thei r website s (Componen

t 4 o f th e Fina l Rule) . Travel agencie s tha t operat e exclusivel y online , a s well as thos e tha

t allo w customer s t

o purchas e airline ticket s online , would b e require dto publis h som e dela y information o n their

website s befor

e th e poin t o f purchase , simila r t o thi s requiremen

t fo r reportin g carriers .

" Circular

A-4 , Offic e o f

Managemen t

an dBudget , Septembe r

17 , 2003 . ' ^ Fo r greate r detai l se e Initia l Regulatory Impac t Analysi s o f

Propose dAirlin e Passenge r Protections , Septembe r 2008 . FER I Decisio n Economic s Pag e • 1 6Tabl e 1 : Summar y o f Alternative s '

OifferencebetMtteitoAlternBtive s an d Fina l Rul e b y Component s < ; ' i::::'^;'- - •'> • AlftMiiative :

Fina l Rul e

Alternativ e 1

Alternativ e 2

Alternativ e 3

Alternativ e 4
Alternativ e 5 Component 1

Contingenc y plan s fo rlon g on-boar d delays , t o Includ e 2 hou r trigge rfo r food/water

/ clea n lavatorie s an d a 3 hou r " limi t befor e permittin g deplaning . Applie s t o carrier s operatin g a t leas t on e fligh t wit h aircraf t o f 3 0 o rmor e seat s Tim e limit s o f 2 hour s fo rfoo d an d wate ran d 4 hour s fo r deplanin g Carrie r determine d tim e limit s o f 2 hour s fo rfoo d an d wate ran d 5 hour s fo r deplanin g Applie s onl y t o carrier s operatin g a t leas t on e fligh t wit h aircraf t o f mor e tha n 6 0 seat s (Instea d o f 30 + seats )
N o differenc e

N o differenc e Componen t 2

Provid e Informatio n fo r filin g a complaint . Provid e substantiv e respons e withi n 6 0 days . Applie s t o carrier s wit h schedule d domesti c servic e operatin g a t leas t on e fligh t wit h aircraf t o f 3 0 o r mor e seat s

N o differenc e

N o differenc e

N o differenc e

N o differenc e

N o differenc e Componen t 3 Declar e flight s tha t arriv e 30 + minute s lat e mor e tha n 50 % o f th e tim e t o b e chronicall y delayed . Applie s t o carrier s wit h 1 % o f domesti c passenge r revenu e

N o differenc e

N o differenc e

N o differenc e Differen t definitio n o f a chronicall y delaye d fligh t (lat e 30 + minute s a t leas t 60 % o f th e tim e ove rtw o consecutiv e quarters ) N o differenc e :c<mptiHm A Reportin g carrier s t o publis h dela y dat a o n website . Applie s t o carrier s wit h 1 % o f domesti c passenge r revenu e

N o differenc e

N o differenc e

N o differenc e

N o differenc e Applie s t o onlin e trave l agencie s I n additio n t o reportin g carrier s Coitipomrtt s

Carrier s wit h schedule d domesti c servic e t o self-audi t complianc e wit h custome r servic e plans . Applie s t o carrier s wit h schedule d domesti c servic e operatin g a t leas t on e fligh t wit h aircraf t o f 3 0 o rmor e seat s

N o differenc e

N o differenc e

N o differenc e

N o differenc e

N o differenc e 

### Tabl e 2 list s carrier s requiredto compl y wit h all components . The 1 2 smal l cartier s wit

h fleets o f aircraf t tha t sea t 3 0 t o 6 0 passenger s ar

e liste di n Tabl e 3 . Thes e smal

l carrier s will b e subject

to

H Z R Decisio n EconiHnic s Page * 1 7

### som

e bu t not all components o

f th e Fina l Rule . Carrier s wit

h fleets composedonl

y o f aircraf t tha t sea t fewe r tha n 3 0 ar e not coveredb y th e Fina

l Rule.' ^ Tabl e 2 : To p 1 % o f Domesti c Passenge rCarrier s AirTra n Alask a Americ a Wes t America n an d America n Eagl e Continenta l Delta , incl . Comair , AS A ExpressJe t Frontie r Hawaiia n JetBlu e Mes a Airline s Northwes t Pinnacl e (Northwes t Airlink ) SkyWes t Soutiiwes t Unite d U S Airway s

Ai rTranspor t Internationa l Amerista rAi rCarg o Cap e Ai r Chautauqu a Airline s Inc . Tabl e 3 : Smal l Carrier s (wit h Fleet s Consistin g Onl y o f Plane s betwee n 3 0 an d 6 0 Seats ) 3Oan40«tS<Mlr

^

•>•• • • Colga n Ai r Co m m utai rAk a Cha m plai n Enterprises , Inc . Er a Aviatio n ExpressJe t Airline s Inc . Islan d Ai rHawai i Piedmon t Airline s Tran s State s Airline s

" Fo r Regulatory Evaluations , smal l carrier s ar e thos e wit h plan e fleet s al l o f

whic h hav e 6 0 seat s o r

fewer , a s pe r 1 4 CF RChapte r

11 . Se e Regulatory Flexibilit y Analysi s i n chapte r six . Othe r

carrier s hav e allie dfor

an dreceive d certificatio n fromth e Departmen t a s smal l carriers , bu t

d o no t hav e regularl y schedule dflight s o n aircraf t seatin g mor e than 3 0 passengers , an dthu s ar e no t require dt o comply . Th e smal l carrier s wer e identifie db y reviewin g flight arriva l dat afromBT S an dcalculatin g th e averag e numbe r o f seat s fo r eac h flight

flow n i n 2007 . K R ] Decisio n Economic s Page * 1 8

### BENEFIT-COS T ANALYSI S APPROAC H

Thi s chapte r

discusse s th e methodologica l framewor k use dt o estimat e th e cost s an dbenefit s o f th e Fina l Rule , Enhancin g Airlin e Passenge r Protections . It

include s an overvie w o f th e framewor k use dt o predic t

likel y carrie r

action s t o compl y with th e Rule' s fiv e component s an da discussio n o f

associate dcost s an dbenefit s t o carrier s an dth e public . Th e fiv e component s o f th e Fina l Rul e (se e Sectio n 1.2) an daltemative s considere db y DO T ar e noted . Overal l assumption s ar e als o presented , includin g ke y dat aassumptions . OM B Circular

A- 4 stipulate s tha t

aregulator y analysi s shoul daccoun t for onl y cost s an dbenefit s tha t aris e a s aresul t

o f th e regulator y action . Thi s RI A estimate s th e cost s an dbenefit s likel y t o aris e fro mth e Fina l Rule , takin g int o accoun t tha t certai n carrier s ar e alread y complian t with part s o f th e Fina l Rule . Th e RI A estimate s incrementa l cost s an dbenefit s fro mth e Fina l Rul e an dth e altematives , i.e. , th e additiona l cost s an dbenefit s generate db y action s take n specificall y for complianc e relativ e t o anon-regulate denvirormient . 

### 2. 1 Overvie w o f Analytica l Framewor k Th e purpos e o f

th e Fina l Rul e i s t o increas e ai r passenge r

protection s throug h improve d managemen t

o f fligh t delays , disseminatio n o f dela y information , an denhance dcustome r service . Thre e o f

th e Fina l Rule' s fiv e component s relat e t o flight delays ; tw o relat e t o passenge r complaints . Th e component s relatin g t o delay s (Component s 1 , 3 , an d4 ) ar e assume dt o requir e carrie r action s tha t

wil l affec t

th e qualit y o f

th e traveler' s experienc e b y eithe r decreasin g th e portio n o f

th e tri p spen t

i n les s comfortabl e situation s (suc h a s waitin g o n th e tarma c versu s waitin g i n th e terminal ) o r b y increasin g th e passenger' s confidenc e i n th e reliabilit y o f th e flight' s on-tim e arrival . Specifically , for Component s 1 (Implementin g Contingenc y Plans) , 3 (Designatio n o f

Chronicall y Delaye dFlights) , an d4 (Publicatio n o f Dela y Dat ao n Carrie r Website ) benefit s ar e calculate da s change s t o th e valu e passenger s ar e likel y t o pu t o n aportio n o f thei r tri p perceive da s potentiall y mor e comfortabl e o r th e valu e the y put

o n increase d certaint y o f

arriva l time . Th e component s relatin g t o passenge r complaint s ar e assume dt o eithe r mak e filin g complaint s easie r o r t o improv e custome r

service . Componen t

2 make s i t

easie r for apassenge r

t o fin d informatio n t o fil e acomplain t an drequire s timel y an dspecifi c response s t o complaints . B y requirin g eas y acces s t o informatio n o n ho w t o complai n (o n e-tickets , websites , an da t gate s an d ticke t counters) , th e amoun t

o f tim e neede dt o fil e acomplain t wil l decrease , lessenin g th e tota l cos t t o th e consume r

t o tak e thi s action . Benefit s ar e calculate da s cost s save di n filin g a complain t du e t o tim e saved . A likel y increas e i n complaint s i s als o incorporate db y usin g a consume r surplu s methodolog y tha t attempt s t o measur e th e tota l valu e t o consumer s o f adeclin e i n cos t alon g with acorrespondin g increas e i n quantity . ^ ° Meanwhile , th e substantiv e carrie r respons e t o complaint s shoul dprovid e increase dsatisfactio n fro matargete dresponse .

^ ° Th e incrementa l increas e i n compensatio n t o consumer s ha s no t bee n estimate dbecaus e o f alac k o f informatio n abou t th e type s o f

complaint s tha

t wil l b e mad e base do n th e declinin g cos t o f complainin g an dlac k

o f detai l abou t likel y carrie r

responses . Thus , th e actua l benefit s o f thi s componen t

ar e likel y underestimated . H I R I Decisio n Economic s Pag e • 1 9

### Componen

t 5 require s carrier s t

o adopt standar dcustome r servic e commitment s an

dto audi t adherenc e t

o thos e commitments , which shoul dlea dto systemati c improvements t o overall custome r servic e (basedo

n the experienc e o

f carrier s tha

t hav e alread

y undertaken thes e practices) . Indeed , amon

g cartier s require dt

o repor t dela y dat at o th e Burea

u o f Transportatio n Statistic s (BTS) , thos e tha t self-auditedthei

r custome r servic e plan s sa

w greate r decline s i

n complaint s tha

n carrier s tha

t di dno t self-audi t i n th e sam e time-frame.^ ' Th

e benefits o

f thi s requiremen

t will include improvedlevel s o f servic e i n carrier s tha

t di dno t alread y self-audit . To date , no goodestimat

e o f the valu e t

o customer s o

f thi s expecteddecline in complaint s ha s bee n identified . Therefore , thi s RI A doe s no t

attempt to estimat e th e quantitativ e valu e o

f th e benefit s o f Componen

t 5 , addressing benefits solel y i n discussio n o

f qualitativ e (i.e. , non-monetized) impacts . Becaus e th e cos t

o f complianc e i s includedi

n the quantitativ e evaluation , i t i s expected tha t the NP V wouldb e highe

r i f the benefit s o

f thi s componen

t couldb e adequatel

y monetized . Cost s t o carrier s ar

e estimate das th e additiona l cos t t o undertak

e a n actio n require dby o

r generatedb y arequiremen

t i n th e Fina l Rule , suc

h as posting dela

y dat aon acarrie

r websit e o r deplaning passenger s to avoida n extendedtarma

c delay . Detail s o f th e cost s an

dbenefits relate dt

o eac h componen

t ar e describe di

n subsection s belo w detailin g the framewor

k fo r eac h component . A s notedi

n OM B Circula r A-4 , whil e not

all potentia

l benefits ca

n b e measuredor

eve n monetized , the

y shouldb e notedbecaus e they ca n stil l b e significant . Section 4. 4 describe s qualitativ e benefits tha

t caimo t b e quantitatively measured . 2.1. 1 Valu e o f Tim e Valu e o f Trave l Tim

e Saved Certain component s o

f th e Fina l Rule (such as Componen

t 1 ) will result

i n tim e save d(o r lost ) fo r individuals . I

n addition , certai n component s (Components 1,3 , an d4 ) will result

i n improved travel condition s fo

r passengers , through greate r physica l comfor t o r increasedconfidenc e in on tim e arrival . Economist s measur e th e valu e o

f tim e save dusing se

t estimate s derivedfro

m averag e wage s t

o reflect the cos t t o th e individua

l o f tim e spen t i n transi t instea do f on anothe r activity . DO

T ha s developedvalue s t

o calculat e ai r travel tim e saving s fo

r leisur e an dbusines s passengers , wit

h arang e o

f hig h t o lo w value s (se e Tabl e 4 below) . Thi s RI A use s thes e figure s t o estimat e th e valu e o

f passenge r tim e savedo r los t basedo n carriers ' complianc e wit h th e Fina l Rule . I n addition , tim

e save db y person s coming to mee t arriving passenger s i s als o calculate d an dvalueda t $10.6 0 pe r hour , th e DOT-recommendedvalue fo r loca l persona l travel.^ ^

^ ' Thi s analysi s i s base do n complaint s reporte di n th e Ai r Trave l Consume r

Report , Aviatio n Consume r Protectio n Division , U.S . Departmen t o f Transportation . Fo r

detail s se e Sectio n 2.1.6 . ^ ^ U.S . Departmen t

o f Transportation , "Revise dDepartmenta l Guidanc e Valuatio n o f Trave l Tim e i n Economi c Analysis, " 200 3 t T R I Decisio n Economic s Pag e • 2 0i , lS!«|ifitmen t o f Transportatio n Determine d Value s o f Tim e fo rAi rPassenger s t o b e Use d I n Trave l Tim e

Ai rtrave l Persona l Busines s Al l Purpose s Recommende d Hourl y Value s o f TT S $23.3 0 $40.1 0 $28.6 0 Plausibl e Range s - Lo w $20.0 0 $32.1 0 $23.8 0 Plausibl e Range s - Hig h $30.0 0 $48.1 0 $35.6 0 Source : U S Departmen t o f Transportation , "Revise d Departmenta l Guidance : Valuatio n o f Trave l Tim e i n Economi c Analysis, " 2003 , table s 4 an d 5. Als o discusse d i n "Economi c Value s fo rFA A Investmen t an d Regulator y Decisions " A Guide, " FA

A Offic e o f Aviatio n Polic y an d Plans , Decembe r31 , 2004 . Tim e Premium s fo r

Comfort/Quality o f

Experienc e Severa l aspect s o f

th e Fina l Rul e ar e designe dt o increas e travele r comfor t durin g delays . Transportatio n economist s hav e conducte dstudie s o f consume r

behavio r an ddifferent

aspect s o f use r experienc e i n transi t

systems . Thes e analyse s hav e le dt o estimate s o f premium s o n th e valu e o f use r tim e base do n th e valu e peopl e plac e o n quicker/easie r acces s t o mov e fro mon e plac e t o anothe r

an danalysi s o f

th e valu e o f

improve dcomfor

t durin g atrave l experience . Fo r example , studie s sho w tha t transi t rider s valu e sittin g mor e tha n standin g withou t regar dt o an y chang e i n tota l trave l tim e required . Traveler s als o prefe r t o spen dtim e i n transi t

rathe r tha n part o f th e tim e waitin g for

servic e if tota l tri p length i s th e sam e 2 ? Severa l aspect s o f

th e Fina l Rul e wil l shif

t th e portio n o f

tota l tri p tim e spen t

i n les s comfortabl e condition s (suc h a s th e fourt h hou r o n aplan e spen t

sittin g o n th e tarmac ) t o tim e spen t i n mor e comfortabl e condition s (th e fourt h hou r spen t i n aterminal) . Thi s RI A assume s n o chang e i n overal l tri p tim e excep t

i n case s o f

cancellatio n (se e sectio n o n ke y assumption s below) . Th e valu e o f th e differenc e i n comfor

t i s estimate dusin g th e bas e valu e o f trave l tim e save d(a s note d above ) an dapplyin g a"premium " t o tha t time . Estimate s for

thi s "comfort

premium " ar e develope dfro mresearc h literatur e i n transportatio n economics . Thes e premium s wer e derive d fro msurvey-base ddat athat reflec t trave l tim e value s tha t

incorporat e th e quality o f waiting , walkin g an dtransfe r

conditions . "Leve l o f

service " rating s ar e use dt o determin e th e valu e o f different levels . Sinc e n o specifi c estimat e o f tim e value s for

leve l o f servic e rating s for

airlin e trave l are available, value s wer e take n fro mothe r moda l studies . Th e mos t applicabl e stud y estimate datim e valu e premiu mbase do n differin g level s o f servic e tha t

incorporate dfactor s suc h a s comfort , convenienc e an dreliabilit y (se e Tabl e 5 below ) for variou s categorie s o f

publi c transportatio n an daut o users.^' * Althoug h thi s stud y di dno t attemp t t o estimat e leve l o f

servic e

^ ' Se e Willia mWaters , Th e Valu e o f Time s Saving s fo r

th e Economi c Valuatio n o f Highway Investment s i n Britis h Columbia , B C Ministry o f Transportatio n an dHighways , 199 2 a s discusse di n Transportatio n Cos t an dBenefi t Analysi s - Trave l Tim e Costs , Victori aTranspor t Polic y Institute , revise dAugus t 10 , 200 7 an dMarcu s vo n Wartbur g an dW.G . Water s II , Chapte r 2 : Congestio n Externalitie s an dth e Valu e o f Trave l Tim

e Savings , i n Toward s Estimatin g th e Socia l an dEnvironmenta l Cost s o f Transportatio n i n Canada , Anmin g Khang , e t al , eds . Cente r for Transportatio n Studies , Universit y o f Britis h Columbia , Augus t 2004 , fo r recen t review s o f

th e literature . ^ Unde r thi s framework, mos t

trave l fall s unde r

leve l o f servic e (LOS ) rating s o f

A-C . Th e differenc e in th e valu e o f tim e t o publi c transport

o r aut o passenger s betwee n th e averag e fo r LO S rating s A- C an dLO S ratin g D i s use dt o estimat e apremiu m(.34 ) t o airlin e passenger s for th e greate r

comfor t fromacces s t o food , water an dclea n lavatory facilities , sinc e tha t

i s th e nex t

leve l o f chang e i n comfor

t an dquality . Th e chang e from astandar dleve l o f comfort
H I R I Decisio n Economic s Pag e • 2 1

### premium s fo r airline passengers , we believ e the y ar e th e mos t

accurat e estimate s cmrently availabl e t o us . Basedon thi s study , apremiu mo f .3 4 wa s usedfo r the greate r comfor t derived fro macces s to food , wate

r an dclea n lavator y facilities ; apremiu

mo f .6 8 wa s usedfo

r th e greate r comfor t o f waiting i n th e termina

l rathe r tha n i n aplane on th e tarmac.'^

^ Thes e premium s ar e simila r t o thos e foun

dfo r th e valu e transit

passenger s plac e on being abl e t o sit versu s stand , whic h rang e fro

m.20 to .8 7 i

n tw o studie s tha

t addres s measuring the qualit y o f travel experience.^

^ I n th e future , we hop e to hav e studie s tha t directly measur

e airline passengers ' value s o f level s o f servic e o n whic h t o bas e ou r decisions . N o dat awas foun

dt o quantif y th e valu e o

f decreasedanxiet

y during extendedwai

t periods . Basedo n th e studie s o

f aut o an dpubli c transi t

passengers ' valu e o

f level s o f servic e summarized above , a.0 1 premiu

mwas selectedas aproxy fo r the valu e o

f decreasedanxiety/discomfor t base don knowledg e tha

t acontingency pla

n exist s during tim

e greate r tha n on e hou r spen t on th e tarma c an dunti l allowedto deplane.^ ^ Tabl e 5 : Valu e o f Tim e Premium s fo rDifferin g Ouaiitatlv e Level s o f Servic e Valu e o f Trave l Tim e fo rDifferin g Qualitativ e Level s o f Servic e (LOS ) A s a Percen t o f Averag e Wage s

Categor y Persona l Vehicl e drive r Adul t ca rpassenge r Adul t transi t passenge r- seate d Adul t transi t passenge r- standin g LO S

A - C 50 % 35 % 35 % 50 % LOS D

67 % 47 % 47 % 67 % LOS E

84 % 58 % 58 % 83 % LOS F

100 % 70 % 70 % 100 % Rati o o f

A- C t o D 1.3 4 1.3 4 1.3 4 1.3 4 Rati o o f

A- C t o E 1.6 8 1.6 8 1.6 8 1.6 8 Premiu m

Use d Fo r Adequat e Food , Wate r Lavatorie s an d Acces s t o Medica l Attentio n 0.3 4 0.3 4 0.3 4 0.3 4 Premiu m

Use d Fo r Deplanin g 0,6 8 0.6 8 0.6 8 0.6 8 LO S refer s t o level-of-servlc e an d Incorporate s qualitativ e factor s suc h a s comfort , convenience , an d reliabilit y fo rvariou s mode s reflectin g waiting , walkin g an d transfe rconditions . LO S A refer s t o th e bes t condition s an d F t o tti e wors t Source : Leve l o f servic e estimate s o f valu e o f trave l tim e fro m Tod d Litman , "Valuin g Transi t Servic e Qualit y Improvements, " th e Victori a Transpor t Polic y Institute , 2007 .

an dquality t o th e nex t

leve l o f servic e wa s th e bes t

prox y foun dfo

r th e premiu mbetwee n waitin g wit h an dwithou t basi c amenities . Th e differenc e i n th e valu e o f tim e betwee n LO S rating s A- C an dLO S ratin g E , assume dt o represen t th e subsequen t

chang e i n comfor

t an dquality , i s use dt o estimat e apremiu mfor th e greate r

comfort o f waitin g i n th e termina l instea di n th e plan e o n th e tarma c (.68) . ^ ' Se e Tabl e A-1 7 i n Appendix . ^ * Willia mWater s present s dat atha t th e differenc e betwee n th e valu e o f tim e sittin g versu s standin g i s .2 0 o f th e prevailin g wag e rat e (Willia mWaters , The Valu e o f Time s Saving s fo r

th e Economi c Valuatio n o f Highway Investment s i n Britis h Columbia , B C Minisfr y o f Transportatio n an dHighways , 1992 , a s discusse di n Transportatio n Cos t an dBenefi t

Analysi s - Trave l Tim e Costs , Victori aTranspor t Polic y Institute , revise dAugus t 10,2007) . A n olde r study (P.B . Goodwin ) present s premium s rangin g from.2 5 t o .8 7 (averagin g .50 ) fo r sittin g versu s standin g i n eithe r apubli c o r

segregate d(deman drespons e only ) vehicl e (P.B . Goodwin , Huma n Effor t an dth e Valu e o f

Trave l Time , Journa l o f

Transpor t

Economic s an dPolicy , January 1976) . ^ ^ A sensitivity analysi s i s conducte dapplyin g thi s premiu mt o al l passengers , irrespectiv e o f tim e o n tarmac . Se e sectio n 4.3 . \ x R I Decisio n Economic s Pag e • 2 2

### 2.1. 2 Valu e o f Reliabilit y an d Certaint y

Component s 3 an d4 o f th e Fina l Rule , Designatio n o f Chronicall y Delaye dFlight s an d Publicatio n o f

Dela y Dat ao n Carrie r

Websites , respectively , wil l lea dt o greate r reliabilit y a s perceive db y passengers . Th e impac t o n th e valu e o f

thi s tim e can b e estimated . Fo r Componen t

3 , Designatio n o f

Chronicall y Delaye dFlights , th e RI A assume s tha t carrier s wil l adjus t

publishe dschedule s o f

flight s i n dange r

o f bein g classifie da s chronicall y delaye dt o ensur e tha t

suc h flight s n o longe r

mee t th e dela y criteri afro mth e Fina l Rul e i n th e nex t quarter . Whil e artivin g earlie r

tha n expecte dmay caus e som e aimoyanc e for afew passengers , artivin g late r tha n expecte dcan creat e significan t trave l disraption s an dgenerat e significan t concem . Th e RI A prepare daconservativ e estimat e o f th e benefit s o f

Componen t

3 tha t doe s no t includ e a n attemp t t o estimat e th e valu e o f

possibl e misse dnon-airlin e connection s a t arriva l (suc h a s a schedule dbus) . Instead , th e valu e o f increase dreliability t o th e passenge r i s estimated . A commo n measur e o f

reliability~th e standar ddeviatio n o f trave l tim e acros s events-i s use dt o measur e th e valu e of

reliabilit y i n travel , thoug h mos t ofte n for

dail y trip s t o work,^^ Th e expecte dreductio n i n standar ddeviatio n for flight s i s 1 5 minutes . Th e increas e i n reliabilit y du e t o th e reductio n o f

standar ddeviatio n o f

trave l tim e i s reflecte da s apercentag e o f apassenger' s valu e o f tim e (betwee n 50 % an d90% , with 70 % mos t likely) . ^ ^ Th e valu e o f

tim&fo r passenger s X th e assume dvalu e o f

reliability (70% ) x th e reductio n i n standar ddeviatio n result s i n avalu e o f $5.1 6 pe r

passenger . Componen t

4 require s publicatio n o f delay dat ao n carrie r

website s t o provid e passenger s with bette r informatio n for

informe dtrave l choices . Althoug h th e primar y factor s behin dafligh t choic e ar e pric e and , t o alesse r degree , schedule , som e passenger s ma y mak e differen t choice s base do n dela y information . Whil e similar delay dat aar e availabl e o n th e BT S website , the y appea r t o b e littl e used.'^ ° A portio n o f flight s i s assume dt o hav e publishe darriva l time s reschedule d(se e sectio n belo w for greate r detail ) i n respons e t o consume r choice s base do n publishe ddela y times . Thi s wil l resul t i n mor e passenger s artivin g whe n expected . A similar calculatio n o f

benefit s fro mincrease dreliabilit y fro mreschedule darriva l time s o f chronicall y delaye dflight s i s assume dhere . 

### 2.1. 3 Ke y Assumption s Severa l ke y assumption s underli e th e developmen t o f th e framewor

k for thi s analysis , including :

• Whil e ther e ar e arang e o f possibl e action s acarrie r ma y tak e base do n enforcemen t o f th e Fina l Rul e an dit s incentives , th e RI A assume s that cartier s wil l tak e th e leas t costl y

^ ^ Se e fo r instance , Davi dBrownston e an dKenneth Small , "Valuin g Tim e an dReliability : Assessin g th e Evidenc e fromRoa dPricin g Demonstrations, " Transportatio n Researc h Par t A , 39 , 2005 . ^ ' Estimate s calculate di n Brownston e an dSmal l (2005) . ^ ^ Comment s t o th e Notic e o f Propose dRulemakin g (NPRM ) o n th e publicatio n o f delay dat ainclude dboth industry an dconsume r

groups . Whil e som e i n th e industry note dexistenc e o f dela y dat ao n th e BT S website , consume r group s note dthat

fe w peopl e acces s dat aat thi s location . DO T agree s tha t fe w passenger s us e dela y dat a o n BT S an dtha t

mos t ma y no t eve n b e awar e o f

it . H X l I Decisio n Economic s Pag e • 2 3•

• response . (Othe r

potentia l response s ar e note di n th e discussio n o f qualitativ e an dnon monetize dbenefit s i n Sectio n 3.4 ) I n general , th e Fina l Rul e wil l not resul t i n change s i n overal l tri p trave l time . Componen t 1 , th e Developmen t

an dImplementatio n o f

aContingenc y Pla n for

Extende dTarma c Delays , may mov e passenger s fro mon e plac e t o anothe r (fro maplan e o n th e tarma c t o th e terminal ) i n afew situations , wit

h correspondin g change s i n comfor t o r condition/typ e o f

experience , thi s i s no t

expecte dt o impac t

actua l tri p tim e excep t

i n limite dsituation s wher e acartie r cancel s afligh t

rathe r tha n deplanin g an dreboarding . Exception s for safet y concem s an dai r traffi c contro l managemen t ar e expecte dt o mitigat e additiona l delays . Th e analysi s doe s no t

attemp t t o estimat e whic h portio n o f flight s with extensiv e on-tarma c delay s beyon dthre e hour s wil l no t deplan e du e t o th e exception s fo r safet y an dai r traffi c control . A s such , th e analysi s likel y overestimate s th e numbe r o f deplanin g flight s an d passengers , an dtherefor e likel y overestimate s tota l cost s an dbenefit s a s well . Th e Fina l Rul e wil l not , i n an do f itself , generat e a

n appreciabl e impac t

o n overal l trave l demand , an dthi s RI A doe s no t mode l chang e i n demand.^ ' Thi s i s deeme daconservativ e assumptio n a s i t

may resul t

i n a n imderstatemen t

o f benefits . • Componen t

2 , requirin g carrier s t o provid e complain t contac t informatio n an dt o respon dt o consume r complaints , i s assume dt o not chang e th e rat e at

whic h carrier s resolv e complaints . • It i s assume dtha t

cartier s alread y takin g som e action s i n th e Fina l Rul e wil l continu e thes e actions , eve n withou t

th e Rule , an dthus , wil l no t incu r additiona l cost s t o compl y with thes e components . Thei r

passenger s wil l als o not

receiv e additiona l benefit s for thos e components . (Certai n carrier s ar e alread y complian t with th e mai n portion s o f Component s 1 , 4 an d5. ) An y existin g delay s beyon dth e alread y existin g trigger s ar e assume dt o b e covere dunde r th e safet y and/o r ai r traffi c contro l exceptions . • T o th e greates t

exten t possible , carrier s wil l undertak e response s t o th e Fina l Rul e tha t wil l hav e minima l impac t

o n overal l operations . Action s abov e an dbeyon dthos e require db y th e Fina l Rul e ar e no t

treate da s acos t

o f th e Rule . • Althoug h cartier s ar e generall y reluctan t t o cance l flights , the y sho w apreferenc e t o cance l upcomin g flight s rathe r

tha n divert

incomin g flight s i

f agat e i s neede dt o accommodat e deplanin g passenger s fro mafligh t se t t o excee dth e tarma c dela y tim e limit.^ ^

• It i s assume dthat

wit h increase davenue s an deas e o f acces s t o fligh t

cancellatio n informatio n (o n cartie r

website s an dvi aphone) , person s travelin g t o mee t arrivin g passenger s ("meeters-and-greeters" ) ca n lea mo f cancelle dflight s i n tim e t o adjus t plan s (sinc e acancellatio n alway s occur s befor e aflight take s off) . Ye t

the y may no t

alway s hav e

^ ' Ther e i s afair

amoun t o f uncertainty regardin g what , if any , impac t

th e variou s component s o f th e Fina l Rul e ma y hav e o n trave l demand . ' ^ Th e cos t

t o carrier s t o divert

aflight i s usuall y highe r

tha n th e cos t

t o cancel . Se e for

exampl e th e revie w an d estimate s o f

diversion s an dcancellation s at thre e airport s i n Zalama n Shavell , "Th e Effect s o f Schedul e Disruption s o n th e Economic s o f

Airlin e Operations, " Th e Mitr e Corporation , Apri l 15 , 2000 . t t RI Decisio

n Economic s Pao e • 2 4adequat e informatio n regardin g delay s tha t ar e th e resul t

o f event s late r

i n th e fligh t

i n enoug h tim e t o adjus t

thei r trave l plans . • Rea l discoun t

rate s o f 7 % an d3 % ar e applie dt o cost s an dbenefit s t o reflec t th e time-valu e o f money . Thi s i s consisten t with directio n i n OM B circular s A- 4 an dA-94 . • Th e potentia l impac t o f ongoin g o r

plaime dimprovement s t o ai r traffi c contro l (ATC) , includin g change s t o th e Airspac e Flo w Program , future implementatio n o f th e Nex t Generatio n Ai r

Transportatio n Syste m(NextGen ) o r th e Adaptiv e Compression s softwar e program , ar e no t

incorporate dint o th e baseline . Th e potentia l impac t o n delay s ma y b e significant , but

i s a s ye t unknown.^ ^ 

### 2.1. 4 Limit s t o Availabl e Informatio n Estimate s o f

cos t an dbenefit s ar e constraine db y th e limit s o f availabl e data . Tw o dat a limitation s wartan t

particular

attention . First , availabl e dat ao n tarma c delay s (require dfor cartier s with a

t leas t 1 % o f tota l domesti c scheduled-servic e passenge r revenues , th e reportin g carriers ) ar e incomplet e becaus e the y d o no t includ e tarma c delay tim e b y flight s tha t ar e ultimatel y cancelle do r

diverted.^' * A s such , dat afro mBT S o n delay s underestimate s th e numbe r o f significan t

on-boar ddelay s an dth e cost s an dbenefit s o f th e Fina l Rule . Additionally , tarma c dela y dat ai s no t

availabl e for

non-reportin g cartier s (an di s therefor e assume dt o b e a t th e sam e rat e a s th e reportin g cartiers) . Th e initia l RI A whic h accompanie dth e NPR M note danothe r importan t

dat alimitatio n - th e determinatio n o f

likel y carrie r

action s t o compl y with th e Fina l Rule' s requirement s an dth e likel y impac t

o f thes e action s o n cost s wer e estimate dwithou t inpu t fro maffecte dcartier s othe r tha n tha t availabl e i n conunent s t o th e ANPRM . Cartier s wer e eithe r unabl e t o o r

chos e no t

t o provid e informatio n i n th e tim e require dfor tha t analysis . Subsequently , cartie r trad e association s di dprovid e comment s t o th e initia l RI A accompanyin g th e NPR M viath e publi c coimnen t proces s an dthos e comment s hav e bee n considered . Dat ao n receipts , use di n th e assessmen t o f th e impac t

o f Rul e cost s o n smal l cartiers , i s no t readil y availabl e fo r

man y o f th e cartier s whic h fal l unde r th e regulator y definitio n o f asmal l business . Th e Regulatory Flexibilit y Analysi s include s receipt s for thos e cartier s for

whic h tha t dat awa s found , but

doe s not attemp t t o estimat e receipt s for

othe r smal l cartiers . 

### 2. 2 Componen t 1 : Develo p an d Implemen t a Contingenc y Pla n fo r Extende d Tarma c Delay s Th e firs t componen t

o f th e Fina l Rule , th e Developmen t an dImplementatio n o f

aContmgenc y Pla n for Extende dTarma c Delays , wil l resul t i n th e mos t

complicate darra y o f

cartie r action s an d impact s o n cost s an dpassengers . Thi s componen t applie s t o carrier s tha t

operat e servic e with an y •' ^ Th e DO T I G note s that FA A report s that

alaunc h o f

th e Airspac e Flo w Progra mat seve n Northeas t

location s wa s followe db y a9 % declin e i n delay s at majo r airport s i n th e regio n experiencin g ba dweathe r days . T o b e conservative , suc h adeclin e wa s no t incorporate dint o th e res t o f th e nation . Delay dat afro m200 7 an d200 8 use di n thi s RI A incorporate s th e impac t o n region s tha t

implemente dth e Airspac e Flo w Program . ^' * Anothe r ne w regulatio n require s reportin g cartier s t o report tarma c delay s fo

r cancelle dflights . HZR I Decisio n Economic s . Pag e • 2 5aircraf

t with 3 0 o r

mor e passenge r

seats . Th e Fina l Rul e require s cartier s t o develo p a contingenc y pla n for

lon g delay s whic h includ e atw o hou r tim e limi t

afte r whic h adequat e food , water , an dlavator y facilitie s wil l b e provided , a s wel l a s athre e hou r tim e linii t

afte r whic h passenger s wil l b e allowe dt o deplane . . Tarma c delay s lon g enoug h t o trigge r eithe r portio n o f

th e contingenc y pla n nearl y alway s occu r durin g irtegular

operation s (EROPS) . Addressin g thes e delay s successfull y depend s o n communicatio n an dcoordinatio n betwee n carriers , airports , ai r traffi c control , an dth e Transportatio n Securit y Administratio n (TSA) . Cartiers , trad e associations , an dDO T hav e al l note dth e significan t

rol e that inadequat e plarmin g an dcoordinatio n ha s playe di n recen t notabl e incident s o f

length y tarma c delays. ^ Th e requiremen t

wil l impac t

ho w cartier s an dairport s servic e aircraf t experiencin g lon g tarma c delay s an dho w thos e aircraf t ma y b e deplaned . Cartier s ar e assume dt o b e abl e t o prepar e managemen t

plan s that

ca n identif

y aircraf t with th e potentia l t o hi t

on e o f th e tim e trigger s earl y t o allo w cartie r

operation s managemen t a n opportunit y t o addres s th e situatio n wit h minima l advers e impact . Consensu s amon g carrier s i s tha t aprimary facto r

behin drecen t

episode s o f extraordinary delay s wa s at leas t partia l managemen t

failur e b y cartier s an dairport s (suc h a s not followin g an airport

weathe r pla n o r losin g situationa l awarenes s o n th e ground) . Man y cartier s hav e take n initiative s t o avoi dsimilar situations.^ ^ Thi s componen t

o f th e Fina l Rul e wil l impac t carrie r operation s for

flight s delaye do n th e groun d onl y i n tha t

i t woul drequir e a ) additiona l aircraf t servicin g (food , water , lavatories , etc. ) an db ) eithe r havin g aplan e tax i bac k t o th e gat e o r

th e deploymen t

o f stair s an dmobil e buse s t o deplan e passengers . Th e Fina l Rul e wil l not requir e additiona l deicin g o r othe r groun d operations . Fo r thos e flight s tha t

reac h th e tim e limit , carrier s wil l provid e th e amenitie s liste dabove . Th e cos t t o carrier s wil l b e th e cos t o f providin g th e amenities ; th e benefit s t o passenger s wil l b e th e valu e o f amor e comfortabl e experienc e durin g th e delay , du e t o acces s t o th e liste damenities . Severa l to p carrier s hav e alread y institute datim e afte r whic h the y wil l ensur e basi c amenitie s t o passenger s experiencin g lon g on-boar ddelays . Mos t o f thes e stipulat e th e tim e limi t t o b e tw o hour s (se e Tabl e 6) .

^ ' Se e th e "Action s Neede dt o Minimiz e Long , On-Boar dFligh t Delays, " Offic e o f

th e Inspecto r

General , U S Departmen t

o f Transportation , report

AV-2007-077 , Septembe r 25 , 2007 ; "Excessiv e Tarma c Delay Causa l Categories, " Causatio n Work Grou p Fina l Presentatio n t o th e Nationa l Tas k Forc e t o Develo p Mode l Contingenc y Plan s t o Deal wit

h Length Airlin e On-Boar dGroun dDelays , Apri l 28 , 2(K)8 ; an d"Airlin e Delay s an dConsume r Issues, " testimon y o f

Jame s C . May , Presiden t an dCE O o f

th e Ai r Transport

Associatio n o f

Americ abefore th e Subcommitte e o n Aviatio n o f th e Hous e Committe e o n Transportatio n an dInfrasfructure , Septembe r 26,2007 . ^ * Ibid . E u R I Decisio n Economic s Pag e • 2 6Tabl e 6 : Selec t Airlin e Term s an d Condition s t o Handl e Long , On-boar d Fligh t Delay s

AirTra n Alask a America n an d America n Eagl e Continenta l Delta , incl . Comair , AS A ExpressJe t ^

' Frontie r Hawaiia n JetBlu e Mes a Airline s Northwes t ^ Pinnacl e * Skywes t * Southwes t ^

' Unite d U S Airway s e«ftAM04^ t Extende d Perio d o f ,Tlnft»(liirf ) State d i n Custome r Servte e #l«n s and/o rContract s Td f Oarrla$»an(i.GuariMiteeo f

Non e 1. 5 2 2 Non e • Non e 2 Non e Non e * Tim e t o Deplan e (hrs ) State d i n

Custome rServic e Plan s and/o r Contract s o f Carriag e and/o r define d b y Interna l PolfeJeft? > • ' *. ( c

Non e 2 fo rarrival s 4 4 fo rdeparture s Non e * Non e 2 5 Non e 1 fo rarrivals , 3 fo rdeparture s * Non e 2 2

1. 5 fo rarrivals , 4 fo rdeparture s

Non e " Unabl e t o determin e I f ExpressJe t ha s contingenc y plans ; i t I s assume d no t t o hav e suc h plans . ^ Northwes t does no t hav e a separat e contingenc y pla n fo rprovidin g acces s t o food , water , clea n lavatorie s an d acces s t o medica l assistance . Northwes t doe s commi t t o limitin g tarma c delay s t o on e hou rfo rarrivals , thre e hour s fo rarrivals . ^ Pinnacl e I s a feede rairlin e (operatin g Northwes t Alrlin k fo rNorthwes t Airlines an d Delt a Connectio n fo rDelt a Ai rLines) . * * Skywes t I s a feede rairlin e (operatin g unde rcontrac t a s Unite d Expres s o n behal f o f Unite d Airlines , a s Delt a Connectio n o n behal f o f Delt a Ai rLines , an d a s Midwes t Connec t o n behal f o f Midwes t Airlines ) ^ Southwes t does no t hav e separat e contingenc y plan s fo rproviding acces s t o food , water , clea n lavatorie s an d medica l assistance , bu t does commi t t o deplanin g passenger s afte rtw o hour s o f tanna c delay . Source : "Action s Neede d t o Minimiz e Lon g On-Boar d Fligh t Delays, " Repor t o f th e Inspecto rGeneral , Septembe r25 , 2007 , Exhibi t B , P g 29 , an d carrie rcontract s o f carriage a s presente d o n carrie rwebsites , l^a y 2008 . Th e requiremen t

tha t passenger s o n aplan e waitin g o n th e tarma c b e allowe dt o deplan e after a thre e hou r

perio dcoul dlea dt o on e o f man y differen t

scenarios . • Carrier s coul dtax i t o afre e gat e an ddeplan e passenger s unti l reboardin g t o mee t ane w wheels-of f time . • Carrier s coul dtax i bac k t o afre e gat e an ddeplan e passengers , the n cance l th e fligh t an d pu t passenger s o n anothe r

flight . o Som e of

thes e passenger s woul dwai t i n th e airport . o Som e o f

thes e passenger s woul dleav e th e airport an dretu mlater . • Carrier s coul dus e mobil e gate s an dbuse s t o deplan e passenger s an dtransport the mt o a gat e unti l reboarding .

H I R Decisio n Economic s Pag e • 2 7• Cartier s ca n us e mobil e gate s an dbuse s t o deplan e an dtransport passenger s t o gates , but late r cance l th e flight . o Som e o f

thes e passenger s woul dwai t i n th e airport . o Som e o f

thes e passenger s woul dleav e th e airport an dthe n retum . Thi s RI A doe s incorporat e th e possibilit y tha t som e flight s may b e cancelle dtha t woul dno t otherwis e hav e bee n cancelle di n orde r t o fre e u p neede dgates , with resultin g cost s t o passenger s an dcartiers . I n commentin g o n variou s proposal s t o improv e passenge r protection s (includin g thi s Fina l Rul e an dothe r proposals) , som e carrier s expresse dconce mtha t requirin g deplanin g afte r aspecifi c se t

tim e o n th e tarma c coul dincreas e cancellations . Whil e ther e i s som e researc h int o th e factor s behin dfligh t cancellations , includin g th e relativ e impac t of acarrie r hu b a s destination , weather , tim e of da y an deve n da y o f

th e week , littl e dat aexist s t o estimat e th e incrementa l impac t

o n fligh t cancellation s o f

fligh t delay s base do n carrie r

actions/decision s with respec t t o a n outside requiremen t

suc h a s th e Fina l Rule.'^ ^ On e evaluatio n o f

cancellation s estimate ddela y an dcancellatio n rate s a t severa l airport s i n 200 1 an d200 2 relate dt o securit y closure s an dnote da

n increase dlikelihoo do f cancellatio n for

thos e flight s schedule dat th e begirmin g o f

an airport

shutdown , an danothe r

stud y o n airport

closure s for

security reason s note da n additiona l 5 % o f

flight s wer e cancelle dwhe n th e closur e tim e wa s extende db y on e hour.^^ Not e that man y flight s curtentl y retu mt o th e gat e afte r extende dtarma c delay s an dar e cancelled , bu t

thes e cancellation s ar e not th e resul t o f th e Rul e - rathe r

the y ar e th e resul t

o f othe r condition s (weather , delaye dcrew , etc ) an da s suc h ar e no t a n incrementa l cos t

o f th e Rule . Th e regulatory impac t

analysi s i s intende dt o includ e onl y th e increas e i n cancellation s tha t woul d occu r (t o alread y delaye dflights ) du e t o th e implementatio n o f th e mle . Therefore , a conservativ e estimat e i s mad e tha t 0 % t o 5 % o f

flight s with on-tarma c departur e delay s o f greate r tha n thre e hour s tha t

woul dnot

hav e otherwis e bee n cancelle dwil l no w b e cancelled . I n 95 % o f thes e cases , passenger s wil l remai n at th e airport

for adelay o f

51 9 t o 54 9 minutes.^ ^ A sensitivity analysi s o n th e rat e o f additiona l fligh t

cancellations , doublin g th e cancellatio n rate , i s als o conducte dan dpresente dalon g with fina l results . It i s possibl e tha t

enforcemen t

o f thi s componen t

o f th e Fina l Rul e may lea dt o additiona l improvement s t o cartier operation s tha t

woul dno t

hav e otherwis e occurted . Fo r instance , awarenes s o f

th e additiona l cos t

t o deplan e flight s with lon g on-boar ddelay s ma y b e enoug h t o foste r bette r fligh t managemen t

an dimprove dgroun doperations . Th e ne t resul t wil l b e increase d benefit s t o passenger s fro madecreas e i n delay tim e and/o r reductio n i n cancellations . Carrier s

" Se e Nichola s Rup p an dGeorg e Homes , "A n Investigatio n int o th e Determinant s o f Fligh t Cancellations, " Economica , Th e Londo n Schoo l o f Economic s an dPolitica l Science , (2006 ) an dNichola s Rupp , "Figh t Delay s an d Cancellations, " Departmen t o f Economics , Eas t

Carolin aUniversity, February 200 5 for mor e detail . ^ * Nichola s Rupp , Georg e Holme s an dJef f DeSimone , "Airlin e Schedul e Recovery Afte r Airport Closures : Empirica l Evidenc e sinc e Septembe r 11*, " Organizao9oe s e mcontexto , Decembe r 2007 . ^ ^ Averag e delay experience db y passenger s o n cancelle dflight s i n 200 4 an d200 5 respectively . Dany i Wan g an d Lanc e Sherry , "Tren dAnalysi s o f Airlin e Passenge r

Tri p Delays, " prepare dfo r th e Transportatio n Researc h Boar d 200 7 Annua l Meeting . Increas e i n cancellation s derive dfro mestimat e o f increas e i n cancellation s afte r airport closin g lastin g an additiona l hour , a s i n Rupp , Holme s an dDeSimone, "Airlin e Schedul e Recovery Afte r Airport Closures : Empirica l Evidenc e sinc e Septembe r 11"*" . H K I Decision Economic

s Pag e • 2 8may benefi t fro mimprove dflight

managemen t

an dreduce ddela y cost s (suc h a s cre w costs) . Altemately , carrier s may shuffl e delaye dflight s o n th e groun dt o avoi dhittin g eithe r tim e trigger . Thus , overal l dela y tim e may decreas e for som e passenger s whil e increasin g for others . Whil e thes e additiona l benefit s ar e possible , the y ar e no t certain . Th e RI A take s th e conservativ e approac h tha t carrier s ar e implementin g all cost-effectiv e improvement s i n fligh t

managemen t

an dtha t cartier respons e t o th e Fina l Rul e woul dno t improv e fligh t

schedulin g o r

decreas e fligh t

delays . Th e tabl e belo w summarize s th e componen t requirement s an dthei r

likel y cost s (t o cartier s an dpassengers ) an dbenefit s (t o passenger s an d "meeters/greeters") . Tabl e 7 : Summar

y o f Componen t 1 Requirements , Costs , an d Benefit s J " " •••iiij"-i"i"ii«i-"i«.-j^w« i ,.B.Mi.»jMiii«ii«iii|i. • y;«w_Tprarp?gr-grTW'.iiiM|i j • • " '•*..~-" - ;'":•'-'~''"'' . "tflvelopmentandImpiementatioKPIilfliiSgenc y y y ; cort^^iie m #^!uii«m^ f s 1 . Carrie rmus t develo p a pla n whic h includes : • Assuranc e o f adequat e food , water , lavatory facilities , an d medica l attentio n afte rtw o hour s • Assuranc e tha t passenger s allowe d t o deplan e afte rthre e hour s • Assuranc e tha t th e pla n i s coordinate d wit h airport s 2 . Pla n poste d o n websit e 3 . Retentio n b y carrie rfo r 2 year s o f certai n dat a o n delay s tha t trigge r pla n Include : • lengt h o f dela y • caus e o f dela y • step s take n t o alleviat e discomfor t C O ^ 1*:-'*' " Carriers : • Fue l fo rairplan e taxi-bac k • Us e an d purchas e and/o r maintenanc e o f mobil e stair s an d buse s • Additiona l deplanin g fee s • Cos t o f foo d an d wate r(pai d t o

4 0 caterer ) • Websit e cost s t o pos t pla n • Minima l dat a collectio n an d storag e cost s • Increase d cancellation s Passengers : • Increase d rat e o f cancellatio n • Discomfort associate d wit h additiona l deplanin g Pla n Benefit s Passengers : • Decrease d tim e o n tarma c • Greate rcomfor t durin g tarma c delay s durin g portio n o f dela y whe n hav e acces s t o adequat e food , water , an d lavatory facilitie s an d medica l assistanc e • Comfor t fro m knowledg e tha t pla n exist s an d amenitie s an d deplanin g ar e ensure d shoul d fligh t b e delaye d Meeters/greeters : • Decrease d waitin g tim e fo r delaye d arrival s

Benefit s Tota l benefit s ar e th e su mo f improvement s i n comfort , measure da s apremiu mo n th e valu e o f time , for al l passenger s tha t

experienc e great

comfor t o r certainty . Th e tabl e belo w present s a matri x o f overal l categorie s o f

passenge r

tim e tha t

coul db e affecte db y implementatio n o f al l portion s o f

Componen t

1 of th e Fina l Rul e (discusse di n detai l below) . Th e matri x include s impact s o n th e quantity o f tim e a s wel l a s th e conditio n o f th e experience , rangin g fro m increase dcomfor

t (foo dan dwate r

provide ddurin g extende dtarma c delays ) t o increase d certaint y o f

on-tim e artiva l (base do n adjustment s i n schedule s o f chronicall y delaye dflights) .

' ^ Whil e n o dat awa s foun dfo r th e incrementa l cost s o f

additiona l lavator

y cleanings , i t

wa s assume dthat

th e incrementa l cost s woul db e negligible . iiO R I Decisio n Economic s Pag e • 2 9Tabl e 8 : Summar y o f Segment s o f Tri p Tha t Coul d Experienc e Chang e i n Qualit y o rQuantit y o f Tim e Segment s o f Ttl p Ttia t Coul d experienc e Change.|; i Ouallt y o rQuantit y o f Tim e Du e t o Componen t 1 (Al l Portions ) - Coniinganc y Pla n tarLon g Tarma c Dela y Ssasneiitpftrlp . I n transi t t o airpor t waiting/queuin g a t counter/securit y passin g throug h securit y walkin g I n airpor t waitin g a t gat e are a waiting/queuin g t o boar d transferrin g from/t o plan e i n mod e (o n th e plane )

stil l I n mod e (o n th e plane ) movin g I n transi t fro m airpor t Conditio n O f Experienc e Tha t Coul d Chang s ppmtort :

«

X 

## ""g ^

1 Sar m

h-:y^^^' - X

X Uncmtai n Doe s Rul e Impac t Qualit y o f Experienc e o rQuantit y o f Tim s «Wft//jqoa/ffyp r tim e n o n o n o n o n o n o n o X YE S X YE S

n o chana e I n auar^tlt v

suias : YE S YE S YE S YE S YE S YE S YE S YE S n o n o Comfortable/Uncomfortabl e condition s include : No t worryin g (o rworrying ) abou t bein g lat e a s ar e arrivin g a t th e airpor t an d thu s missin g a busines s appointment , connection , etc ; acces s (o rnot ) t o food , water , adequat e lavatories ; th e availabilit y o f alternat e diversion/entertainmen t (Includin g shopping , watchin g videos) . Certain/Uncertai n cover s th e passenger' s internalizatio n o f carrie rreliabilit y an d on-tim e arrival . ' Th e chang e i n th e quantit y o f tim e occur s fro m a sligh t increas e i n cancelle d flights . 

### I n addition , asmall portio n o f person s waiting a

t th e airpor t t o gree t apassenge

r ("meeters-and greeters" ) will experienc e decreasedwaiting tim e basedon artivin g flights tha t wouldhav e previousl y bee n o n the tarma

c fo r mor e tha n thre e hour s bu

t ar e now require dt

o deplane . Cost s Cost s to cartier s include th e additiona l cos t o f providing foo

dan dwater , servicing lavatories , fo r buse s an dmobil e stair s to deplane passengers , an dadditiona

l fue l t o tax i bac k t o the gate . Fuel cost s ar e th e mos t significan t fro mthi s list . Cos t

assumption s ar

e in lin e wit

h adetaile destimat

e o f per-minut

e cost s b y trip segmen

t an dcos t components conductedwit h surve y datafro m Europea n airlines . High , medium , an dlo w maintenance ; fuel ; fligh

t crew ; aircraf

t depreciatio n costs ; an dairpor t charges , amon

g other s factors , wer

e examinedfo

r tim e awa y fro mth e gat e fo r activ e taxi-out , stationar

y groundan

dtake-of f rol l (as wel

l a s othe r segments in fligh

t an do n artival) . Incrementa

l cos t difference s betwee

n taxi-out an dstationar y groundwer

e foun donl y fo r

I x RI Decisio n Economic s Pag e • 3 0fue l (significan t levels ) with minima l difference s for maintenance."^ ' Th e RI A framewor k an d cost s mirtor s thos e use di n thi s study . 

### 2.2. 1 Componen t Assumption s Severa l assumption s ar e mad e specifi c t o th e requirement s o f thi s component :

• N o increas e i n medica l personne l o r equipmen t

wil l b e needed . • Cartier s tha t

d o no t alread y hav e acontingenc y pla n ar e assume dt o not provid e food , water , an dlavatory facilitie s afte r tw o hour s o f

tarma c dela y an dt o no t deplan e passenger s afte

r thre e hour s o n th e tarmac . • Al l delay informatio n neede dt o compl y with th e Rul e i s alread y require dt o b e reporte d t o BTS . 

### 2.2. 2 Scenario s fo rLon g Tarma c Delay s Thi s sectio n detail s th e specifi c scenario s modele dfor eac h portio n o f

th e Fina l Rul e relatin g t o contingenc y plan s for

lon g on-groun ddelays . A . Adoptio n o f

acontingenc y pla n Th e Fina l Rul e require s adoptio n an dpublicatio n o n th e cartie r websit e o f

acontingenc y pla n t o addres s lon g on-tarma c delays . Cost s includ e staf f an dmanagemen t

costs , mostl y one-time , t o develop , post , an dmonito r th e pla n an dt o collec t

dat ao n action s triggere db y th e plan . Benefit s ma y accm e t o al l passenger s experiencin g atarma c delay o f a t leas t an hou r simpl y fro m knowin g tha t

acontingenc y pla n exists . Fo r instance , a s apassenge r

wait s for 1. 5 hour s o n th e tarmac , he/sh e know s tha t food , wate r

an dlavatory facilitie s ar e guarantee dif th e dela y continues . A valu e ca n b e place do n th e knowledg e tha t futur e discomfort

wil l b e avoided . Impac t o n passengers :

• Chang e i n quality o f experienc e - increase dcertaint y o f acces s t o adequat e food , water , an dlavatory facilitie s an ddeplanin g afte r tim e limit s poste di n th e pla n ar e reached . Possibl e impact s o n tim e component s include : o Sligh t increas e i n certaint y durin g tim e spen t waitin g i n mod e (i n th e airplan e waitin g o n th e tarmac ) leadin g u p t o th e pla n trigger s (tim e limits ) fo r passenge r amenities . o Sligh t increas e i n certaint y durin g tim e spen t waitin g i n mod e leadin g t o th e pla n trigger s (tim e limits ) t o deplane . • Applie s t o al l passenger s o n flight s experiencin g adela y o f a t leas t on e hour . •* ' "Evaluatin g th e Tru e Cos t t o Airlines o

f On e Minut e o f Airborn e o r Groun d Delay, " Transpor

t Studie s Group , Universit y o f Westminster

, London , Februar y 17,2004 . H I R I Decisio n Economic s . Pag e • 3 1Th e tabl e belo w present s amatri x o f tri p segment s affecte db y knowledg e o f th e existenc e o f

a contingenc y plan . Tabl e 9 : Segment s o f Tri p Tha t Coul d Experienc e Cliang e o f Contingenc y Pla n i n Qualit y o i Quantit y o f Time : Adoptio n Segment s o f TVI p tha t Coul d Experienc e Chang e I n Qualit y o rQuantit y o f Tim e

Portio n o f Componen t 1 Adoptio n o f Contingenc y Pla n

ComDonantoftrl D i n transi t t o airpor t waiting/queuin g a t counter/securit y passin g throug h securit y walkin g I n airpor t waitin g a t gat e are a waiting/queuin g t o boar d transferrin g from/t o plan e i n mod e (o n th e plane ) stil l 1 - 2 hour s i n mod e (o n th e plane ) movin g I n transi t fro m airpor t Conditio n O f Experienc e Tha t Coul d Chang e Cpijifprt^lff 9

X Uncom/ ^

X X V;tfi«daA i



### X i j Doe s Adoptio n o f Contingenc y

Pla n Impac t Qualit y o f Experienc e o rQuantit y o f Tim e tthffttnqvmi C o f tim e n o n o n o n o n o n o n o 

# MB H n o n o chang e I n

gyantltyo f tim e n o n o n o n o n o n o n o n o n o n o Th e valu e o f

th e benefi t

of knowin g tha t

apla n exist s whic h ensure s food , wate r an dclea n lavatorie s afte

r tw o hour s o f

on-tarma c delay an dtha t deplanin g wil l b e allowe dafter thre e hour s i s calculate dusin g apremiu mo f .0 1 time s th e DOT-specifie dvalu e o f tim e for ai r traveler s (whic h i s abou t

3 % o f th e premiu muse dt o estimat e th e valu e o f th e greate r

comfor t fro macces s t o food , wate r

an dclea n lavatory facilities).'* ^ Thi s benefi t applie s onl y t o passenger s waitin g o n th e tarma c for

mor e than on e hour , an di s applie dt o th e tim e spen t o n th e tarma c betwee n on e hou r an dthre e hours , a

t whic h tim e passenger s wil l b e allowe dt o deplane."* ^ Fo r passenger s waitin g o n th e tarma c after tw o hour s an dwh o hav e no t deplane d(se e belo w for greate r detai l regardin g deplaning) , th e premiu m(.34 ) for adequat e food , wate r

an dlavatory facilitie s i s als o applied . Passenge r

wai t time s ar e calculate di n 1 5 t o 3 0 minut e increments . Fo r example , fo r thos e passenger s wh o woul dotherwis e b e expecte dt o experienc e atanna c delay o f thre e hours . N o dat awa s foun dt o estimat e th e valu e o f decrease danxiety durin g extende dwai t periods . A recen t

revie w o f literatur e o n th e valu e o f

trave l tim e foun dchange s base do n variou s leve l o f comfor t a s lo w a s 8% , o r

.8 , (Chapte r 5 , Transportatio n Cos t

an dBenefi t

Analysi s - Trave l Tim

e Costs , Victori aTranspor t Polic y Institute , revise dAugus t 10 , 2007) . Base do n this , apremiu mo f .0 1 wa s chosen . ^ ^ A sensitivity analysi s include di n Sectio n 4. 3 present s tota l benefit s wit h thi s premiu mestimate dfor th e entir e tim e passenger s woul dhav e otherwis e bee n delaye do n th e tarmac . H I RI Decisio n Economic s Pag e • 3 2th e tim e spen t waitin g betwee n th e firs t an dsecon dhour s woul dhav e a.0 1 premiu mapplie d(.0 1 X valu e o f

tim e o f $28.6 0 x numbe r

o f passengers) . B . Implementatio n o f

atarma c delay tim e limi t afte r whic h adequat e food , water , an dlavator y facilitie s an dmedica l attentio n ar e ensure d Th e Fina l Rul e require s tha t cartier s provid e adequat e food , water , clea n lavatory facilities , an d acces s t o medica l attentio n t o passenger s wiaiting o n atarma c for mor e tha n tw o hours , an dtha t afte r thre e hour s passenger s ar e allowe dt o deplane . Quantifie dcost s t o carrier s o f thi s provisio n includ e th e cos t

o f providin g foo dan dwater . Cartie r policie s includ e servicin g toilet s i n lavatorie s a s needed , additiona l cost s fo r thi s tas k ar e assume dt o b e minimal . Impac t o n passengers :

• Decreas e i n tim e spen t waitin g o n tarma c above tim e specifie dfor provisio n o f amenitie s (tw o hours) . • Change s quality o f

tim e experience , but

no t quantity.'*' *

• Applie s t o al l passenger s o n flight s experiencin g atarma c delay o f greate r tha n tw o hour s wh o hav e no t

deplaned .

'^ I t i s assume dtha t carrier s ca n delive r amenitie s withou t increasin g th e fligh t dela y becaus e ther e is significan

t incentiv e t o d o so . H X l I Decisio n Economic s Pag e • 3 3Tabl e 10 : Segment s o f Tri p Tlia t Coul d Experienc e Chang e i n Qualit y o rQuantit y o f Time :

Provisio n o f Adequat e Food , Water , an d Lavator y Facilitie s an d t o Medica l Attention .

Segment s o f Tri p tha t coul d Experienc e Chang e i n Qualit y o rQuantit y o f Tim e Portio n o f Componen t 1 Provisio n o f Adequat e Food , Water , an d Ljivator y Facilitie s an d Acces s t o ll/ledlea l Attentio n

Conditio n O

f Experienc e That Coul d Chang e Doe s Provisio n o f Basi c Amenitie s Impact Qualit y o f Experienc e o rQuantit y o f

Tim e Componen t o f tri p Comfort * abl e Uncomfort abl e 

### cssai a Uncertai n sliifti n qualit y 9 f 

## ma chang e i n

qfffifititYo f tim e I n transi t t o airpor t n o n o waiting/queuin g a t counter/securit y n o n o passin g throug h securit y n o n o walkin g I n airpor t n o n o waitin g a t gat e are a n o n o waiting/queuin g t o boar d n o n o transferrin g from/t o plan e n o I n mod e (o n th e plane )

stil l i m YE S i n mod e (o n th e plane ) movin g n o n o n o I n transi t fro m airpor t n o n o Th e valu e o f

th e benefi t

i s calculate da s th e su mo f th e hour s spen t

b y al l passenger s waitin g o n th e tarma c for

mor e tha n tw o hour s x apremiu mfor greate r comfort , assume dt o b e .3 4 x th e DOT-specifie dvalu e o f

tim e for ai r traveler s (se e previou s sectio n regardin g th e valu e o f time).'* ^ Thi s premiu mrepresent s th e differenc e i n th e valu e o f tim e betwee n an averag e o f LO S ratin g A C t o LO S ratin g D , th e nex t leve l o f chang e i n comfor

t an dqualit y fro mapplicabl e researc h (se e Sectio n 2.1.1) . C . Implementatio n o f

atarma c dela y tim e limi t afte r whic h passenger s wil l b e allowe dt o deplan e Th e Fina l Rul e wil l requir e allowin g passenge r deplanin g after

thre e hour s on-tarmac . Th e cost s t o cartier s includ e th e cos t o f fuel t o tax i bac k

t o th e gat e capita l o r

renta l cost s for

buse s an d mobil e stairs , an dapplicabl e fees . Th e cost s t o carrier s depen do n ho w passenger s ar e deplaned . Th e benefit s t o passenger s primaril y deriv e fro mth e greate r comfor t o f waitin g i n th e termina l instea do f o n th e plan e o n th e tarmac . Som e passenger s wil l stil l experienc e a n increase ddela y 4 5 Alternativ e 1 assume s that DO T set s atim e limi t

o f four hour s for tarma c delay s before passenger s mus t b e allowe dt o deplane , s o thi s calculatio n use s th e tim e spen t b y delaye dpassenger s waitin g o n th e tarma c for mor e than tw o bu t

les s than four

hours . HZR I Decision Economic

s Pag e • 3 4

### basedon fligh t cancellation s triggere db y the deplanement . Differen t scenario s o

f cartier action s upon reaching deplaning tim e limit s ar e outline dbelow : 1 . Som e plane s tax i back

t o gate : a . Cost s - primaril

y fue l b . Benefits t

o passenger s - change s portion s o f tim e spen t waiting on th e tarma

c an din the termina

l c . Benefits t

o "meeters-and-greeters " - thos e person s meeting artivin g passenger s wh

o ar e no w taxie dto th e gat

e soone r will experienc e adecreas e i n overall tim

e waiting . Tabl e 11 : Segment s o f Tri p Tlia t Coul d Experienc e Chang e I n Qualit y o rQuantit y o f Time : Opportunit y t o Deplan e a t Gat e Segment s o f Tri p tha t coul d Experienc e Chang e I n Qualit y o rQuantit y o f Tim e Portio n o f Componen t 1 Du e t o Opportunit y t o Deplan e a t Gat e Afte rSpecifie d Tim e

fififflBPPfinltflftrlP I n transi t t o airpor t waiting/queuin g a t counter/securit y passin g throug h securit y walkin g I n airpor t waitin g a t gat e are a waiting/queuin g t o boar d transferrin g from/t o plan e i n mod e (o n th e plane )

stil l I n mod e (o n th e plane ) movin g I n transi t fro m airpor t Conditio n O f Experfene e IHa t Coul d Chang e £S>nift?rftfW

^ mffgisla t

abl e uaf<mt o Doe s th e Du e t o Opportunit y t o Deplan e a t Gat e Impac t Qualit y o f Experienc e o rQuantit y o f Tim e

o f tim e n o n o n o n o n o n o n o n o n o n o iSlfnasJ a

tim e n o n o n o n o Ye s n o YE S YE S n o n o

HD R I Decisio n Economic s Pag e • 3 52 . Som e passenger s deplane dwith mobil e stair s an dbuses : a . Cost s - primaril y leas e o r renta l fe e for

stair s an dmobil e buse s b . Benefit s t o passenger s ~ change s portio n o f tim e spen t

waitin g o n th e tarma c an di n th e termina l c . Benefit s t o "meeters-and-greeters " - thos e persons meetin g artivin g passenger s wh o ar e no w taxie dt o th e gat e soone r wil l experienc e adecreas e i n overal l tim e waiting . Th e valu e o f

th e benefi t

i s calculate da s th e amoun t o f tim e greate r

tha n thre e hour s tha t

woul d hav e bee n spen t

o n th e tarma c b y passenger s x apremiu mfor greate r comfor t (base do n tim e i n th e termina l rathe r

tha n o n th e tannac) , assume dt o b e .6 8 x th e DOT-specifie dvalu e o f tim e fo r ai r traveler s (reflectin g adifferenc e i n th e valu e o f tim e fro mLO S fro mth e averag e LO S ratin g A- C an dLO S ratin g E-se e Sectio n 2.1.1).'* ^ I n addition , som e flight s (whethe r deplane dat

th e gat e o r

vi astairs ) wil l b e cancelle dt o accommodat e passenger s deplanin g afte r waitin g o n tarma c beyon dspecifie dtim e limits . Cost s t o cartier s reflec t

averag e estimate s o f

cancellation s (for

detail s se e begirmin g o f

Sectio n 2. 2 an d Appendi x A) . Som e passenger s woul dexperienc e a"disbenefit " o r negativ e impac t

becaus e th e cancellatio n wil l increas e overal l trave l time . Th e increas e i n trave l tim e i s value dusin g DO T estimate s fo r ai r travelers . Th e impac t

o f additiona l cancellation s o n passenger s varies . Fo r passenger s wh o boarde dafligh t befor e i t i s cancelled , th e majority wil l wai t longe r for anothe r flight th e sam e day whil e other s wil l retu mt o th e airport

th e followin g day . • Passenger s wh o remai n at th e airport

wil l increas e tim e spent :
• waitin g at

airport , • waitin g i n lines , • walkin g i n airport

(t o ge t t o ne w gate) , an d

• boarding .

"* * Alternativ e 1 assume s that DO T set s atim e limi t

o f fou r hour s for tarma c delays befor e passenger s mus t b e allowe dt o deplane , s o thi s calculatio n use s th e amoun t o f tim e beyon dfour

hour s tha t

woul dhav e bee n spen t

o n th e tarmac . Y L RI Decisio n Economic s ' Pag e • 3 6• Passenger s wh o leav e an dretu mwil l experienc e increase s in : waitin g tim e a

t airport , waitin g i n lines , walkin g i n airport

(t o ge t t o ne w gate) , boarding , trave l fro man dt o airport , an d transitin g airport

security . Tabl e 12 : Segment s o f Tri p Tha t Coul d Experienc e Chang e i n Qualit y o r( Cancelle d Flight s (afte rpassenger s boarded ) Quantit y o f Time : Segment * o f Tri p tha t coul d Experienc e Chang e I n Qualit y o rQuantit y o f Tim e Portio n o f Componen t 1 Cancelle d Flight a (afte rpaasenger a boarded )

gQnip«ytffm9ftrl p i n transi t t o airpor t waiting/queuin g a t counter/securit y passin g throug h securit y walkin g I n airpor t waitin g a t gat e area ' waiting/queuin g t o boar d transferrin g from/t o plan e i n mod e (o n th e plane ) stil l I n mod e (o n th e plane ) movin g i n transi t fro m airpor t Conditio n O f Experienc e Tha t Coul d Chang e
Ctffnfoimit i Uneomkfft - Certai n Uncertai n Doe s Th e Increaa e I n Cancelle d Flight s Impac t Qualit y o f Experienc e o r Quantit y o f Tim e

1 n o YES n o YE S n o n o n o n o n o n o n o n o YE S

YE S YE S YE S YE S YE S n o n o Similarly , fo

r passenger s wh o d o no t

boardaflight

before i t i s cancelled , mos t

wil l remai n a

t th e airport whil e other s wil l retu mt o th e airport th e followin g day .

H I R I Decisio n Economic s Pag e • 3 7Passenger s wh o remai n at th e airport

wil l increas e tim e spent :
• waitin g a

t airport , • waitin g i n lines , an d

• walkin g i n airport

(t o ge t t o ne w gate) . Passenger s wh o leav e an dretu mt o th e airport wil l increase s tim e spent :
• waitin g a

t airport , • waitin g i n line , • walkin g i n airport

(t o ge t t o ne w gate) , • trave l tim e fro man dt o th e airport , an d

• transitin g airport

security . Tabl e 13 : Segment s o f Tri p Tha t Coul d Experienc e Chang e i n Qualit y o rQuantit y o f Time : Cancelle d Flight s (befor e passenger s boarded ) Segment s o f Tri p tha t coul d Experienc e Chang e I n Qualit y o rQuantit y o f Tim e Ponio n o f Componen t 1 Cancelle d Flight s (befor e passenger s boarded )

£amP9n9i?tfiLtt!f t I n transi t t o airpor t waiting/queuin g a t counter/securit y passin g throug h securit y walkin g I n airpor t waitin g a t gat e are a waiting/queuin g t o boar d transferrin g from/t o plan e I n mod e (o n th e plane ) stil l I n mod e (o n th e plane ) movin g I n transi t fro m airpor t Conditio n O f Experienc e Tha t Coul d Chang e Comfortabl e Uneomtan a m p^f«/ n • fJns^rl ^ Doe s Th e Increas e I n Cancelle d Flight s Impac t Qualit y o f Experienc e o r Quantit y o f Tim e 9hmi( f auaViYo t tim f ^aageJ a

qqarmLS i an a n o ' YE S

1 n o n o n o n o n o n o n o n o n o YE S

YE S YE S YE S n o n o n o n o n o

H K l Decisio

n Economic s Pag e • 3 8

### 2.2. 3 Cos t an d Benefi t Calculation s fo rComponen t 1

T o calculat e estimate dcost s an dbenefit s o f Componen t

1 (th e developmen t

an dimplementatio n o f contingenc y plan s for

lon g on-boar ddelays ) estimate s o f th e likel y numbe r

o f flights tha t woul dexcee deac h o f

th e tim e limit s (o r

triggers) , bot h for

artivin g an ddepartin g flights wer e needed . Th e distributio n o f flights b y th e length o f

tim e spen t

taxiin g ou t

an dtaxiin g i n for

200 7 an d200 8 wa s use da s th e baseline , i.e. , what woul db e expecte dt o occu r i n th e absenc e o f

th e Fina l Rule . I n recen t

years , cartier s an dairport s hav e mad e effort s t o improv e groim d coordinatio n an dbette r

manag e flight

delays , includin g on-boar ddelay s (se e Sectio n 1.1.3) . Includin g dat afro myear s befor e 200 7 woul dno t reflec t thi s curten t

situation , s o onl y dat afro m 200 7 an d200 8 wer e use dt o estimat e future taxiin g delays . 

### 2.2.3. 1 Taxiin g Dat a Dat ao n taxi-i n an dtaxi-ou t time s ar e availabl e i n th e BT S Airlin e On-Tim e Performanc e (AOTP ) Database , bu t

onl y for

cartier s with at

leas t 1 % o f domesti c passenge r

revenu e (frequentl y identifie da s "reportin g cartiers, " a s the y ar e require dt o report thes e on-tim e performanc e dat at o BTS) . Th e AOT P databas e include s dat ao n flight number , carrier , schedule darriva l an ddepartur e times , alon g wit h taxi-i n an dou t

an darriva l dela y dat afo r eac h flight. Dat aar e availabl e b y month , an dal l dat afo r 200 7 an d200 8 wer e availabl e fo r analysis . Onl y dat afor

reportin g cartier s not

alread y complian t

unde r th e Fina l Rul e wer e used . Componen t

1 o f th e Fina l Rul e als o applie s t o cartier s tha t ar e not require dt o repor t

on-tim e performanc e dat at o BTS . Taxiin g delay dat afor thes e cartier s ar e not

availabl e i n th e AOTP , but genera l flight

dat ai s availabl e i n th e Airlin e Carrie r Statistic s (T-lOO ) Database . Two step s wer e require dt o estimat e taxi-ou t an dtaxi-i n delay s for

thes e carriers . First , cartier s tha t wil l b e covere db y th e Fina l Rul e wer e identifie da s thos e tha t operat e servic e with at

leas t on e plan e tha t seat s 3 0 o r

mor e passenger s (o r

carrier s tha t

operat e servic e with a

t leas t on e plan e tha t

seat s 6 0 o r mor e unde r

on e o f th e altematives evaluate di n thi s RIA) . Th e T-lO O databas e provide s dat ao n th e numbe r o f flights an dseat s for

eac h carrie r

an dorigi n an ddestinatio n combinatio n i n th e Unite dStates . Thes e dat awer e use dt o identif y carrier s tha t woul db e covere db y th e Fina l Rul e an dcartier s that woul dqualif

y a s smal l carrier s fo r

th e Regulatory Flexibilit y Analysi s (se e Chapte r 4) . Onc e th e tota l numbe r o f flights wa s calculated , th e distributio n o f

flights b y tax i delay tim e wa s calculate dusin g th e distributio n o f flights b y tax i delay tim e amon g reportin g cartier s no t alread y complian t

wit h th e Fina l Rule.'* ^ Thus , estimate s o f

flights for

reportin g cartier s that

ar e no t complian t

with th e Fina l Rul e an dfor non-reportin g cartier s wer e summe db y taxi-ou t an dtaxi-i n dela y category t o artiv e a t an estimat e o f

th e tota l numbe r

o f flights likel y t o b e affecte db y eac h tim e trigge r (fo r basi c amenitie s an ddeplaning) . Dat ao n passenger s ar e no t availabl e i n th e AOTP , bu t ar e availabl e o n th e T-lO O database . Passenger s wer e estimate db y carrie r usin g th e T-lO O database . Tabl e 1 4 summarize s flights an d passenger s pe r

tax i delay group , for

cartier s covere db y ml e an dno t alread y compliant . ^' ' Al l non-reportin g carrier s wer e assume dt o b e non-complian t wit h th e Rule . Thi s assumptio n may overestimat e both th e cost s an dbenefit s somewhat . H I R I Decisio n Economic s Pag e • 3 9Tabl e 14 : Averag e o f 2007 an d 200 8 Flight s an d Passenger s pe r Tax i Dela

y Time Group , fo r

Carrier s Covere dB y Rul e Bu t

Not Already Complian t

fo r Contingenc y Plan s Flight s an d Passeng

j Arrival s . 0axlt«|.•--.-^. ^ U p t o 1/ 4 hour s 1/ 4 an d 1/ 2 hour s 1/ 2 an d 3/ 4 hour s 3/ 4 an d 1 hour s 1 -11 4 hour s V A -r/ z hour s 1. 5 an d 2 hour s 2 an d 2. 5 hour s 2. 5 an d 3 hours * 3 an d 3.5 * hour s 3. 5 an d 4 hour s 4 an d 4. 5 hour s 4. 5 an d 5 hour s 5 an d 6 hour s Mor e tha n 6 hour s Departure s > ^

•> . (tax i out ) , , : U p t o 1/ 4 hour s 1/ 4 an d 1/ 2 hour s 1/ 2 an d 3/ 4 hour s 3/ 4 an d 1 hour s 1 - 1 % hour s 11/ 4 -11/ 2 hour s 1. 5 an d 2 hour s 2 an d 2. 5 hour s 2. 5 an d 3 hours * 3 an d 3.5 * hour s 3. 5 an d 4 hour s 4 an d 4. 5 hour s 4. 5 an d 5 hour s 5 an d 6 hour s Mor e tha n 6 hour s H-»'f^Tt)ottic»^'ii6i'ii ^

l : 'iireeHou rTrlg^'fi^^? ' •; ' |teplanlng(Flna|Eftuft^)f/ > ri^isi^ger s 309,583,26 8 18,414,41 8 2,215,13 1 477,57 3 153,87 0 53,28 9 35,82 6 12,88 8 2,92 1 1,94 7 23 9 29 5 0 16 8 20 3 Thre e Hou rT Deplanin g ( F ^ passenger s 166,397,03 5 139,537,84 1 23,204,93 7 5,948,00 2 2,246,71 0 1,023,31 6 828,56 4 269,38 8 86,68 9 64,32 6 24,66 7 14,37 8 6,52 8 2,68 2 86 0 J ^

' -^I^Hfi^^it i .*

• 3,873,31 1 177,41 7 21,30 2 4,44 6 1,46 6 50 9 33 2 12 7 2 7 1 8 4 3 0 2 2 rigge rfo r na l Rule ) Flights 2,404,29 7 1,638,73 0 277,71 1 76,70 9 29,96 8 13,90 0 11,41 5 3,72 9 1,28 4 91 1 28 9 16 7 6 5 3 0 8 f^-tii , ' ^
* . "fiq m Hou rTrigge rfo rs^ ' - ; 0<N>|wnlng(Altematlve1 ) : ' Pmuim m 297,802,23 3 14,004,25 7 1,709,38 6 375,80 3 121,26 2 42,61 3 28,20 1 9,84 0 2,92 1 1,45 3 23 9 29 5 0 5 1 0 Fou rHou r1 Deplanin g (A l Passengers 153,946,54 6 124,543,51 3 21,276,29 6 5,616,60 7 2,137,34 8 964,30 9 755,04 5 243,87 3 81,17 4 58,91 0 22,24 9 12,83 2 6,44 8 2,06 6 53 8 Flights : 3,689,52 5 172,48 8 20,58 4 4,27 9 1,40 4 48 2 31 6 12 2 2 7 1 8 4 3 0 1 0 rigge rfo r nrnatlv e I ) Flights 1,519,61 6 1,184,47 4 199,94 3 52,83 0 20,18 3 9,16 5 7,20 2 2,31 1 77 0 57 6 18 3 10 4 4 9 1 4 5 » i ' . TWw>.Hdu rTrigge rfo rFood ,

. W^fOT f Clea n Lavatorie s an d 'A«49i^t p iUedlca l Assistanc e

, Ujjn.^::, , pmmms^ir s 299,454,21 8 14,179,72 9 1,655,77 3 355,10 2 123,03 2 47,90 7 34,39 4 12,99 1 2,65 3 2,18 5 17 2 22 2 0 16 8 20 3 Flight s 4,114,49 8 187,70 6 21,61 3 4,40 1 1,53 6 57 7 41 9 16 5 3 4 2 8 6 3 0 2 2 TW O Hou rTrigge rfo rFood , Water , Clea n Lavatorie s an d Acces s t o Medlca

t Assistanc e Passengers 164,046,69 0 121,202,56 6 20,581,19 4 5,818,36 9 2,285,22 3 1,038,27 0 832,98 5 274,28 2 93,16 3 64,42 8 23,79 1 12,42 3 6,15 2 3,77 7 1,32 2 Flight s

2,350,41 3 1,569,04 5 271,58 4 80,25 4 32,07 8 14,80 3 12,06 0 3,96 2 1,38 9 94 2 31 0 16 5 6 9 4 9 1 4 Note : Passenger s pe r

flight vary b y dela y tim e perio ddependin g o n th e actua l flight s an dcarrier s tha t reporte don-boar ddelay s i n 200 7 an d200 8 fo r eac h category . Dat afo r

non-reportin g carrier s i s no t availabl e b y on-boar ddela y time , s o th e distributio n o f delaye dflight s i s assimie dt o b e similar t o that fo r reportin g carriers . Non-reportin g smal l carrier s ha da n averag e o f 2 6 passenger s pe r

flight . Th e tabl e present s dat afo r carrier s no t

alread y complian t

with th e rule . Not e that

som e carrier s ar e complian t with th e requiremen t

t o provid e foo dan dwate r

after tw o hour s bu t

no t complian t

with th e requiremen t

that passenger s b e allowe dt o deplan e after thre e hour s ,

i x R \ Decisio n Economic

s Pag e • 4 0

### 2.2.3. 2 Cost s

Cost s t o cartier s ar e calculate db y summin g th e followin g an dar e presente di n Tabl e 1 5 below :

• Th e cos t

t o develo p acontingenc y plan . Th e numbe r o f affecte dcartier s (thos e providin g servic e with at leas t on e plan e seatin g 3 0 o r mor e passengers ) wa s multiplie db y a

n estimat e o f

th e averag e cos t

t o develo p an dpos t

th e pla n o n th e website . Thi s cos t

i s incurre ddurin g th e firs t yea r only .
• Th e cos t

t o provid e adequat e food , water , an dlavator y facilitie s an dmedica l attention . Th e numbe r

o f passenger s o n flights delaye do n tarma c b y mor e tha n tw o hour s for bot h artival s an ddeparture s tha t ar e not alread y covere db y an existin g contingenc y pla n i s multiplie db y th e per-perso n cos t t o provid e adequat e foo dan d water . ^ Thi s cos t

i s incurte devery year . • Th e cos t

t o deplan e passengers . Th e numbe r o f passenger s o n flights delaye do n tarma c mor e tha n thre e hour s fo r arrival s an ddepartiue s no t alread y covere db y an existin g contingenc y pla n i s multiplie db y th e percen t o f flights taxim g bac k

t o th e gat e (instea do f

usin g buse s an dmobil e stairs ) an dth e averag e tax i tim e an dfue l bu m pe r minut e b y plan e siz e a s distribute db y plan e siz e overal l fo r al l planes . Adde dt o thi s figure i s th e su mo f

th e numbe r

o f passenger s o n thes e flights multiplie db y th e fe e t o deplan e pe r

passenger . Similarly , cost s pe r passenge r

ar e calculate dfo r passenger s deplane do n th e tarma c an dtransferre dt o th e termina l b y bus . Thes e cost s ar e incurtedevery year . • Th e cos t

o f increase dcancellations . Th e numbe r o f flights delaye do n th e tarma c mor e than thre e hour s for departure s onl y i s multiplie db y th e percen t of additiona l cancellation s cause db y deplanin g requirement s multiplie db y th e average cos t t o carriers . Thi s cos t

i s incurre devery year . Tabl e 1 5 summarize s cost s t o carriers .

4 8 N o dat awa s foun dfo r incrementa l cost s o f additiona l lavator y cleanings , bu

t i t wa s assume dtha t suc h cost s woul db e negligible . Medica

l personne l ar e availabl e a t airport s an dth e cos t fo r acces s t o suc h personne l i s assume d t o b e negligible . H ] R I Decisio n Economic s Pag e • 4 1Tabl e 15 : Tota l Cost s t o carrier s o f Componen t 1 <^Wciifegoiy Prl6» . j^'HIittbinliftUliril l abl e Passedj^i^^^^c^ ^ wf - o f Componemi ^ Foo d & Drink s $3.7 1 493,09 4 $1,829,379 Deplanin g $1.3 7 113,44 1 $155,41 4 Reboardin g $1.3 7 110,21 9 $151,00 0 Tota l $2,135,79 3 SM'&im&i^Moa t Categor y Pric e Numbe ro f Flight s Variabl e Aircraf t Cost s o f Componen t 1 Fue l Cos t - Deplanin g $88.2 4 1,48 1 $130,68 3 Fue l Cos t - Reboardin g $88.2 4 1,44 0 $127,06 6 Cancellation s $14,818.0 0 4 1 $607.53 8 Tota l $865,24 5 Contingenc y pla n websit e implementatio n Pric e $22.50 0 Numbe ro f

Carrier s Fixe d Cost s o f Componen t 1 7 6 $1,710,00 0 Tota l $1,710,00 0 ,,-aii;:jg.M.^tHig::g,?;g; . £..,. , i!|C^|ii f Componen t 1 t o Carrier s $4,711,03 8 Note : Detail s ma

y no t su m t o total s du e t o rounding . Cost s t o passenger s o f

thi s componen t

ar e calculate da s follow s an d ar e presente di n Tabl e 1 6 below :

• Th e cos t

o f increase dcancellations . Th e numbe r o f passenger s o n flights tha t woul d hav e bee n delaye do n th e tarma c mor e tha n thre e hour s fo r departure s onl y i s multiplie db y th e proportio n o f flights tha t

ar e no w additiona l cancellation s multiplie d b y th e additiona l averag e wai t tim e pe r passenger . Thi s cos t

i s incurte devery year . Tabl e 1 6 summarize s cost s t o passengers . Tabl e 16 : Tota l Cost s t o passenger s o f Componen t 1 Cos t Category , Deplanin g Reboardin g Cancellatio n Likelihoo d o f

activit y occurrin g 100.0 % 97.2 % 2.8 % Numbe ro f

Passengers 113,44 1 110.21 9 3.17 6 Tim e spen t

pe ractivit y (hour ) 0. 1 0. 1 5. 9 Valu e o f Tim e (pe rhour ) $29.5 3 $29.5 3 $29.5 3 l-^;^^lKii^«t s o f Componen t 1 t o Passengers ll M Tota l Cost s t o Passengers (passenger a x tim e X valu e o f time )

$334,99 1 $325,47 7 $553,40 5 51,213,87 4 Note : Detail s may no t su m t o total s du e t o rounding .

I x R I Decisio n Economic s Pag e • 4 2

### 2.2.3. 3 Benefit s

Benefit s t o cartier s ar e calculate da s follows :

• BeneHt s fro mflight s arrivin g a t gat e soone r

cause db y th e disembarkin g requirement . Th e numbe r o f flights delaye do n th e tarma c b y mor e than thre e hour s fo r arrival s onl y i s multiplie db y th e tim e save db y no t bein g o n tarma c multiplie db y averag e cre w cost s (cockpi t an dattendant s pe r

plan e time s thei r

wages) . Thi s benefi t occur s every year . Benefit s t o passenger s ar e calculate da s follows :

• Comfor t

fro mknowin g ther e i s acontingenc y plan . Th e numbe r o f passenger s o n flights delaye do n th e tarma c b y mor e tha n on e hou r i s multiplie db y th e amoun t o f delay tim e fro mth e firs t

t o th e thir dhou r

(at whic h poin t

passenger s ar e allowe dt o deplane ) multiplie db y th e premiu mfor thi s knowledg e (.01) . (Se e Sectio n 2.1. 1 fo r detail s o n premimn s for

valu e o f tim e calculations) . Thi s benefi t occur s every year . • Benefi t

fro mprovisio n o f

adequat e food , water , an dlavator y facilitie s an d medica l attention . Th e nimibe r o f passenger s o n flights delaye do n th e tarma c mor e tha n tw o hour s fo r

both arrival s an ddeparture s multiplie db y th e tim e spen t with amenitie s (tim e fro mhou r tw o t o deplanin g o r

take-of f a t hou r thre e multiplie db y a premiu mfor

th e increase dcomfor

t durin g thi s portio n o f

th e tri p (.34) . (Se e Sectio n 2.1. 1 for details ; Tabl e 1 7 sununarize s th e benefit s t o passenger s fro madequat e food , wate r an dacces s t o lavatorie s an dmedica l assistance. ) • Waitin g a t

gat e instea do f

o n tarma c (deplaning) . Th e numbe r o f passenger s o n flights delaye do n th e tarma c b y mor e than thre e hour s fo r both arrival s an d departure s minu s th e numbe r o f cancelle dflights i s multiplie db y tim e spen t at th e gat e multiplie db y th e premiu mfo r greate r comfor t o n thi s portio n o f

th e tri p (.68) . Thi s benefi t

occur s every year . Tabl e 1 7 summarize s th e benefit s t o passenger s fro m deplaning .

H I RI Decisio

n Economic s PaQ 6 • 4 3Tabl e 17 : Benefit s t o Passenger s fro m

Arrival s (tax i in ) Betwee n 3 - ZV z hour s Betwee n 31/

2 - 4 hour s Betwee n 4 - AV z hour s Betwee n AY

z - 5 hour s Betwee n 5 - 6 hour s Mor e tha n 6 hour s Departure s (tax i out ) Betwee n 3 - 3V 2 hour s Betwee n SV

z - 4 hour s Betwee n 4 - 41/ 2 hour s Betwee n 41/

2 - 5 hour s Betwee n 5 - 6 hour s Mor e tha n 6 hour s Flight s *

1 8 4 3 0 2 2 Flight s *
91 1 28 9 16 7 6 5 3 0 8 Passenger s

1,94 7 23 9 29 5 0 16 8 20 3 Passenger s 64,32 6 24,66 7 14,37 8 6,52 8 2,68 2 86 0 Deplaning , Annuall y

Bas e Passenge r Valu e o f Tim e (perhr) " $29.5 3 $29.5 3 $29.5 3 $29.5 3 $29.5 3 $29.5 3 Bas e Passenge r Valu e o f Tim e (perhr) " $29.5 3 $29.5 3 $29.5 3 $29.5 3 $29.5 3 $29.5 3 Valu e o f

Tim e Premiu m 0.6 8 0.6 8 0.6 8 0.6 8 0.6 8 0.6 8 Valu e O f Tim e Premiu m 0.6 8 0.6 8 0.6 8 0.6 8 0.6 8 0.6 8 Benefi t pe r

Passenge r (pe rminute ) $0,33 5 $0,33 5 $0,33 5 $0,33 5 $0,33 5 $0,33 5 Benefi t pe r Passenge r (pa rminute ) $0,33 5 $0,33 5 $0,33 5 $0,33 5 $0,33 5 $0,33 5 Tim e t o

whic h premiu m i s applie d (hrs)* " 0.2 5 0.7 5 1.2 5 2.0 0 3.0 0 4.0 0 Tim e t o whic h premiu m i s applie d (hrs ) " * 0.2 5 0.7 5 1.2 5 2.0 0 3.0 0 4.0 0 Benefi t ($ )

$9,78 4 $3,60 3 $7,41 2 $0 - $10,13 0 $16,32 1 Benefi t (9 ) $323,23 8 $371,85 5 $361,24 7 $262,42 6 $161,72 5 $69,14 4 1 [•='':;.*'. . . , ^tf-r-^' i '^-^J'. . :••'- " 7' ' '': \ ..: \ ' f ' W & Sl,596,88 5 l 

### pTdeiyii»*^i«

^ ; • - ^<^Jis'-nU...t ; .-v^;r>^-^J^.*;. « 1 * Base d o n estimat e o f flight s (an d passengers ) no t complian t wit h a thre e hou rtrigge rfo rdeplaning . * * Thi s i s a risk-adjuste d value . Thi s figur e represent s th e media n valu e calculate d b y th e ris k analysi s progra m (usin g Mont e Cari o simulations ) whe n computin g th e outcome s o f th e mode l across th e entir e probabilit y distributio n an d Incorporate s th e effec t o f th e hig h an d lo w estimate s fo rthi s variable , a s pe rth e DO T guidelines . ** * Estimate d a s th e mid-poin t o f th e tim e block , expec t fo rthos e flight s wit h a tax i dela y o f greate rtha n 6 hour s (fo r whic h a n averag e dela y o f seve n hour s I s used) . *** * I n som e years , bu t no t all , ther e ar e som e delay s i n thes e intervals . Note : Detail s ma y no t su m t o total s du e t o rounding . 

### Benefits to "meeters-and-greeters " ar e calculate das follows :
• Th e numbe r o f flights delayedb y mor

e tha n thre e hour s fo r

arrival s i s multipliedb y the percen t o f passenger s wit

h ameeter/greete

r multipUe dby the amoun

t o f tim e savedb y taxiin g to th e termina l multiplie db y valu e o

f tim e fo r greeters . The valu e o

f

H!i R I Decisio n Economic s Pag e • 4 4

### tim e fo r meeters an

dgreeter s usedi s tha

t recommendedby DO

T fo r loca l persona l travel ($10.60) . Thi s benefi

t occur s ever

y year . 2.2. 4 Adjustment s t o Componen t 1 Covere d b y Alternative s 1 , 2 an d 3 Sinc e th e Office o

f Managemen

t an dBudge t (OMB ) state s tha

t regulator y analyse s should conside r altemative s to th e Fina

l Rul e o r regulatio n being evaluated , fiv e altemative s ar

e bein g evaluated."^ ^ Altemativ e 1 t

o th e Fina l Rule include s having the DO T determine tarma

c dela y tim e limit s o f tw o hour s fo

r adequat e food , water , an

dlavator y facilitie s an

dacces s to medica

l assistance , an

dfou r hour s allowing passenger s t o deplane . Altemativ e 1 to the Fina l Rul e i s th e optio n presente das th e proposedrul e wit h th e NPR

M in which carrier s set

th e tim e liniits , determinedlikely to converg e t o tw o hour s fo

r adequat e food , water , an

dlavator y facilitie s an

d acces s to medica

l assistance , an

dfive hour s befor

e allowing passenger s to deplane . Thi s componen

t applie s to al

l cartier s operatin g servic e wit h a t leas t on e aircraf t wit h 3 0 o r mor e seats . Altemativ e 3 t

o th e Fina l Rul e change s coveredcartier s t o thos e tha

t operat e servic e wit

h a t leas t on e aircraf t wit h mor e tha n 6 0 seats . 

### 2. 3 Componen t 2 : Provid e Informatio n fo rFilin g Complaint s an d Respon d t o Consume rProblem s Th e secon dcomponen

t o f the Fina l Rul e i s designedt

o mak e filing complaint s easie

r an dto increas e satisfaction relate dto initia l cartie r response s t

o complaints . I

t applie s to cartier s tha

t operat e servic e wit

h an y aircraf t wit h 3 0 o r mor e passenge r seats . B y requirin g cartier s to presen t complain t filing information mor

e prominently , th e Fina

l Rul e i s expectedt

o reduc e barrier s to filing acomplaint , saving tim e an dincreasing satisfaction . While par t o f the overall level o

f satisfaction hinge s on arespons e fro mth e cartier

targete dt o the natur

e o f the complaint , thi s analysi s doe s not

includ e aquantitativ e analysi s o f increasedsatisfaction basedo n lack o f information abou

t likel y cartie r responses . Thi s analysi s focuse s solel y o n quantitativ e benefit s associatedwit

h reducin g tim

e require dt

o file acomplaint , which include s tim e spen t locating th e appropriat e addres s t

o sen dth e lette r o r email bu t no t the resolutio n o

f complaints . Tabl e 1 8 summarize s th e requirement s an dlikely cost s an

dbenefits o

f Componen

t 2 .

4 9 

### Se e Sectio n 2.4. 3 fo r th e fourt h alternativ e an dSectio n 2.5.2 fo r th e fifth altemative. t T R I Decisio n Economic s Pag e • 4 5Tabl e 18 : Summar y o f Componen t 2 Requirements , Cost s an d Benefit s

,^g;<ag<fldl>iifpitliB! i Pl l 

### E^fflim^ssi ^

CosB t IIIII^Hgg^A^i^l^M^m ^ •~'X>>-f . Benefit s 1 . Designate employe e t o monito rdela y an d hav e inpu t o n decision s regardin g cancellations.' " 2 . Giv e informatio n o n ho

w t o fil e a complaint : • O n websit e • O n e-tickets • A t gat e an d counte r(upo n request) 3 . Sen d "substantive " respons e t o eac h complain t withi n 6 0 day

s (chang e fro m ANRP M requiremen t o f 3 0 days ) Carriers : • Websit e costs t o pos t informatio n o n ho

w t o fil e complaints • Develo p reformatte d e-tickets t o includ e Informatio n o n ho

w t o fil e complaints • Additiona l staffin g tim e t o targe t response s Passengers : • Valu e fro m tim e save d t o see k complain t filin g Informatio n



### To calculat

e benefits , we estimat

e time spen

t filin g complaints , tim

e save dbecaus e information i s mor e accessibl e (o

n e-tickets , websites , etc. ) an dth e valu e o

f tim e t o plac e apric e on filing a complaint . Thi s include s the pric e (valu e o f tim e spent ) incurte dto locat

e th e appropriat

e office o r agenc y to call o r sen dalette r or email to , completing alette r o r email an dsendin g th e lette r or email.^ ' I t i s assumedtha

t no tim e i s savedi

n the writing proces s o

f th e complaint . Th

e valu e o f tim e save di s calculate dusing the FA A recommendedvalue o

f tim e fo r ai r traveler s (se e Tabl e 4 i n Section 2.1.1) . Othe

r studie s hav e valuedth e "cost " o f complaining an

destimatedth e chang e in th e numbe

r o f complaint s base do n adecreas e i n price ; th e estimat e o f thi s rat e o f change , th e elasticit y o f demandfo

r filing acomplaint , i s derivedfro mthes e sources.^

^ Benefit s Th e benefits equa

l the economic valu e o

f increasedacces s t

o information o

n ho w to file a complaint . Thes e benefits-th e are aA + B i n th e grap

h below—ar

e calculate dbasedon th e followm g (Figur e 6 below) : Qo : Initia

l deman dfo r complain t filing s Qi : Ne w deman dlevel as aresult

o f Fina l Rule Co : Initia

l unit generalize dcos t

($/complaint

) C] : Ne w unit generalizedcos t

($/complaint

) followin g Fina l Rul e

^ Sinc e n o additiona l staffin g i s require dfo r thes e taslcs , incrementa l staffin g cost s ar e assume dt o b e zero . " I n th e absenc e o f

informatio n breakin g dow n complaint s t o carrie r b y metho duse dt o file, on e thir do f complaint s ar e assume dt o b e submitte donline , on e thir dvi amail , an don e thir dvi aphone . ^ ^ Davi dMorris , "Th e Cos t o f Complainin g an dth e Efficienc y o f Consume r

Complaint s Agencies, " Journa l o f Consume r

Studie s an dHom e Economics , 1980 . '
H Z R Decisio n Economic s Pag e • 4 6Figur e 6 : Chang e i n Consume rSurplu s fro m Reduce d Tim e o f Filin g Complaint s a s a Functio n o f

Uni t Generalize d Cos t Generalize d Uni t Cos t o f Filin g Complain t

D Complain t Filin g • Deman d Th e generalize duni t

cos t o f filin g complaint s (Co) , show n o n th e vertica l axi s abov e i s determine dusin g th e valu e o f tim e for apassenge r

t o prepar e an dfil e acomplain t a s wel l a s materia l costs , suc h a s stamps , envelopes , etc . Thes e cost s ar e normalize dt o th e sam e unit , dollar s pe r

complaint , an daggregate dfor atota l cos t

t o th e passenge r

pe r complaint . Then , th e chang e i n generalize duni t cos t o f complainin g base do n adecreas e i n th e amoun t o f tim e t o fin d informatio n o n filin g acomplain t i s calculated . Th e tim e save dprovide s ane w lowe r tota l cos t t o th e passenge r

(C/j . Usin g an estimat e o f th e elasticity o f

deman dwith respec t

t o cos t o f complainin g (i.e. , th e rat e b y whic h th e numbe r o f complaint s wil l increas e base do n aon e uni t decreas e i n cost ) lead s t o ane w quantity o f complaints , allow s for

a n estimat e o f

th e valu e o f tim e save dcomplaining, includin g additiona l complaint s generated . Tabl e 1 9 summarize s th e benefit s t o thi s component .

H I R I Decisio n Economic s Pag e • 4 7Tabl e 19 : Tota l Annua l Benefit s o f

@iaii»|rtaln | CtHegor^. - Fligh t Problem s Over-Sale s Res/Tktq/Boardin q Fare s Refund s Baggag e Custome rServic e Disabilit y Advertisin g Discriminatio n Animal s Othe r 

### Vm" " ,. , ""

" .;•. • . %«haag«i# . ' :lilDilt]trt^)^lltfit^ ; 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % 3.21 % Componen t

^|Maii»tty > 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 1.074 1 2 233,35 6 24,85 8 69,46 4 19,35 2 43,72 2 124,02 8 73,85 6 26,10 8 1,98 3 5.26 1 39 7 19,24 6

- Chang e i n

generaiiae d eo$ f

. ofcompUrthiti i $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 $0,22 8 ^«^^^ ;

$185,60 7 $19,77 1 $55,25 0 $15,39 2 $34,77 6 $98,65 0 $58,74 4 $20,76 6 $1,57 7 $4,18 5 $31 5 $15,30 8 $910,34 0 Note : Detail s ma

y no t su m t o total s du e t o rounding . 

### Cost s The cost s t

o carrier s fo

r thi s componen

t ar e les s comple

x tha n fo r Componen

t 1 , though no t necessarily eas y t

o estimate . Mos t

cartie r cost s will b e one-tim

e capita l cost s t o updat e website s an drevis e e-ticket s t

o includ e information o n how to file complaints . Additiona l staffin g cost s ar e assumedt

o develo p arang e o

f respons e template s t

o ensur e tha t a"substantial " respons e i s sent . I t i s assmnedtha

t cartier s will no t

needto draf

t uniqu e letter s fo

r th e substantiv e response . Cos t t o carrier s i s calculate das th e numbe r o f affecte dcartier s multiplie db

y the cos t to updat e website s an

dreforma t e-ticket s i

n th e first yea r only , plu s the numbe

r o f ne w complaint s associate dwit

h th e lowe r cos t o f complaining (afte

r th e Fina l Rul e i s implemented) multiplie db y th e additiona

l cos t t o sen damor e targetedrespons e to eac

h complaint , calculate dfo

r eac h year . Tabl e 20 summarize s th e cost s o f thi s component . Tabl e 20 : Tota l Cost s o f Componen t 2 Uni t Cos t Unit s Tota l Cd« t Complain t pla n implementatio n - reportin g carrier s $41,37 1 1 4 $579,19 4 Complain t pla n implementatio n - no n reportin g $4,26 1 4 2 $178,95 3 Respondin g t o complaint s $1.8 5 668,56 0 $1,236,83 6 mmm:fSK/Mffi i 

### 2. 4 Componen t 3 : Chronicall y Delaye d Flight s t o b e Declare d Unfai r an d Deceptiv e Practice s an d a n Unfai rl\/letho d o f Competitio n The thir dcomponen

t o f th e Fina l Rule define s chronicall

y delayedflights an

ddeclare s the

mto b e Unfai r an dDeceptiv e Practices . Thi s componen t applie s t o cartier s require dto repor

t on-tim e performanc e dat

ato DO T - specifically , thos e tha

t accoun t fo r a t leas t 1 % o f domesti c scheduled

H I R I Decision Economic

s Pag e • 4 8

### passenge

r service . The tabl e below summarize s Componen t 3 , including th e definition o f a "chronically delayedflight," an dexpectedcost s an

dbenefits . Tabl e 21 : Summar y o f Componen t 3 Requirements , Cost s an d Benefit s ii^rinKfb;^ Chronicall y delaye d flight s wil l b e thos e tha t are : • Operate d a

t leas t 1 0 time s pe rmonth , an d • Arrive d a

t leas t 3 0 minute s lat e a

t leas t 50 % o f time . I f chronicall y delaye d fo rfou ro rmor e consecutiv

e months , deeme d a n unfai ran d deceptive practice Substitut e flight s withi n 30 minute s ar e considere d t o b e th e sam e fligh t Carriers : • Cos t t o adjus t schedule s • Opportunit

y cost s fo r cre w du e t o additiona l bloc k tim e o n fligh t schedul e Benefit s

Passengers : • Valu e o

f Increase d reliabilit y t o passenger

s



### A s notedabove , cartier s ar

e assumedt

o adjust schedule s fo

r som e portio n o

f flights wit h notabl e delays . Whil e actua

l flight arriva l tim e an dtota l trip tim e d o not change , shifts i

n the scheduled artiva l tim e relat e t o consume

r understanding o

f whethe r aflight i s o n time . Thus , passenger s wh o artiv e a t atim e tha t woul db e considered"late " befor e the Fina l Rul e ma y no w arriv e on tim e according to ane

w schedule . Thos e wh

o wouldhav e been considere d"on-time " unde r th e oldschedule ar

e now early . Changing th e publishe dschedule i s th e leas t costly carrie

r response . Suc h "padding " o

f schedule s alread

y occurs . Som

e ma y argue tha

t th e schedule ma

y b e misleading as to th e idea

l trip tim e fo r tha t flight; suc

h adjuste dschedule s hav e benefit s fo r passenger s i

n tha t the y facilitat e bette r trip plaiming 5 3 

### Th e impact on passenger s includes^'^ :
• Chang e i

n qualit y o f experienc e fro

mincreasedreliabilit

y o f flight artival . During th e las t portio n o f the trip , thos e who wouldhav e been lat e befor e th e Fina l Rul e an dth e presumedresultin g chang e in th e printe dflight schedule will n o longe

r b e late ; therefore , the

y no longe r fee l th e discomfor

t fro mwort y abou t being late . Othe r passengers , wh

o wouldhav e artive djus t

on time , ar

e no w early .5 5

^ ^ Se e fo r instance , "You r

Fligh t ha s Bee n Delaye dAgain, " Join t Economi c Committee , U S Congress , May 2008 . '" * N o cos t

o r benefi t ha s bee n estimate dfo

r passenger s wh o arriv e jus t o n time , i.e. , befor e flight arriva l tim e wa s rescheduled . ^ ' Som e increase dportio n o f passenger s wil l arriv e earlie r base do n th e revise dschedul e an dma y hav e t o wai t longe r to b e met . A cas e can b e mad e tha t thes e passenger s spen dtim e the y expecte dt o b e o n th e plan e i n mor e comfortabl e circumstance s insid e th e terminal , bu t acas e can als o b e mad e tha t earl y arrivin g passengers , instea do f feelin g greate r

comfort , wil l b e annoye dat perceive d"wasted " time . Sinc e i t i s no t clear whic h woul db e th e predominan t

sensibility , thi s analysi s doe s no t attemp t t o monetiz e thi s impact . H I R[ Decisio

n Economic s Pag e • 4 9

### 2.4. 1 Arriva l Delay

Datao n flight artiva l delay s wer

e neededfo

r Components 3 an

d4 - relatin g t

o the designatio n o

f flights a s chronically delayedan

dfo r postin g dela

y dat afo r online ticket

purchases . Fligh

t dela y dat awer e calculate dfro

mthe AOTP . Sinc e onl

y "reporting cartiers " ar

e require dto compl

y wit h thes e components , ther

e was n o needt

o mak e estimate s fo

r othe r carrier s fro

mth e T-lO

O database . Th

e AOT P databas e include s scheduleddepartur e time , scheduledarriva

l time , actua

l flight time , an ddelayedarriva

l tim e fo r eac h flight b y imique cartier

cod e an dflight number , amon g othe r data . Fo r thi s Component , th e declaratio n o f chronically delayedflights, dat awer e collecte don eac

h imiqu e flight numbe r an dcartie r code . Flight s tha

t wer e lat e by eithe r th e Rule' s definition (3 0 minute s a t leas t 50 % o f th e time ) fo

r fou r consecutiv e quarter s wer

e flagged^^. Unde

r th e Rule , thes e flights wouldb e declaredchronically delayedan dthei r schedule s wouldb e deeme dunfai r an ddeceptive . Onc e thes e flights wer e identified , i

t was assumedtha

t carrier s wouldadjust

th e flight schedule b y th e minimu

mtim e necessar y s o th e flight

wouldn o longe

r mee t the criteria . 2.4. 2 Summar

y o f Cos t an d Benefi t Calculatio n fo rComponen t 3 Cost s t o cartier s ar

e calculate db y first

estimating th e portio n o

f flights tha

t wouldb e classified as chronicall

y delayedbase do n dat

afro m200 7 an d200 8 (averaged) flight

event s (see Section 3 fo r greate r detai l on estimatio n o

f flight delays) . The amoun

t o f time neededt

o b e adde dt o th e flight schedule fo

r flights i n a t leas t one o f the thre e consecutiv e quarter s to b e lat e les s tha n 50 % of f th e tim e was calculate d- in all case s schedule extension s o f 1 5 minute s o

r les s wer e required . Th e numbe r o f flights identifieda

s chronically delayedwas the n multiplie dby on

e 15-minut

e flight block an dthen b y averag e cre

w cost s fo r 1 5 minute s acros s all flights. Benefits t o passenger s wer

e calculate db y multiplying the numbe r o f affecte dpassenger s by th e reliabilit y measur e describedi

n Section 2.1.2 . Th

e standar ddeviatio n betwee

n ne w an dold arriva l time s was calculate dan

dmultiplie dby aportio n o f the valu e o

f time.^ ^ Thi s benefi

t i s calculate dever

y year . 2.4. 3 Adjustmen t t o Componen t 3 Covere d b y Alternativ e 4 Th e OM B require s tha

t regulator y analyse s conside

r altemative s to aFina

l Rule o r regulation . Fiv e altemative s t

o thi s Fina

l Rule ar e bein g evaluated.^

^ DO T als o previousl

y considere d anothe r altemativ e tha

t define dachronicall

y delayedflight

a s on e tha t arrive s a t leas t 3 0 minute s lat e a t leas t 60 % o f the time . Thi s RI

A incorporate s thes e requirement s a s Altemativ e 4 .

' * Fo r Alternativ e 4 , thos e flights delaye d3 0 minute s at leas t 60 % o f th e tim e for

thre e consecutiv e quarter s wer e flagged . ^ ^ Thi s methodolog y follow s tha t use dt o measur e th e valu e o f trave l tim e reliability a s i n Davi dBrownston e an d Kenneth Small , "Valuin g Tim e an dReliability : Assessin g th e Evidenc e fro mRoa dPricin g Demonstrations, " Transportatio n Researc h Par t A , 39 , 2005 . ' * Se e Sectio n 2.2. 2 for

Alternative s 1 , 2 an d3 an dSectio n 2.5. 2 for Altemativ e 5 . H I R I Decisio n Economic s Pag e • 5 0

### 2. 5 Componen t 4 : Carrier s t o Publis h Dela y Dat a o n Website s

The fourt h componen

t o f th e Fina l Rul e require s certain cartier s to publis h dela y dataonlin e befor e ticket s ar

e purchased . Thi s requiremen t applie s t o flights fro

mcartier s require dt

o repor t on-tim e performanc e datat

o DO T - specificall

y thos e tha

t accoun t fo r a t leas t 1 % o f domesti c scheduledpassenge

r service . Reporting carrier s woul db e require dt

o pos t dela y dat ao n thei r website s befor

e poin t o f fina l purchase . Fo r thi s component , al

l flights fro

mreportin g carrier s tha

t d o not alread y pos t dela y dat ao n thei r website s wer

e initially examined.^

^ Flight s tha

t wer e lat e mor e tha n 50 % o f th e time i n an

y singl e quarte

r wer e pulle dfo

r furthe r analysis . (I

t was assumedtha

t flights tha

t experience d delay s mor

e tha n 50 % o f th e tim e fo r onl y one o r tw o month s wer

e les s likely t

o b e di e focu s o

f managemen

t effort s t o reduc e delay s or

to wartant

a n extensio n o

f thei r poste dschedule. ) Sinc e onl y 34.5 % o f ticket s fo r reportin g cartier s ar

e purchasedon cartie

r website s (Appendix A) , i

t was assumedtha

t no mor e tha n 34.5 % o f flights tha t wer e lat e mor e tha n 50 % o f th e tim e would b e impactedby prospectiv e passenger s tha t no w ha dacces s t o historica

l dela y information . Using dat afro mthe Canadia

n hospita l stud y (showing a40 % decline i n wai t tim e wit h publishe d result s - Appendix A

) as aprox y fo r the impact

o f postin g flight

dela y times , the impactedflights wer e assume dt o hav e a40 % decreas e in averag e dela y time . Flight s wit

h the shortes t

overall delay s wer e assumedt

o change , becaus e the

y wouldb e the leas t

difficul t an dleas t expensiv e to adjust t o avoi ddelays . Table 2 2 summarize s Componen t 4 an dit s expectedcost s an

dbenefits . Tabl e 22 : Summar y o f Componen t 4 dtNHi^«n # Onlifi^tVi»>»lit^fuM ^ tl f M : " , ; ;_.jc-afl9i«jBi»^it*|iai^ ^ W Carrier s ar e require d t o publis h onlin e th e followin g specifie d dat a fo reac h liste d fligh t fro m previou s month : • % o f arrival s on-tim e • % o f arrival s mor e tha n 3 0 minute s lat e • Highlighte d i f fligh t lat e mor e tha n 50 % o f th e tim e • % o f cancellation s i f mor e tha n 5% . Tw o option s fo rdat a presentation : a ) Wit h Initia l listin g wit h price s o r b ) Al l dat a vi a hyperlin k - lin k o n pag e wit h initia l listing . Requirements , Cost s an d Benefit s l|«it i Dela y Data o n WebBlte s 1 Coat

s Carriers : • Websit e developmen t fo rdat a postin g • Managemen t o f dat a link s (minima l cost ) • Opportunit y cost s fo rcre w I f additiona l bloc k

tim e i s place d o n som e fligh t schedule s t o reduc e leve l o f dela y * Bsnallt a Passengers : • Valu e o f Increase d reliabilit y t o passenger s



### I t i s assumedtha

t as cartier s publis h dela

y data , som

e traveler s will choos e flights tha t ar e les s likely t o b e delayed . This , i

n tum , will lea

dcompeting cartier s wit

h flights o f simila r origi n an d destinatio n to adjust

flight managemen

t an dschedule s to result

i n fewe r delays . Thi s cartier adjustmen t will wor k in concer

t wit h schedul e adjustments relate dto Componen t 3 , whic h applie s t o chronically delayedflights. A n estimatedportio n o

f delayedflights tha

t d o not mee t th e precis e definition as "chronically delayed " will b e adjuste dt o decreas e the overall percentag e o f lat e artivals . I

t i s assumedtha

t thi s schedule adjustmen

t will occu r quarterly . Dataon th e numbe r o f ticket s purchasedon cartie r website s was foun

dfo r six reportin g carrier s an d estimatedfo

r th e others . Th

e result was a n aggregat e estimat e o f 34.5 % o f ticket s fo r reportin g
5 9 Continental , Unite dan dU S Airway s pos t dela y dat ao n thei r

websites . H R I Decisio n Economic s Pag e • 5 1

### cartier s tha

t d o not curtently pos t

dela y dat aon cartie r websites . Thi s account s fo

r nearly 27 % o

f all ticke t purchases.^ " Thus , i

t i s assumedtha

t 34.5 % o f passenger s on thes e cartier s review posteddela

y dataan dwil l mak

e travel decision s base dupo n tha t dataonc e th e Fina

l Rul e i s implemented . Ther e ar e no datat

o show th e impact

o f reviewing dela

y dataon airline ticket

purchas e behaviors.^ ' Dat

awas foun

dfro manothe r servic e are atha

t affect s man y consumers - fro

ma Canadia n stud y tha t evaluate s th e impact

o f pubUshe dwai t time s a t hospitals.^ ^ Whil e deman

d fo r thes e service s (airlin e ticket s an dhospita l services ) i s primarily afunction o f other , unrelate d factors - pric e an

dschedule fo

r airlines , location , reputation , an dreferta l fo r hospital s - th e suppl y fo r bot h i s limitedt

o afe w competitors . Wai

t time s fo r acces s t o ahospita

l an ddela y to reach aflight

destinatio n ca

n impact consume r choices . Th

e Canadia n stud y showe dtha t publishin g wai

t time s fo r hospita l procedure s ledto significan t reductio n i

n wai t time s i n nearly all cases . For thi s analysis , th e averag e chang e in hospita l wait time s was useda s aprox

y t o estimat

e a potentia l decreas e i

n flight delay s fo

r flights no t

alread y adjuste ddue t o designatio n as chronicall y delayed.^ ^ I t i s assumedtha

t passenger s wh

o purchas e ticket s online will chang e their purchase s whe

n wai t time s ar e mad e availabl e an

din response , carrier s will mak e change s to decreas e dela

y time s simila

r to tha t see n fo r decline s i n hospita l waits . Give

n the larg e numbe

r o f delayedflights an

dth e significan

t impact o n wait time s foun

din th e Canadia

n hospita l research , aconservativ e assumptioii i s mad e tha t onl y flights delayedmor

e tha n 50 % o f the tim e i n a quarte r will generat

e enoug h change s i

n consume r behavio r t o wartan t carrie r action . Impact o n passengers :
• Increas e i

n qualit y o f experienc e fro

mincreasedreliabilit

y o f flight artival . I n th e las t portio n o f atrip , passenger s wh

o wouldhav e been lat

e befor e th e Fina l Rul e will no t b e lat e as ofte n an dwill n o longe

r fee l th e sam e level o f discomfor t fro mwort y abou t being late . Passenger s wh

o woul dhav e artive don tim

e no w artiv e earl

y 6 4

^ Dat awa s foun dfo

r th e percentag e o f

ticket s purchase do n th e airline' s websit e for Delta , Northwest , Americ a West , Alaska , AirTran , an dJetBlu e (Da n Reed , "Airline s Try t o Mak e Interne t Work fo r Them, " US A Today , Octobe r 31 , 2005) . Weigh t

average s (usin g 200 7 passengers ) wer e use dt o calculate destimate s fo r othe r reportin g carriers . * ' Althoug h delay dat ai s publishe do n th e BT S website , n o evidenc e wa s foun dthat i t wa s accesse dregularl y b y consumer s an dthu s an incrementa l impac t fromth e postin g o f

dela y dat acoul dno t

b e estimated . * ^ Se e HDR , "Wai t

Times, " prepare dfor

Health Canad aHealth Polic y Researc h Division , Marc h 31 , 2008 , an d "Th e Wai t Tim e Strateg y Revie w o f Activities : Updat e #10, " Ontari o Ministry o f Health an dLong-Ter mCare , Decembe r 19 , 2007 . ^ ' Se e "Th e Wai t

Tim e Strateg y Revie w o f Activities : Updat e #10, " Ontari o Ministry o f Health an dLong-Ter m Care , Decembe r

19 , 2007 , fo

r details , an dAppendi x A for detail s o n HD Rcalculation s o f averag e chang e i n wai t time s applie dt o carriers . ^ * A s i n Componen t

3 , mor e passenger s wil l arriv e earl y becaus e o f revise dschedule s an dma y wai t longe r t o b e met . A cas e ca n b e mad e that thes e passenger s ar e spendin g tim e the y expecte dt o b e o n th e plan e i n mor e comfortabl e circumstances , yet th e cas e ca n als o b e mad e tha t earl y arrivin g passengers , instea do f feelin g greate r K R I Decision Economic

s Pag e • 5 2Flight s an dpassenger s o n cartier s tha t alread y pos t

som e dela y dat ao n thei r website s (se e Tabl e 2 3 below ) ar e assume dnot t o b e affecte db y thi s componen t o f th e Rule . Tabl e 23 : Reportin g Carrier s an d Postin g o f Dela y Dat a
• . .^. • ...-'.::.. : ".Z:. : ',: . k-<-,..-" - : AirTra n Alask a America n an d America n Eagl e Continenta l Delta , incl . Comair , AS

A ExpressJe

t Frontie r Hawaiia n JetBlu e Mes a Airline s Northwes t Pinnacle * Skywest* * Southwes t Unite d U S Ainway

s • - i /.'tSarrle rPofli^i«isyJ3a » WliVV^ftf e n o n o n o Ye s n o n o n o n o n o n o n o

.. .

.. . n o Ye s Ye s Pinnacl e i s a feede rairlin e (operatin g Northwes t Airlin k fo rNorthwes

t Airiine s an d Delta Connectio n fo rDelta Ai r Lines) . * * Skywes

t i s a feede rairlin e (operatin g unde rcontrac t as Unite d Express o n behal f o f Unite d Airiines , a s Delta Connectio n o n behal f o

f Delta Ai rLines , an d a s Midwes t Connec t o n behal f o

f Midwes t Airiines ) 

### 2.5. 1 Summar

y o f Cos t an d Benefi t Calculatio n fo rComponen t 4 Cost s an dbenefit s ar e base dupo n th e numbe r o f flights tha t

wil l hav e adecreas e i n averag e dela y times . Sectio n 4 describe s i n detai l th e metho duse dt o identif y likel y impacte dflights usin g dat arelate dt o th e portio n o f reportin g carrie r

ticket s purchase do n carrie r website s an dan expecte ddecreas e i n delay tim e base do n finding s fro mth e Canadia n hospita l study , whic h i s th e bes t availabl e prox y t o evaluat e th e likel y effec t o f thi s component . Cost s t o cartier s ar e calculate db y multiplyin g th e numbe r o f impacte dcartier s b y th e cos t o f updatin g websit e t o includ e delay dat a(a s aone-tim e programmin g cost) , plu s th e annua l opportunit y cost s o f

flight cre w tim e for

flights for

whic h poste dschedule s ar e extended . Fligh t cre w cost s ar e calculate db y totalin g al l change s i n affecte dflights' schedule s i n 1 5 minut e bloc k tim e increment s an dmultiplyin g b y th e averag e cre w cost s (cockpi t an dattendant s pe r

plan e x wage s an doverhead) . Th e cos t o f flight cre w increase s i s include dbecaus e flight crew s ar e pai d base do n schedule dflying tim e an dnot actua l flying tim e whe n tim e i s les s tha n expected . Improvement s i n averag e delay s ar e base do n eithe r an increas e i n poste dschedul e tim e (o f 0 % comfort , ma y fee l annoye da t th e perceive d"wasted " time . I

t is no t clea r whic h woul db e th e predominan

t sensibility , s

o this analysis doe

s no t attemp t t o monetiz e thi s impact

. I x RI Decisio n Economic s Pag e • 5 3t o 75 % o f th e flights, wit h 25 % th e mos t likely ) o r

improve dflight

schedul e management . Thi s cos t occiu' s ever y year . Tabl e 2 4 present s th e tota l cos t o f thi s component . Tabl e 24 : Tota l Cost s o f Componen t 4

• '!,';fivy.".".vnM!!M!'.!W!wsJ!!v."i". ' •--•;sv'v-'j'^wi?-i,i.',iiii , • •n:.i'!fi!)i,)' \
a-i.';::r:<J-:--ill/v? - ' ^~.-^^'^-'::- < U - -^.'hlifi^ . llumliiirofwoli * eonJ|iAtiiiit Websit e & softwar e t o publis h dat a ;s-gs^n-.:t: ' $444,00 0 1 4 Tota l Cost s $6,216,00 0 Cos t o f adjustin g schedule s J l I I I HU M I I I 1 ! • . 1 1 I f Mi y I J llll^llJlll. M ^MIUH H I $1,579,829 T-W X " "n;^;'^'"'*?''! " $1,579,82 9 T«»t#, = * Fo rthos e carrier s tha t ar e owne d b y th e sam e company , softwar e developmen t i s assume d t o b e require d jus t once , fo rth e compan y a s a whole . Benefit s t o passenger s ar e calculate di n amanne r simila r t o tha t use dfo r

Componen t

3 . Th e numbe r o f affecte dpassenger s i s multiplie db y areliabilit y premiu mo n th e valu e o f passenge r tim e an dth e standar ddeviatio n betwee n ne w an dol dartiva l times . A ramp-u p i s incorporate d int o th e mode l usin g th e assumptio n tha t no t al l onlin e ticke t

purchaser s wil l maximiz e us e o f thi s dat aimmediately . Benefit s ar e ramped-u p ove r tw o year s o f

implementation , wit h on e thir d o f benefit s realize di n th e fks t yea r an dtwo-third s i n th e secon dyear . B y th e thir dyea r afte r implementatio n o f

th e Rule , ful l benefit s wil l b e realized . Thi s benefi t i s calculate dever y year . Tabl e 2 5 present s tota l benefit s o f componen t

4 . Tabl e 25 : Tota l Benefit s o f Componen t 4 ^Oafep»te » Chang e o f 1 5 minute s 0.04123 7 Valu e o f Tim e $29.5 3 Passenger s

Affecte d 50 % Numbe r^/ ^

Pasaenge|t| : -ililTOi^ m 460,42 7 70 % Ramp-U p (1s t year ) 0.33 0 Tota l

BanafK S $66,79 5 Chang e o f 1 5 t o 3 0 minute s 0.07727 1 $29.5 3 50 % 10,001,26 3 70 % 0.33 0 $2,718,78 2



### iM^M!iS^MM i $2,785,57 7 mmifm m 

### 2.5, 2 Adjustment s t o Componen t 4 Covere d b y Alternativ e 5 OM B require s regulator y analyse s t o conside r altemative s t o aFina l Rul e o r regulation . Fiv e altemative s ar e evaluate dfo r thi s Rule.^ ^ Altemativ e 5 impact s onlin e trave l agencies , includin g traditiona l trave l agencie s tha t offe r a n onlin e bookin g engine , b y requirin g dela y dat at o b e poste dfo r

domesti c flights o f

reportin g carriers . A n estimat e o f

th e percentag e o f

al l ticket s purchase donlin e (40% ) wa s use dt o identif y flights tha t wil l b e impacted . Cost s t o trave l agencie s tha t provid e a n oiilin e bookin g engin e ar e calculate da s th e numbe r o f onlin e trave l agencie s multiplie db y a n estimate dcos t t o reprogra m softwar e an dinterfaces.^ ^ Thi s cos t i s incurte donc e an ddurin g th e firs t year . Globa l Distributio n ^ ^ Se e Sectio n 2.2. 4 fo

r Alternative s 1 , 2 an d3 an dSectio n 2.4.3fo r th e fourt h altemative . * * K . O'Toole , "I T Trend s Surve y 2003, " Airlin e Busines s Magazine , Augus t 2003 , a s reporte din Nelso n Granados , Alo k Gupt aan dRobert

J . Kauffman , "IT-Enable dTransparen t Electroni c Markets : Th e Cas e o f th e Ai r Trave l Industry, " Informatio n System s an dE-Busines s Maruigement , vol . 5 , n o 1 , January 2007 . * ^ I n th e absenc e o f

informatio n t o th e contrary , i t i s assume dtha

t onc e th e appropriat e system s ar e i n place , maintenanc e cost s wil l b e negligible . H I R I Decision Economic

s Pag e • 5 4System s (GDSs ) an dOnlin e Trave l Companie s (OTCs ) wil l als o incu r thi s cos t onc e an ddurin g th e firs t year . Tabl e 2 6 summarize s cost s t o Altemativ e 4 . Tabl e 26 : Tota l Cost s Associate d wit h Alternativ e 4

Cost s Cost s pe r category* * Numbe ro f no n

complian t businesses * Tota l Cost s Websit e & softwar e t o publis h dat a (trave l agents ) $35,00 0 2,63 7 $92,295,00 0

Maintenanc e o f GD S System s $10 0 1 4 $1,40 0 Modification s t o GD S System s $848,21 5 $6,785,72 0 Cos t o f adjustin g schedule s ^i^^*^^i^^^^<)<'W*ir*!"*T?'*^^^*!!^'?!^T?<?^*^R'f!9'T!!!!T^ ^ $1,658,05 0 n/ a $1,658,05 0

• V fe^--- --A r ^<Kfey40,17 0 *l t I s assume d tha t 17 % o f al l trave l agencie s hav e a n onlin e presence. **Presente d a s ris k

adjuste d cost , thi s figur e represen t th e risk-adjuste d valu e calculate d b y th e statistica l progra m use d whe n calculatin g th e rang e o f fina l outcome s o f th e mode l an d Incorporat e th e effec t o f th e hig h an d lo w estimates . 

### 2. 6 Componen t 5 : Carrier s t o Adop t Custome rServic e Plan s an d Self-Audi t Complianc e Th e fift h componen t

o f th e Fina l Rul e require s cartier s t o adop t acustome r

servic e pla n similar t o tha t propose db y AT A an dt o self-audi t adherenc e t o tha t

plan . Thi s requiremen t

applie s t o an y certificate do r

commute r

ai r carrie r tha t operate s domesti c schedule dpassenge r service. Carrier s tha t alread y self-audi t

complianc e (Alaska , Contineiital , Southwest , an dNorthwest ) ar e assume d t o b e unaffecte db y thi s component , 6 8 It i s assume dtha t

adoptio n o f

thi s componen t

wil l improv e th e leve l o f servic e provided . Improvement s i n servic e shoul dmirto r likel y change s i n complaint s t o airline s (collecte db y BT S i n categorie s similar t o thos e outline di n th e AT A Custome r Servic e Plan) . A revie w o f dat a fro mcarrier s tha t

alread y self-audi t

complianc e with custome r servic e plan s showe dagreate r reductio n i n th e tw o year s afte r adoptio n o f

self-auditin g than for

carrier s tha t

di dnot audi t i n th e sam e tim e frame.^^ Th e historica l differenc e i n complain t rate s betwee n carrier s tha t sel f audite d an dthos e tha t

di dno t i s use dt o estimat e th e declin e i n complaint s fo r carrier s that

wil l no w audi t compliance .

* ^ Informatio n o n carrier s whic h conduc t self-audit s provide db y th e Department . ^ ' Fo r carrier s implementin g sel f audit s o f adherenc e t o custome r

servic e plans , complaint s declin e i n th e tw o year s followin g implementatio n b y 39% . Durin g th e sam e years , carrier s tha t di dno t self-audi t sa w onl y adro p o f

19 % i n complaints . Ne w sel f

auditin g carrier s ar e expecte dt o se e a10 % declin e i n complaints , o r hal f th e differenc e i n historica l complain t

rate s betwee n previousl y self-auditin g carrier s an dothe r carriers . Se e Appendi x A fo r mor e details . HZR I Decisio n Economic s Pag e • 5 5Tabl e 27 : Summar y o f Componen t 5 Requirements , Cost s an d Benefit s

SfSIISK:' ? Carrier s t o Adop t Custome rServic e Plan s an d Self-Auc^Compiianc e f ^ Componen t requirement s Cost s Benefit s Carrier s mus t 1 . Develo p a custome rservic e pla n (t o follo w ATA's ) 2 . Self-audi t adherenc e t o pla n 3 . Mak e audi t availabl e t o DO T fo rtw o year s Carriers : Passengers : Cos t t o develo p plan , audi t adherenc e t o i t an d stor e copie s fo r2 year s • Improve d custome r servic e



### To date , no goodestimat

e ha s bee n foim do f th e valu e t

o customers o

f thi s expecteddecline i

n complaints . Thi s valu e couldb e calculatedvi aaresearch surve y to determine wha

t customer s wouldb e willin g t

o pa y t o avoi darang e o

f situation s tha

t generat e complaint s to cartiers , including thos e targete db y proposedcustome r servic e plans . Sinc e suc

h dataha s no t

bee n found , thi s analysi s currently doe s not monetiz e th e benefits fo

r thi s analysis.^ ° Th

e result i s tha t thi s RI A underestimate s th e tru e NP V o f thi s component . Cost s to carrier s ar e calculate db y multiplying the numbe

r o f carrier s tha

t d o no t self-audi t custome r servic e plan s b y th e cos t

to conduct aimua l sel f audit s an dar e presente din Tabl e 2 8 below . Tabl e 28 : Cost s o f Componen t 5 Custome rservic e pla n implementatio n Cost s pe r categor y $35,00 0 Numbe ro f non complian t businesses * 1 0 Tota l Cost s

$350,00 0 Custome rservic e pla n implementatio n - no n reportin g $3,85 0 4 2 $161,70 0 Cos t o f Self-Auditin g Custome rServic e Plan * $56,80 0 1 4 $795,20 0 Cos t o f SelMudjtin g CustiOTierSeryks e PJan - no n reportin g $6,24 8 4 2 $262,41 6

* Fo rthos e carrier s tha t are owne d b y th e sam e company , softwar e developmen t I s assume d t o b e require d jus t once , fo rth e compan y a s a whole .

^ ^ A possibl e alternat e methodolog y t o measur e th e valu e o f a . declin e i n complaint s wa s explore dbu t no t include d i n th e mai n analysis . Unde r thi s approach , th e projecte ddeclin e i n complaint s i s assume dt o equat e t o an equa l numbe r o f trip s unde r

improve dconditions . A premiu mo n th e valu e o f time , suc h a s th e 0.0 1 premiu muse dfor th e certaint y o f

knowin g tha t

acondngenc y pla n exists , woul db e applie dt o eac h complain t avoide dthroug h th e propose dregulatio n an dmultiplie db y th e valu e o f tim e fo r ai r passenger s usin g an averag e tri p length . Thi s approac h require s severa l assumption s that may b e misleading , including : that eac h avoide dcomplain t

affect s on e individua l flight

i n equa l proportio n t o al l complaints ; tha t premium s o n th e comfor

t o f trave l ar e applicabl e t o al l custome r complaints , includin g problem s wit h fares , ticketing , discriminatory events , delaye dflights , etc. ; an dtha t complaint s ar e equall y distribute dfor al l tri p lengths . A s such , thi s metho dwa s no t employe dfo

r thi s RI A an dth e benefit s o f

thi s componen t

ar e no t monetized . H I R I Decisio n Economic s Pag e • 5 6

### 3 UPDATE S T O TH E REGULATOR

Y EVALUATIO N Thi s chapte r

discusse s change s mad e t o th e Fina l RI A (a s compare dt o th e Initia l RIA ) t o reflect : publi c comment s concernin g th e methodolog y underlyin g th e Initia l RIA ; substantiv e revision s t o th e Fina l Rules ; revision s mad e t o th e RI A mode l an ddat aelements ; an dfurther researc h an d analysis . Whil e nearl y 20 0 comment s wer e receive ddiu:ing th e commen t perio do n th e Department' s Propose dRule , muc h fewer directl y addresse dassumptions , dat ao r th e methodolog y use di n th e RIA . Comment s wer e receive dfro mindividual s an dentities , industry/trad e associations , advocac y groups , loca l an dMember s o f Congress . Th e preambl e t o thi s fina l ml e provide s th e primary fom mfor substantiv e response s t o thes e comments . Thi s sectio n onl y discusse s comment s t o th e exten t the y implicat e RIA-relate destimates , assumptions , o r

methodologies . Som e commenter s argue dtha t th e RI A need s t o includ e th e cos t o f litigatio n - estimate db y on e airlin e trad e associatio n t o b e $11 0 millio n (non-discounted ) ove r te n year s for

both a ) incorporatio n th e contingenc y pla n int o th e cartiers ' contrac t o f cartiage , an db ) incorporatin g th e custome r servic e pla n int o th e carriers ' contrac t o f cartiage . Th e Departmen t believe s tha t

suc h litigation s cost s woul db e aregular functio n o f

doin g business . Nevertheless , th e Departmen t ha s decide dnot

t o requir e tha t

cartier s incorporat e thei r contingenc y plan s no r

thei r custome r servic e plan s int o thei r

contrac t o f carriag e a

t thi s time . A trad e associatio n commente dtha t th e RI A doe s not

tak e int o accoimt

th e fac t tha t it s member s alread y hav e contingenc y plans , leadin g t o th e argumen t tha t n o additiona l benefit s woul daccru e fro mComponen t

1 . Th e analysi s alread y incorporate s th e fac t tha t som e cartier s hav e publi c contingenc y plan s with tim e limit s befor e providin g food , wate r an dacces s t o clea n lavatorie s and/o r t o providin g passenger s th e opportimity t o deplane . Thus , th e RI A ha s no t change dho w i t estimate s ho w cartier s wil l b e impacted . A trad e associatio n argue dtha t th e cos t t o provid e contac t

informatio n o n a

n e-ticke t i s underestimate dan dwoul dtota l an estimate dtha t $ 5 millio n annuall y du e t o los t fro mrevenu e sellin g advertizin g spac e o n th e e-tickets . Th e Departmen t considere dthi s commen t but determine dtha t

th e contac t

informatio n ca n b e provide dwithou t los s o f advertizin g revenue . Som e commenter s argue dtha t ther e i s n o consume r

deman dfor

postin g o n tim e performance , an dtha t consumer s bas e piu-chas e decision s o n pric e only . Unde r suc h circumstances , ther e woul db e n o benefi t

t o Componen t

4 . Whil e researc h confirm s tha t pric e i s th e mos t

importan t facto r i n choosin g betwee n ticke t options , histori c timelines s i s als o afacto r for man y passengers . Thus , th e calculatio n o f benefit s i s kep t

for Componen t

4 . Severa l commenter s note dthat histori c dela y dat ai s availabl e o n th e BT S websit e for intereste d passenger s an dtherefor e Componen t 4 i s uimecessary . Althoug h thi s dat ai s availabl e o n th e BT S website , tha t

informatio n i s not

readil y availabl e t o th e consume r a t th e moment

o f purchase . Accessin g tha t

informatio n a

t tha t we b locatio n woul drequir e additiona l steps , whic h woul dtak e consumer s away fro mth e poin t o f purchase . Som e consumer s migh t los e a reservation , ge t

lots , o r b e unabl e t o acces s th e information . I n addition , th e abov e al l presume s

HJR I Decisio n Economic s Pag e • 5 7tha t

customer s ar e awar e o f

th e informatio n an dho w t o acces s it , whic h th e Departmen t believe s i s not th e case . Therefore , thi s componen t i s retaine dan dth e methodolog y i s unchanged . On e commente r

interprete dan appendi x tabl e t o mea n tha t th e benefit s t o thos e meeter s an d greeter s wh o wai t

for thei r passenger s for

shorte r period s wa s calculate dbase do n acommut e t o th e airport . Th e benefit s t o meeter s an dgreeter s i s calculate do n th e decrease damoim t o f tim e spen t waitin g o n th e airport , derive dfro mth e decrease dtarma c dela y for arrivin g flights . On e commente r

provide da

n overal l estimat e for

passenger s wh o boo k

onlin e throug h acartie r

at 30% . Sinc e thi s estimat e di dnot includ e documentatio n an ddi dnot differ significantl y fro mth e estimate s use di n th e RI A whic h wer e base dupo n publicl y reporte ddat afor multipl e cartiers , th e previou s estimat e for

passenger s purchasin g ticket s onlin e wa s kept . A cartie r trad e associatio n argue dtha t th e cos t t o cartier s t o compl y with publishin g dela y dat a o n website s (componen t 4 ) i n th e RI A wa s significantl y underestimated . Th e commente r estimate dthes e one-tim e cost s at $400,00 0 pe r

cartier . Tha t

estimat e replace s th e previou s cos t estimate . On e commente r

argue dtha t

th e RI A ough t

t o includ e th e cos t

t o passenger s wh o d o no t wan t t o rea dthroug h additiona l informatio n (o n contingenc y plans , complain t contac t information , o r dela y data ) bu t

mus t rea dthroug h additiona l informatio n an dprovide da n estimat e for

suc h costs . Ye t non e o f th e requirement s requir e apassenge r t o rea do r

op t out o f readin g an y information . Al l informatio n ca n b e provid e o n ticket s an dwebsite s s o a s t o b e easil y fotm dwhil e not requirin g an y additiona l tim e fro mpassenger s no t intereste di n accessin g th e information . Therefore , suc h cost s wer e no t estimated . Severa l commenter s argue dtha t establishmen t

o f contingencie s plan s with specifie dtim e limit s for tarma c delay s befor e deplanin g passenger s wil l lea dt o change s overal l tri p tim e for som e passengers , los t

tim e for cre w durin g taxi-backs , an dan increas e i n cancellations . It wa s argue d tha t i n orde r t o avoi dpotentia l litigatio n o r fines , cartier s woul db e mor e likel y t o retu mt o th e gat e an dcance l som e flights . Th e Departmen t acknowledge s th e conce mregardin g cancellation s an dpotentia l increase s i n delay s i f afligh t mus t retu mt o th e gat e an dthu s lose s it s plac e i n lin e t o depart , an di n respons e note s that tha t th e Rul e expressl y include s exception s t o requirin g th e cartier s t o allo w deplanin g i n situation s i n whic h ai r traffi c contro l advise s th e pilot-in-comman d tha t rettunin g t o th e gat e o r anothe r disembarkatio n poin t

elsewher e i n orde r

t o deplan e passenger s woul dsignificantl y dismp t airport operatio n an di n situation s whe n deplanin g woul d presen t asafet y issue . Therefore , th e RI A retain s th e assumptio n o f n o incrementa l increas e i n tri p times . Mor e tha n on e commente r argue dtha t

arequiremen t

allowin g passenger s t o deplan e afte r an extende don-tarma c dela y woul dsignificantl y increas e delay s an dcancellations . Th e RI A onl y seek s t o measur e th e incrementa l increas e i n cost s - i.e . th e delay s o r cancellation s that

otherwis e woul dnot

hav e occurre dbut

for di e Rule . Th e RI A assume s tha t cartier s wil l coordinat e with airport s an dgroun dcontro l an dnote s th e exception s for safet y an dai r traffi c control . Therefore , th e RI A doe s not

chang e it s estimat e o f

cancellation s for

th e Rule , but

doe s conduc t

asensitivity tes t o n th e impac t

o f large r cancellatio n rate s o n overal l results .

H n I Decision Economic

s Pag e • 5 8A commente r argue dtha t

benefit s t o meeter s an dgreeter s shoul db e removed . Th e RI A i s onl y calculatin g benefit s t o meeter s an dgreeter s for arrivin g passenger s wh o no w deplan e earl y du e t o th e requirement s o f

th e contingenc y plans . O n commente r

argue s tha t

th e benefit s for

provisio n o f

food , water , et c ar e not incrementa l benefit s t o th e Rule ; tha t 'the y alread y exist, ' Whil e foo dan dwate r alread y 'exist ' the y ar e not require dt o b e serve dt o passengers . Th e Rul e ensure s th e provisio n o f foo dan dwater , an d guarantee dacces s t o the mi s stil l considere dabenefit . A fe w commenter s argue dtha t premium s o n th e valu e o f tim e shoul dincreas e a s length o f dela y increases , essentiall y increasin g with eac h uni t o f tim e (suc h a s 1 5 minute s o r hal f an hour) . Adequat e dat atha t

coul db e applie dmincreasin g hal f hoiu : increment s wa s no t foimd , an dusin g th e curten t

premium s woul dhav e require dsettin g an arbitrary tim e at whic h tha t

premiu mwa s full y realized . A sensitivity analysi s i s conducte do n asignifican t increas e o n premium s o n th e valu e of tim e overall , but

n o analysi s o f

agradua l escalatio n o f

premium s i s included . A t leas t on e commente r

argue dthat

us e of th e statistic s fro mCanadia n hospital s postin g wai t time s i s no t

an appropriat e prox y t o us e for estimatin g th e impac t

o f postin g flight

delay dat ao n passenge r ticke t purchases ; statistic s fro mBT S shoul db e use dinstead . Sinc e very few customer s appea r t o b e awar e o f

th e dat a(an dtherefore , d o no t revie w whil e makin g purchases ) ther e wa s n o robus t estimat e t o us e a s aprox y fo r estimatin g th e impac t

o f postin g flight

delay dat ao n carrie r websites . Therefore , th e previou s prox y wa s retained . Furthe r researc h an dconsideratio n o f th e calculation s o f

passenge r

cost s an dbenefit s le dt o tw o othe r changes . First , th e Initia l Regulator y Impac t Analysi s incorporate dth e valu e o f knowin g tha t acontingenc y pla n exist s (wit h atim e premiu mo f

0,01 ) t o al l tim e passenger s woul dhav e otherwis e spen t

o n th e tarmac , no t

th e portio n o f

tha t tim e betwee n hour s on e an dthre e o f th e on-tarma c delay . Th e baselin e for th e Fina l Regulatory Impac t Analysi s applie s thi s premiu m onl y t o th e tim e betwee n hour s on e an dthre e tha t thos e passenger s spen dwaitin g o n th e tanna c an dconduct s asensitivity analysi s includin g th e premiu mallie dt o th e entir e tim e afte r on e hour . Second , whil e th e cost/valu e o f th e foo dan dwate r

provide dt o passenger s net s ou t i n th e ne t presen t valu e calculation , thos e estimate s ar e properl y include di n th e separat e presentatio n o f cost s an dbenefits .

K H l Decisio

n Economiis s Pag e • 5 9

### RESULT S AN D DISCUSSIO N

Th e goal o f

thi s analysis - i s t o estimat e incrementa l benefit s an dcost s o f adoptin g th e DO T Fina l Rul e t o secur e airlin e passenge r protections . Th e differenc e betwee n benefit s an dcost s quantifie dove r

th e plaimin g horizo n lifecycl e an ddiscounte dt o di e presen t represent s th e primary indicato r

of regulator y valu e for

money . Thi s follow s OM B Circular A-4 , whic h stipulate s tha t

thi s difference~th e ne t

presen t valu e (NPV)~i s t o b e regarde da s aprincipa l measur e o f

valu e produce db y abenefit-cos t analysis . Further , Executiv e Orde r 1286 6 state s tha t agencie s shoul dattemp t

t o maximiz e th e ne t

benefit s o f

thei r mlemakings , subjec t

t o statutory requirements . A n NP V greate r tha n zer o indicate s tha t

measure dbenefit s excee dmeasure dcost s an dthat th e regulatio n i s likel y t o increas e th e genera l leve l o f economi c welfar e accordingly . A n NP V of les s tha n zer o mean s tha t measure dcost s excee dmeasure dbenefits . Th e existenc e an d magnitud e an dimplication s for NPV o f unutneasuredcost s an dbenefit s may b e assesse di n a threshol danalysis . Thi s sectio n describe s th e comparativ e analysi s o f estimate dcost s an dbenefit s for eac h regulatory altemative . Thi s sectio n als o discusse s th e ris k an dsensitivity analysi s o f NP V finding s i n relatio n t o ke y variables . Th e Fina l Rul e an dth e fiv e altematives ar e assesse dfro m both quantitativ e an dnon-quantitativ e (qualitative ) grounds . Th e nex t sectio n describe s th e outcome s o f

th e quantitativ e analysis . Th e sectio n followin g tha t discusse s th e qualitativ e analysis . 

### 4. 1 Net Result s The Fina l Rul e an dAltemative s Monetize doutcome s wer e estimate dfor al l impact s tha t

me t tw o conditions : (1 ) volum e estimate s wer e availabl e o r coul db e estimated ; an d(2 ) value s of uni t change s i n outcome s coul d b e determine do r

estimate dusin g analogou s experience , availabl e statistics , o r with acceptabl e shado w pricin g techniques . (Specifi c cost s an dbenefit s ar e detaile di n Chapte r 2 an dAppendi x A. ) Th e tim e frame t o estimat e monetize dimpact s i s se t at 2 0 years . Carrier s wil l b e expecte dt o b e complian t b y th e en do f

th e firs t year . Th e estimate dbenefit s b y altemativ e ar e als o assessed . Wher e econoini c impact s wer e calculate d t o b e negative , the y ar e adde dt o th e estimate dexpenditure s t o calculat e estimate dtota l socia l costs . Th e expecte dpresen t

valu e o f cost s ove r

a20-year

perio dusin g a7 % discoun t rat e i s $100. 6 millio n for

carrier s an dpassengers ; whil e th e expecte dpresen t valu e o f benefit s i s $169. 7 million . NP V o f

th e Fina l Rul e for

2 0 year s at

a7 % discoimt

rat e i s $69. 1 million . Th e NPV s fo r th e altemative s rang e fro m-$1 7 t o $7 4 millio n at a7 % discoimt

rate . Th e ne t presen t valu e o f altemative s 1 an d2 ar e extremel y close , whil e an dth e ne t presen t valu e o f th e Rul e an daltemative s 3 an d4 ar e als o very similar . Give n th e multipl e avenue s throug h whic h uncertaint y i n specifi c input s ca n affec t comparativ e ne t

benefit s amon g altematives , th e HZRTDBcisio n Economic s Pao e • 6 0Departmen t ha s chose n th e optio n for th e Rul e whic h i t

believe s maximize s both quantifiabl e an d unquantifiabl e ne t

benefit s t o society , withou t placin g a n undu e burde n o n th e industry . Tabl e 29 : Summar y o f Cost s an d Benefit s fo rFina l Rul e an d Alternative s 2|t_^Ye» riifsoycl e Analysis : i«neflt9(mHHon8

> Fina l Rul e Alt l Att2 . Alt s Ait 4 

### A m 2 0 Yea rP V 7 % discountin g $169. 7 $152. 7 $149. 1 $144. 0 $168. 2 $168. 6 2 0 Yea rP V 3 % discountin g $249. 2 $224. 5 $219. 2 $211. 9 $247. 0 $247. 5

Fina l Rut e Aifcl i Alt4 ^ 

### iMm 2 0 Yea rP V 7 % discountin g $100. 6 $79. 3 $75. 4 $80. 4 $100. 6 $185. 8 2 0 Yea rP V 3 % discountin g ;;NiEP#ifiMBiiiioiffli)-f.:. : $141. 3 $110. 3 $104. 7 $111. 9 $141. 3 $230. 3 Fina l Rul e Alt l Al t 2 Ai t 3 Alf 4 Alt s 2 0 Yea rP V 7 % discountin g $69. 1 $73. 4 $73. 7 $63. 7 $67. 6 ($17.2) 2 0 Yea rP V 3 % discountin g $107. 9 $114. 2 $114. 5 $100. 0 $105. 7 $17. 2 Th e followin g table . Tabl e 30 , present s aimual cost s an dbenefit s - not discounte d- separatel y for cartier s an dpassengers , for eac h componen t

o f th e Rule , Tabl e 3 1 show s th e sam e result s for eac h altemativ e for

th e component s o f

tha t altemativ e whic h diffe

r fro mth e Rul e (eac h altemativ e differ s onl y o n on e component , an donl y tha t component' s different

cost s an dbenefit s ar e presented) . (Note : Thes e table s ar e not discounte dan dtherefor e d o no t tota l t o th e value s presente di n Tabl e 29 , whic h ar e discounte dt o includ e th e mone y valu e o f time . Thes e table s ar e presente d undiscounte dfor

th e reade r

t o se e th e annua l cost s an dbenefit s pe r yea r an dth e growth ove r time.)

i x R I Decisio n Economic s Pag e • 6 1

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# IProvisiona l Calculatio n o f Benefit s fo r

Componen t

5 A s note di n Sectio n 2.6 , n o goo destimat e ha s bee n foun dt o dat e o f th e valu e t o customer s o f generall y improve dcustome r servic e expecte dt o resul t fro mimplementatio n an dself-auditin g o f adherenc e t o acustome r

servic e plan . A possibl e methodolog y t o measur e thi s wa s explore dan d estimate dbu t

no t include di n th e mai n analysis . Th e provisiona l approac h assume s eac h projecte dcomplain t

avoide di s equa l t o asingle improve dperso n trip . A premiu mo n th e valu e o f tim e coul db e applie dt o eac h avoide dcomplain t an dmultiplie db y th e valu e of tim e for ai r passenger s for

th e averag e tri p length,^ ' I f th e premiu mo n th e valu e of tim e o f .0 1 (th e sam e use dfor

th e certaint y o f

knowin g tha t

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yea r i n benefit s woul doccur.^ ^ Th e 2 0 yea r presen t valu e o f thes e benefit s a

t 7 % i s $2. 2 million , approximatel y 1. 3 percen t o f benefit s for

th e tota l Fina l Rule,^ ^ Tabl e 32 : Provisiona l Estimate s o f Expecte d Benefit s o f Componen t 5 , Implementin g an d Self Auditin g Custome rServic e Pla n
P V 10-yea rperio d a

t 3 % discoun t rate 2 0 Yea rExpecte d Benefit s (SM ) $2. 2 Componen t 5 Provisiona t

Benefit s a s a % o f Tota l Benefit s fo rEntir e Rul e

1.3 % P V 10-yea rperio d a

t 7 % discoun t rate $3. 0 1.2 % 

### 4. 2 Ris k Analysi s Economi c forecast s traditionall y tak e th e for mo f asingl e "expecte doutcome " supplemente db y altemativ e scenarios . Th e limitatio n o f aforecas t

with asingl e expecte doutcom e i s that whil e i t ma y provid e th e singl e bes t statistica l estimate , i t

offer s n o informatio n abou t th e rang e o f possibl e outcome s an dassociate dprobabilities . A commo n approac h i s t o creat e "hig h case " an d"lo w case " scenario s t o bracke t th e centra l estimate . Thi s scenari o approac h ca n exacerbat e th e proble mof dealin g wit h uncertainty becaus e i t give s n o indicatio n o f

likelihoo dassociate dwith th e altemativ e outcomes . Th e commonl y reporte d"hig h case " ma y assum e that mos t underlyin g assumption s deviat e i n th e sam e directio n fro mthei r

expecte dvalue , an dlikewis e fo r th e "lo w case. " I n reality , th e likelihoo dtha t al l underlyin g factor s shif

t i n th e sam e directio n simultaneousl y may b e very remote , A mor e comprehensiv e uncertaint y analysi s provide s abette r pictur e of

th e uncertaintie s inheren t i n a n analysi s than th e scenari o approac h o r sensitivity analysi s b y avoidin g th e lac k o f

' ' Ther e ar e severa l assumption s require dwit h thi s approac h that

ma y b e erroneous , including : that eac h expecte d complain t avoide daffect s on e individua l flight i n equa l proportio n t o al l complaints ; that premium s o n th e comfort o f trave l ar e applicabl e t o al l custome r complaints , includin g problem s wit h fares , ticketing , discriminatory events , delaye dflights , etc. ; tha t

complaint s ar e equall y distribute dfor al l tri p lengths ; an dothers . Thi s premiu mi s base dupo n (ye t lowe r than ) th e lowes t

valu e o f tim e premiu mdu e t o variou s level s o f comfort i n othe r mode s of transpor t foun di n arecen t

literatur e review . Se e Sectio n 2.1. 1 for mor e detail . ^ ^ Onl y estimate s o f

complaint s fro m200 7 wer e use di n thi s calculation , s o a s no t t o reflec t th e unusua l natur e o f

th e 200 8 air trave l industry . 7 2

HZR I Decisio n Econoiiii( » Pag e • 7 5perspectiv e i n "high " an d"low " case s b y measurin g th e probabilit y o r "odds " tha t

a n outcom e wil l actuall y materialize . Thi s i s accomplishe db y attachin g range s (probabilit y distributions ) t o th e forecast s o f

eac h inpu t

variable . Th e approac h allow s al l input s t o b e varie dsimultaneousl y withi n thei r

distributions , thu s avoidin g th e problem s inheren t i n conventiona l sensitivity analysis . Thi s analytica l ris k

approac h wa s take n for

thi s RIA , Usin g Mont e Carl o simulatio n techniques , eac h variabl e an dforecastin g coefficien t wa s allowe dt o vary simultaneousl y accordin g t o it s associate dprobabilit y distribution . Fina l probabilit y distribution s represen t acombinatio n o f frequentis t

an dsubjectiv e probabilit y informatio n draw n fro mstatistica l dat aan danalys t experience . Th e outcom e o f eac h iteratio n i s aggregate dt o determin e th e percentag e o f th e tim e an y particular

outcom e i s exceeded . Cos t an dBeneflt s Estimate s Probabilit y Base dRange s Applyin g uncertainty t o benefi t an dcos t

estimate s provide s arang e o f probability-base d outcome s for

th e expecte dbenefit s an dcost s o f th e Rule , Th e variou s low , medium , an dhig h estimate s o f

dat awith variabl e input s ar e detaile di n th e Appendi x A , alon g with sourc e information . Figur e 7 belo w show s th e probabilit y distributio n o f th e NP V o f

monetize dbenefit s for th e Fina l Rul e usin g 7 % an d3 % rea l discoun t rates , ove r

a20-year

perio do f

analysis . Figure s 8 an d9 sho w th e probability distribution s o f cost s an dbenefit s ove r

2 0 year s separately , usin g 7 % an d3 % rea l discoun t rates . Figur e 1 0 show s th e 20-year probabilit y distributio n o f th e NP V for th e Fina l Rul e an dth e considere daltematives . Th e range s ar e drive n b y th e uncertaint y surroundin g th e estimatio n assumptions . Therefore , th e figure s illustrat e th e spectm mo f potentia l outcome s give n th e RI A mode l input . Fo r example , th e result s o f

th e uncertaint y analysi s indicat e that , usin g a7 % discoun t rate , ther e i s a n 80 % probabilit y tha t

th e 2 0 year

NP V o f th e Fina l Rul e wil l b e betwee n $21. 8 an d$123. 4 million . Tabl e 33 : Summar

y Result s o f Ris k

Analysi s 20-Yea rPerio d Media n NP V t$M > iC' e Probabilit y o f NO T Exceedin g 90 % PralgbliM i Fina l Rul e a

t 7 % discoun t rat e $66. 2 $21. 8 Fina l Rul e a

t 3 % discoun t rat e $101. 8 $37. 9 $193. 2 Th e median NP V varie s slightl y fromth e expecte dNP V i n Tabl e 29 . Usin g a7 % discoun t

rate , th e 2 0 yea

r cos t o f implementatio n wil l b e betwee n $74. 5 an d$109. 4 millio n for

carrier s an dpassenger s (se e Figur e 8 ) an dmonetize dbenefit s wil l b e betwee n $123. 6 an d$223.2 2 millio n (se e Figur e 9) .

(O^ l Decisio n Economic s Pag e • 7 6Figur e 7 : Ne t Presen t Value , Usin g 3 % an d 7 % Discoun t Rates , Probabilit y Distributio n fo rth e

Rul e

Projecte d NP V i n Million s o f US $

HZR I Decisio n Economic s Pag e • 7 7Figur e 8 : Presen t Valu e o f Cost s Usin g a 3 % an d 7 % Discoun t Rate , Probabilit y Distributio n fo rth e

Rul e

C D 

# 1 (1 ) O c o ^ f v 5 k . Q . 100 % - 90 % - 80 % • • 70 % - 60 % - ^ 50 % - 40 % - 30 % - 20 % - 10 % - 0 % $ 0 $12 0 PfoJectB d Cost s i n * Million s o f US $

H H l Decisio

n Economic s Pag e • 7 8Figur e 9 : Presen t Valu e o f Benefit s Usin g a 3 % an d 7 % Discoun t Rate , Probabilit y Distributio n fo r

th e Rul e 100 % 90 % 80 % 70 %

• o § 60 % X

= 50 % o > ^ 1 40 % O Q . 30 % 20 % 10 % 0 % $ 0 $182.0 4 "•*"Tota l Benefit s Discoiiinte

d a t 7 % Tota l Benefit

s DIscoiinte

d a t 3 % $5 0 $10 0 $15 0 $20 0 $25 0 $30 0 $ ; Projecte d Benefit s i n MiiiionsofUS S 

### A s Figur e 1 0 illustrate s below , th e NP V o f th e Fina l Rule an dall consideredaltemative s (except Altemativ e 5 ) diffe

r onl y slightly . The NP

V fo r th e Fina l Rule an dAltemative s 1-

4 ar e nearly identical . Th

e NP V fo r Altemativ e 5 (requiring travel agencie s t o publis h dela

y data ) ha s th e lowes t NP V a t -$16.9 8 millio n due to th e additiona l cost s imposedon thi s industr y an d uncertaint y regarding th e incrementa

l benefit s o

f including travel agencies .

H I R I Decisio n Economic s Pag e • 7 9Figur e 10 : Presen t Valu e o f Net Benefit s Usin g a 7 % Discoun t Rate , Probabilit y Distributio n fo rth e

Fina l Rul e an d Alternative s 100 %

it-ic n Projecte d NP V I n *^° " Million s o f US $ 

### 4. 3 Sensitivit y Analysi s I n additio n t o th e uncertainty analyse s conducte dt o estimat e probabilit y range s o f outcomes , sensitivity analyse s wer e conducte dt o isolat e th e impac t o f severa l ke y variables , OM B Circular

A- 4 provide s th e followin g guidanc e with respec t t o th e conduc t

o f sensitivit y analyses : Us e anumerica l sensitivity analysi s t o examin e ho w th e result s o f you r analysi s var

y wit h plausibl e change s i n assumptions , choice s o f inpu t data , an daltemativ e analytica l approaches . Sensitivity analysi s i s especiall y valuabl e whe n th e informatio n i s lackin g t o carry ou t aformal probabilisti c simulation . Sensitivity analysi s ca n b e use dt o find"switc h points " - - critica l paramete r value s at whic h estimate dnet benefit s chang e sig n o r

th e lo w cos t

altemativ e switches . Sensitivity analysi s usuall y proceed s b y changin g on e variabl e o r

assumptio n at

atime , bu t

i t ca n als o b e don e b y varyin g acombinatio n o f variable s simultaneousl y to lea mmor e abou t th e robustnes s o f

you r result s t o widesprea dchanges . Give n th e OM B guidance , sensitivitie s teste dinclud e th e following : • Increas e i n th e cos t

o f complianc e with al l component s o f th e Fina l Rul e b y a

n additiona l 100 % • Increas e i n th e rat e o f

cancellation s a s aresul t

o f th e Rul e b y 100 % • Increas e i n th e rat e o f

cancellation s a s aresul t

o f th e Rul e b y 200 %

H Z R [ Decisio n Economic s Pag e • 8 0• Reductio n of th e estimate dvalu e o f

trave l tim e premium s for acces s t o food , wate r

an d clea n lavatories , for

deplanin g an dcertaint y b y 50 % • Reductio n o f

th e estimate dvalu e of

trave l tim e for

meeter s an dgreeter s b y 50 % • Addin g th e valu e o f

trave l tim e premium s for knowin g tha t

acontingenc y pla n exist s a s a benefi t t o al l passengers , no t

jus t thos e o n th e tarma c for

mor e tha n an hou r Th e result s o f

th e sensitivity analysi s o n ke y cos t assumption s sho w tha t

doublin g al l estimate d carrie r cos t input s generate s anegativ e NP V for th e Fina l Rul e (-$9. 5 million ) an dAltemative s 3 , 4 , an d5 . Doublin g th e estimat e o f th e expecte dincreas e i n rat e o f flight cancellation s increase s cost s but

ha s amor e moderat e impac t o n th e NP V for

th e Fina l Rul e an dal l altematives ; th e NP V for th e Fina l Rul e change s fro m$69. 1 t o $54. 7 milHon . Triplin g th e expecte dincrementa l increas e i n th e rat e o f fligh t cancelation s lead s t o an NP V o f $4 7 million . Tabl e 34 : Sensitivit y Analysi s Results , Cost s illliM : Monetize d Cost s an d BensTlt s Fo rFina l Rul e an d Alternative s Unde r lilfejpnsltlvit y Test s (millions ) -Cos t Assumption s Bas e Cas e - Rul e Sensitivit y Tes t -Impac t fro m Chang e I n

100 % Increas e i n th e Cost s o f Complianc e t o Carrier s 100 % Increas e i n

th e Rat e o f Fligh t Cancellation s 200 % Increas e i n Rat e o f Fligh t Cancellation s Presen t Valu e o f Cost s Fina l Rul e $100. 6 $179. 2 $115. 0 $122. 7 Alt l $79. 3 $148. 7 $81. 7 $83. 1 Al t 2 $75. 4 $143. 3 $75. 7 $75. 9 Alt s $80. 4 $151. 3 $89. 1 $96. 9 Al t 4 $100. 6 $179. 2 $115. 0 $122. 7 Alt s $185. 8 $264. 3 $200. 1 $207- 9 Presen t Valu e o f Benefit s (n o changes ) Fina l Rul e $169. 7 $169. 7 $169. 7 $169. 7 Alt l $152. 7 $152. 7 $152. 7 $152. 7 Ai t 2 $149. 1 $149. 1 $149. 1 $149. 1 Ai t 3 $144. 0 $144. 0 $144. 0 $144. 0 Ai t 4 $168. 2 $168. 2 $168. 2 $168. 2 Ait s $168. 6 $168. 6 $168. 6 $168. 6 Ne t Presen t Valu e Fina l Rul e $69. 1 ($9.5 ) $54. 7 $47. 0 Alt 1 $73. 4 $4. 0 $71. 0 $69. 6 Al t 2 $73. 7 $5. 8 $73. 4 $73. 2 Alt s $63. 7 ($7.3 ) $54. 9 $47. 2 Al t 4 $67. 6 ($10.9 ) $53. 2 $45. 5 Alt s ($17.2) ($95.7 ) ($31.6 ) ($39.3 ) Baselin e fo rSensitivit y Analysi s is : 2 0 yea rtimeframe , 7 % Discoun t Rate .

HZR I Decisio n Economic s Pag e • 8 1Th e result s o f th e sensitivity analysi s o n ke y benefi t assumption s reveal s moderat e t o smal l impac t i n overal l ne t

presen t value . Halvin g th e premium s o n th e value s o f tim e reduce s th e ne t presen t valu e o f th e Rul e fro m$69, 1 millio n t o $47, 5 millio n (a t 7 % discoimt

rate) ; th e variou s altematives als o se e decline s i n NPV o f similar proportions . Reducin g th e premiu mfor meeter s an dgreeter s produce s change s i n benefit s tha t ar e small , jus t

unde r $0, 1 million . Addin g th e premiu mo n tim e du e t o th e comfor t o f knowin g tha t

acontingenc y pla n exist s t o th e entir e tim e tha t passenger s woul dhav e bee n delaye do n th e tarma c for mor e tha n a

n hou r (instea donl y th e tim e betwee n on e an dthre e hours ) increase s benefit s for th e Fina l Rul e fro m$169. 7 millio n t o $170. 9 million , an dne t

presen t valu e fro m$69. 1 millio n t o $70. 3 million . Tabl e 35 : Sensitivit y Analysi s Results . Benefit s Compariso n o f Presen t Valu e o f Monetize d Cost s and^fiHrtti i Sensittvit y Test s (million; ^ a l Rul e an d Alternative s UncfllWil'^' " iumptlon s

Bas e Cas e • Rul e Sensitivit y Tes t - Impac t fro m Chang e In :

50 % Reductio n I n Al l Estimate d Valu e O f Trave l Tim e Premium s 50 % Reductio n I n Premiu m fo rMeeter s an d Greeter s Premiu m fo rKnowin g a Pla n Existin g Applie d fo ral l Passenger s O n Tarma c 1 hou r+ Presen t Valu e o f Cost s (n o changes ) Fina l Rul e $100. 6 $100. 6 $100. 6 $100. 6 Alt l $79. 3 $79. 3 $79. 3 $79. 3 Al t 2 $75. 4 $75. 4 $75. 4 $75. 4 Ait s $80. 4 $80. 4 $80. 4 $80. 4 Ai t 4 $100. 6 $100. 6 $100, 6 $100. 6 Ait s $185. 8 $185. 8 $185. 8 $185. 8 Presen t Valu e o f Benefit s Fina l Rul e $169. 7 $148. 1 $169. 7 $170. 9 Ait i $152. 7 $139. 6 $152. 7 $153. 0 Ai t 2 $149. 1 $137. 6 $149. 1 $149. 4 Ait s $144. 0 $132. 9 $144. 1 $144. 3 Al t 4 $168. 2 $147. 6 $168. 3 $168. 5 Alt s $168. 6 $148. 0 $168. 6 $168. 9 Ne t Presen t Valu e Fina l Rul e $69. 1 $47. 5 $69. 1 $70. 3 Ait 1 $73. 4 $60. 4 $73. 5 $73. 8 Al t 2 $73. 7 $62. 2 $73. 7 $74. 0 Alt s $63. 7 $52. 6 $63. 7 $63. 9 Al t 4 $67. 6 $47. 0 $67. 7 $67. 9 Alt s ($17.2) ($37.8 ) ($17.2) ($16.9 ) Baselin e fo rSensitivit y Analysi s is : 2 0 yea rtimeframe , 7 % Discoun t Rate .

H H . I Decisio n Economic s Pag e • 8 2

### 4. 4 Quaiitativ e an d Non-monetize d Benefit s

Qualitativ e benefit s o f

th e Fina l Rul e tha t

coul dnot

b e measure do r

monetize dar e discusse d below . Ther e ar e likel y importan t qualitativ e benefit s for

passenger s a s wel l a s th e carriers . Mos t o f thes e benefit s ar e possibl e likel y sid e effect s t o th e Rule . Thes e benefit s may include : Unde r Componen t

1 (Contingenc y Plans ) Improve dManagemen t O f Fligh t Delays . Ther e i s apossibilit y tha t th e existenc e o f contingenc y plan s for

lon g on-boar ddelay s an dthei r publicatio n o n carrie r

website s coul dlea dt o heightene dsensitivity t o additiona l dela y cost s amon g carrie r management . Thi s coul dlea dt o improve dmanagemen t o f delaye dflights , diversio n schedules , an d othe r fligh t managemen t

issue s a s carrier s hav e additiona l incentiv e t o avoi dlon g on boar ddelays . Reduce dStres s Amon g Delaye dPassenger s An dCrew . A possibl e decreas e i n passenge r anxiety with improve dcomfor t an dconvenienc e brough t b y contingenc y plan s ma y lea dt o reduce dstres s amon g delaye dpassenger s an dcrew . Thi s may decreas e mino r conflict s an doccasiona l altercation s tha t aris e whe n peopl e ar e unde r stres s for extende d period s i n clos e quarters . Th e resul t wil l b e amor e pleasan t experienc e fo r

passenger s an dcre w tha t

ma y no t b e full y take n int o accoun t i n th e measurement s employe di n thi s RIA . Decrease dAnxiet y Wit h Regar dT o Flying . Knowin g tha t contingenc y plan s exis t

ma y brin g relie f

durin g lon g on-boar ddelay s an dlowe r overal l fligh t

anxiet y fo r

som e passengers , makin g som e passenger s les s uneas y abou t overal l abou t

travelin g b y air . Thi s ma y lea dt o asignificantl y improve dtrave l experienc e fo r som e passenger s (mor e s o tha n i s estimated ) an dma y eve n lea dt o an increas e i n overal l deman dfor ai r travel . Improve dCustome r

Goo dWil l Toward s Carriers . A s extende don-tarma c delay s withou t food , wate r

an dacces s t o clea n lavatorie s o r withou t th e ability t o deplan e after thre e hour s essentiall y disappear , overal l custome r 'goo dwil l toward s carrier s shoul d improve . Improve dgoo dwil l ma y lea dt o asligh t increas e i n demand . Improve dOveral l Carrie r Operations . Carrier s ma y b e abl e t o improv e genera l operation s base do n analysi s o f dat ano w require dt o b e store do n substantiv e delay s an d carrie r responses . Thi s recall s th e busines s managemen t maxim , "Wha t

yo u ca n measure , yo u ca n manage. " I

f carrier s measur e substantiv e delays , carrie r responses , an daudi t custome r servic e plans , th e resul t wil l establis h benchmark s for improvements . Fro m thes e benchmarks , carrier s ca n improv e service , leadin g t o mor e unquantifie dpassenge r benefits . Unde r Componen t

2 (Custome r

Complaints ) Decrease dAnge r

Towar dCarrier s Durin g Resolutio n o f Complaints . Passenger s wh o fil e complaint s ma y experienc e greate r reassuranc e an dles s agitatio n whil e awaitin g resolutio n o f

acomplain t

base do n Componen t

2 o f th e Rule . Th e valu e o f

thi s comfor

t i s no t quantifiabl e becaus e n o benchmark tim e o f waitin g fo r

arespons e i s available . Th e Fina l Rul e stipulate s tha t

passenger s receiv e asubstantiv e respons e t o complaint s (thoug h no t ye t aresolutio n t o th e complaint) , whic h may brin g asens e o f reassuranc e whil e
I x R I Decisio n Economic s Pag e • 8 3waiting . Passenger s ma y fee l tha t thei r complaint s ar e legitimat e whe n carrier s respon dt o the mspecificall y instea do f jus t notin g tha t

acommunicatio n ha s bee n received . Decrease dLega l an dAdministrativ e Fee s fro mBette r Response s t o Consume r Complaints . I t

i s possibl e tha t

amor e substantiv e respons e t o custome r complaint s ma y decreas e future cost s t o carriers. Customer s wh o receiv e atargete drespons e t o a complain t may b e les s likel y t o fil e sui t o r contac t th e carrie r

multipl e time s t o trac k resolutio n o f

thei r complaint . Unde r Componen t

3 (Chronicall y Delaye dFlights ) Improve dCustome r

Goo dWil l Toward s Carriers . A s fewer flight s wil l b e regularl y arrivin g substantiall y afte r thei r schedule darriva l time , passenger s wil l perceiv e an improvemen t

th e leve l o f

servic e provide db y carriers . I n tum , custome r goo dwil l toward s carrier s shoul dimprove ; improve dgoo dwil l ma y lea dt o asligh t increas e i n demand . Improve dManagemen t

O f Flight s an dSchedules . Th e threa t o f havin g afligh t

labele d chronicall y delaye dma y lea dsom e carrier s t o see k othe r avenue s o f

improvin g on-tim e performanc e i n additio n t o extendin g schedules . Suc h effort s coul dlea dt o improve d managemen t

o f flight s tha t

ar e frequentl y delayed . Unde r Componen t

4 (Postin g Dela y Data ) Improve dManagemen t

O f Flight s an dSchedules . Th e postin g o f on-tim e performanc e dat afor flight s coul dlea dcarrier s t o bette r managemen t

o f flight s schedule s a s , passenger s begi n t o avoi dcertai n flight s with poo r historica l performance . Unde r Componen t

5 (Incorporatin g an dAuditin g Custome r Servic e Plans ) Valu e o f Improve dCustome r

Servic e Base do n Self-Auditin g o f Adherenc e t o Custome r

Servic e Plans . Historica l dat ao n complaint s file dwit h DO T show s tha t carrier s tha t

implemen t

custome r servic e plan s an dself-audi t adherenc e t o th e pla n hav e fewer complaint s tha n othe r

carriers . Thi s presumabl y i s base dor t a n improvemen t

i n service s fro mcarrier s t o passengers , includin g bette r baggag e handling , fewer ticketin g errors , les s discriminatio n an dothe r problem s for

passengers . Carrier s ar e providin g servic e i n abette r

manne r t o consumers , but

th e valu e o f

thi s chang e i s difficul t

t o estimate . Ther e ar e sufficien t example s o f

carrier s that

hav e adopte dan audi t

o f thei r custome r servic e pla n t o estimat e th e impac t o f suc h actio n o n overal l custome r service , but no t enoug h informatio n t o monetiz e tha t impact . Improve dCustome r

Goo dWil l Toward s Carriers . A s th e leve l o f servic e provide db y carrier s improve s an dcomplaint s decline , overal l custome r goo dwil l toward s carrier s shoul dimprove . Improve dgoo dwil l ma y lea dt o asligh t increas e i n demand .

H I RI Decisio n Economic s Pag e • 8 4

### FINA L SiVIAL L BUSINES S IMPAC T ANALYSI S

A s directe db y th e Regulator y Flexibilit y Ac t o f 1980 , a s amende db y th e Smal l Busines s Regulatory Enforcemen t

Fairnes s Ac t

o f 199 6 (SBREFA) , a s wel l a s Executiv e Orde r 13272 , th e Departmen t

i s require dt o conside r th e potentia l impac t

o f it s regulation s o n smal l entities , includin g smal l businesses , smal l nonprofi t organization s an dsmal l govemmenta l jurisdictions . Thi s proces s help s determin e whethe r t o certif y aml e for

regulator y flexibility purpose s fo r entitie s tha t

ar e mor e likel y t o b e adversel y impacte db y ne w standards . Thi s RI A i s intende dt o support appropriat e regulator y altematives tha t minimiz e th e economi c burde n for smal l businesses . Reaso n fo r

Agenc y Actio n Th e DO T i s proposin g aml e t o Enhanc e Airlin e Passenge r Protections , Give n th e increasin g rate s o f complaint s file dagains t carriers , repeate dinstance s o f lon g on-boar ddelays , an dth e significan t

rat e o f delaye darrival s ove r

severa l years , DO T i s considerin g regulation s t o limi t on boar dtarma c delays , t o guarante e passenge r acces s t o basi c amenities , an dcertai n provision s t o improv e on-tim e arriva l performanc e an dimprov e custome r service. Numbe r an dType s o f

Smal l Entitie s t o Whic h th e Fina l Rul e Wil l Appl y Thi s Fina l Rul e wil l impac t smal l carriers . Fo r

regulator y evaluations , smal l carrier s ar e thos e tha t operat e servic e with plane s with 6 0 o r fewer seats,^" ^ Componen t

1 (th e Developmen t

an d Implementatio n o f

aContingenc y Plan) , Componen t 2 (Respondin g t o Consuihe r Complaints) , an dComponen t

5 (Adoptio n an dSelf

- Audi t o f Custome r

Servic e Plans ) o f

thi s Fina l Rul e appl y t o th e domesti c flight s o f carrier s with regularl y schedule dpassenge r flight s tha t

operat e servic e with an y aircraf

t with 3 0 o r

mor e seats . Onl y smal l carrier s tha t collec t a t leas t 1 % o f al l domesti c passenge r

revenu e mus t

compl y with Component s 3 (Chronicall y Delaye dFlight s an d Unfai r an dDeceptiv e Practice ) an d4 (Postin g Dela y Data) , Eleve n smal l carrier s certifie db y DO T tha t woul db e impacte db y th e Fina l Rul e hav e bee n identifie dvi aBTS . Thes e carrier s ar e liste di n th e tabl e below . Carrier s tha t onl y operat e aircraf

t with 3 0 o r

fewer seats , primaril y commute r carriers , ar e exemp t

fro mthi s Fina l Rule .

7 4 Se e 1 4 CI ^ Chapte r

11 . Not e that

th e Smal l Busines s Administratio n definitio n o f smal l carrier s i s no t

used . H I R I Decisio n Economic s Pag e • 8 5Tabl e 36 : Smal l Carrier s wit h Plane s Onl y betwee n 3 0 an d 6 0 Seat s

Ai rTranspor t Internationa l Amerista rAi rCarg o Cap e Ai r Chautauqu a Airline s Inc . Colga n Ai r Comnfiutai rAk a Champlai n Enterprises , Inc . Er a Aviatio n ExpressJe t Airline s Inc . Islan d Ai rHawai i Piedmon t Airline s Tran s State s Airline s Thes e 1 1 carrier s ar e affecte db y Component s 1 an d2 , ExpressJe t i s th e onl y smal l ai r

carrie r collectin g at

leas t 1 % o f domesti c passenge r

revenu e an dtherefor e subjec t t o othe r rale components . Impact s o n Smal l Entitie s Smal l carrier s tha t

wil l b e subjec t

t o thi s Fina l Rul e ar e identifie dvi aestimatio n o f aircraf t siz e a s reporte di n th e BT S T-lO O database . Sinc e thes e carrier s ar e not require dt o report

dela y dat a t o th e BTS , ther e ar e n o small-carrier-specifi c dat at o estimat e likel y flight s b y smal l certifie d carrier s tha t

woul db e subjec t

t o Componen t

1 o f th e Rule . T o estimat e th e likel y numbe r o f smal l carrie r

flight s tha t

woul db e impacte db y th e Rule , aconservativ e assumptio n wa s mad e tha t distributio n o f

delay time s acros s smal l certifie dcarrier s mirror s that acros s reportin g carriers . I f smal l carrier s ar e les s likel y t o hav e lon g on-tarma c delay s tha n larg e carriers , thi s assumptio n may overstat e th e numbe r o f smal l carrie r

flight s tha t

woul db e affected , an dthu s th e actua l cost s t o smal l carriers. Cost s similar

t o thos e for

larg e carrier s wer e als o attribute dt o smal l carrier s excep t for th e fue l cost s t o taxi-bac k

a n aircraft . Averag e fuel bu mrate s for smalle r aircraf t wer e use dt o calculat e smal l carrie r

costs . Thi s RI A doe s not calculat e acos t

for eac h aircraf

t owne db y eac h carrier . Rather , average s for

smal l carrie r

aircraf t ar e used . Overal l cost s for

smal l carrier s wer e calculate dsimilar t o thos e for

large r carriers. Th e followin g tabl e present s th e tota l cost s for eac h component , an dfor th e entir e Rule . Tabl e 37 : Tota l Smal l Carrier s Cost s (i n millions ) fo reac h Componen t

Componen t 1 $30. 3 Componen t

2 $3. 4 Componen t

3 $0. 6 Componen t

4 $7. 0 Componen t

5 $7. 6 Tota l

$48. 9 I n Tabl e 38 , cost s ar e attribute dpe r carrie r base do n th e percentag e of tota l departure s performed , ExpressJet , whic h account s for 36 % o f al l departure s performe do f thi s group , ha s th e highes t aimual costs .

H I R I Decisio n Economic s Pag e • 8 6Tabl e 38 : Annualize d Cost s pe r



# im^^-n^^--: - Ai rTranspor t internationa l (Domestic ) Amerista rAi rCarg o (Domestic ) Cap e Ai r(Domestic ) Chautauqu a Airiine s inc . (Domestic ) Colga n Ai r(Domestic ) Commutai rAk a Champiai n Enterprises , Inc . (Domestic ) Er a Aviatio n (Domestic ) ExpressJe t Airline s Inc . (Domestic ) islan d Ai rHawai i (Domestic ) Piedmon t Airlirie s (Domestic ) Tran s State s Airline s (Domestic ) Firm , Te n Year s Componen t 1 $13,49 6 $2,57 8 $269,43 5 $516,81 4 $265,46 4 $81,86 8 $51,42 7 $1,028,72 4 $60,29 9 $319,73 0 $250,27 0 Componen t

2 $1,51 4 $28 9 $30,23 4 $57,99 2 $29,78 8 $9,18 7 $5,77 1 $115,43 4 $6,76 6 $35,87 7 $28,08 3 Oomponen t

• - " 3 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $20,37 1 $ 0 $ 0 $ 0 Componen t

4 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $237,65 9 $ 0 $ 0 $ 0 Componen t

5 $3,38 5 $64 7 $67,58 1 $129,63 0 $66,58 5 $20,53 5 $12,89 9 $258,03 0 $15,12 4 $80,19 6 $62,77 4 * Onl y ExpressJe

t wil l b e requiredto compl

y wit h component

s 3,4 , an d5 . 

### Thes e annualizedcost s pe

r carrie r ar e comparedagains t

availabl e aimua

l receipt s figures , show

n below . Tabl e 39 : Receipt s fo rSmal l Carrier s 

### :'•••••'tt"•'"-•'-"•! ; • " " •/^^-•.liH i Ai rTranspor t internationa l * Amerista rAi rCargo * Cap e Ai r Chautauqu a Airiine s inc . Colga n Ai r Commutai rAk a Champiai n Enterprises , Inc . Er a Aviatio n ExpressJe t Airiine s inc . islan d Ai rHawai i Piedmon t Airline s Tran s State s Airiine s Tota l Annua l Receipt s pe r fir m $330,991,46 0 $17,903,96 0 n/a " n/ a $389,313,00 0 n/ a n/ a $3,173,806,09 0 n/ a n/ a $679,520,99 0 * Include s revenu e fro mcarg o operation s (passenge r revenue s separat e fro mcarg o no t reported) . Source : BT S Schedul e P-I I an d P-12 . Onl y 4 o f th e 1 1 smal l carrier s include di n thi s analysi s repor t i n th e P-1 1 an d P-1 2 database s including : Ai r Transpor t

International , Amerista r Ai r Cargo , ExpressJe t

Airlines , an d Tran s State s Airlines . Colga n Air' s tota l revenu e an dtota l operatin g incom e ar e availabl e i n Pinnacl e Airline s Corp . ' s For m10-Kfile dwit h th e Securitie s an d Exchang e Commission . The tota l operatin g revenue s an d expense s fo r thes e firms ar e adde dt o create dannua l receipt s a s define dby SB

A {Cod e o f Federa l Regulations , Titl e 13 , Volum e 1 , Revise da s o f

Januar y 1 , 2003 , Par t

12 1 - Smal l Busines s Siz e Regulations , Subpar t

A - Siz e Eligibility Provision s an dStandards , Provision s o f Genera l Applicability) .

^ ^ N/ A indicate s no t

available : man y smal l carrier s ar e privatel y owne d an d ar e no t require d to repor t

revenue s t o th e SEC . SB A doe s no t

collec t dat ao n smal l carrier s a s define d b y USDO T unles s the y als o happe n t o fit th e SB A definitio n for

smal l carriers . H J R I Decisio n Economic s Pag e • 8 7Annualize dcost s pe r fir ma s apercen t

o f tota l receipt s ar e presente di n th e table s below . Annua l cost s for eac h componen t

ar e 0.09 % o r

les s o f receipt s for

smal l carriers. Tabl e 40 : Annualize d cost s a s a percen t o f annua l receipt s pe i Smal l Carrier s Ai rTranspor

t Internationa l Amerista rAi rCarg o Cap e Ai r Chautauqu a Airline s inc . Colga n Ai r Commutai rAk

a Champiai n Enterprises , Inc . Er a Aviatio n ExpressJe

t Airiine s Inc . islan d Ai rHawai i Piedmon t Airline s Tran s State s Airline s •fir m

0.006 % 0.02 % n/ a n/ a 0.09 % n/ a n/ a 0.05 % n/ a n/ a 0.05 % Reportin g an dRecordkeepin g Componen t

1 o f thi s Fina l Rul e wil l requir e smal l carrier s t o develo p an dpos t acontingenc y pla n for lon g on-boar ddelay s an dretai n dat afor tw o year s o n delay s tha t a ) trigge r

th e plan , o r b ) ar e four

hour s o r longer , a s wel l a s th e action s tha t th e carrie r

too k t o alleviat e discomfort . Thi s woul dresul t

i n increase drecordkeepin g for smal l carriers . Componen t

2 o f thi s Fina l Rul e woul drequir e smal l carrier s t o provid e informatio n o n thei r websit e an do n e-ticket s (an da t th e gat e upo n request) o n ho w t o fil e acomplaint . Smal l carrier s woul dhav e t o prepar e asubstantiv e respons e t o complaints , i.e . on e that addres s th e natur e o f

th e complain t (bu t not necessaril y resolv e it) , withi n 6 0 days . Thi s requiremen t ma y resul t

i n increase drecordkeepin g fo r smal l carriers . Componen t

5 o f thi s Fina l Rul e woul drequir e smal l carrier s t o adop t acustome r

servic e an dt o self-audi t adherenc e t o th e plan . Alternative s DO T believe s tha t

potentia l cost s t o smal l carrier s ar e no t significant , an dnote s tha t mos t passenger s fl y with larg e carriers , DO T considere daltemative s t o exemp t smal l carrier s fro mth e Rule , Altemative s 3 include donl y carrier s tha t operat e servic e wit

h a t leas t on e aircraf

t o f 6 0 o r mor e seats , an dthus , n o smal l carriers , Altemativ e 5 include dtrave l agencies , requirin g tha t thos e wit h a n onlin e ticketin g engin e t o pos t delay dat afor

reportin g carriers .

H Z RI Decisio n Economic s Pag e • 8 8

# Appendi x A . Dat a Source s

Ther e i s alac k

o f dat aconcemin g severa l o f th e variable s use di n thi s analysis . Therefore , th e assumption s an destimate s i n part s o f thi s RI A ar e calculate di n an environmen t o f uncertainty . Th e ke y assumption s that driv e th e cos t

an dbenefi t

analyse s ar e describe di n detai l i n th e regulator y evaluatio n an dsummarize di n th e chapter s o n Cost s an dBenefit s an dDat aan dthi s appendix , , Cos t o f Postin g aContingenc y Pla n Dealin g wit h Fligh t Delay s o n a n Airliner s Websit e Variabl e Description : Thi s i s th e cos t of postin g acontingenc y pla n dealin g with fligh t delay s o n an airlin e website . Source : Estimat e provide db y subjec t matte r expert s amon g HD RI T staf f compare dagains t figure s provide db y reportin g carrier s t o modif y compute r

system s t o provid e additiona l reportin g dat at o BT S regardin g cancellations , diversion s an dgat e retums , a s reporte di n Regulatory Evaluatio n o n Revisio n o r Airlin e Servic e Qualit y Performanc e Reports , U S Departmen t

o f Transportation , Docke t

N o OS T 2007-2852 2 for reasonableness . Tabl e A-1 . Cos t o f Postin g a Contingenc y Pla n Dealin g wit h Fligh t Delay s o n a n Airline' s Websit e

|@p|l^genc y Pla n Dealin g wit h Fligh t Delay s o n a n Airline' s Websit e Regulatory Evaluatio n o n Revisio n o f Airlin e Servic e Qualit y Performanc e Reports * Lowe rIC o Limi t $10,00 0 Media n

$22,500 * Uppe riq°bjjmi t $30,00 0 Subjec t Matte rExpert $15,00 0 $22,50 0 $30,00 0 I n Use $15,00 0 $22,50 0 $30,00 0 'Media n estimate d base d upo n hig h an d low . Breakou t o f U.S . Carrie r

Airframe s b y Passenge r Carryin g Capacit y Variabl e Description : Thi s i s th e percen t o f airframe s o f

U.S . carrier s classifie da s large , mediu man dsmall . Larg e aircraf t ar e define dabl e t o transport 20 0 o r mor e passengers ; mediu m betwee n 6 0 an d20 0 passengers ; an dsmal l 6 0 o r fewer passengers . Thi s wa s calculate dfo r airframe s operate db y U.S , carrier s i n 2001 , th e lates t yea r for whic h dat awer e available . Source : Departmen t

o f Transportation , Bureau o f Transportatio n Statistics , For m4 1 Schedul e B-43 . Dat afor

airframe s operate db y U.S , carrier s i n 2001 , lates t year for whic h dat aavailable . Tabl e A-2 . Breakou t o f U.S . Carrie rAirframe s b y Passenge rCarryin g Capacit y lii^mflli^k^light s an d Passenge rDeparture s fo rAirline s Reportin g Taxiin g Time s Aircraf t Typ » Larg e ( > 20 0 Passengers ) Mediu m (60-20 0 Passengers ) Smal l ( < 60 ) Percentag e o f U.S . Carrie rAirframe s 7.2 % 67.3 % 25.4 % Source : Departmen t o

f Transportation , Burea u o f Transportatio n Statistics , For m 4 1 Schedul e B-43 .
H I R I Decisio n Economic s Pag e • 8 9Cos t

o f a n Averag e Airlin e Mea l Variabl e Description : Thi s i s th e averag e nationa l cos t o f a n airlin e mea l pe r

passenge r

i n th e U.S . i n 2007 . Dat aSources : Kare n Aho , "Th e Deat h o f th e Airlin e Meal, " MS N Money , Feb . 22 , 2008 , Tabl e A-3 . Cos t

o f a n Averag e Airline lUlea

l pe r Passenge r

(200 9 Dollars ) tISMftpiii t o f a n Averag e Airlin e Misa f Pe rPassenge r(200

9 Dollars ) Lowe r10 % Limi t Media n Uppe r10 % Lim n Cos t o f Averag e Airlin e Mea l Pe rPassenge r$2.6 5 $3.7 1 $4.7 7 Source : Kare n Aho , "Th e Deat h o f th e Airlin e Meal, " MS N Mone y (httD://articles.monevcentral.msn.com/SavinaandDebt/TravelForLess/TheDeathOfTheAirlineMeal.aspx ) Update d wit h th e Congressiona l Budge t Office (CBO ) 200 9 Inflatio n Forecast , 0.1% . Fue l Cost s (pe r

minute ) o f

Taxiin g b y Aircraf

t Siz e Variabl e Description : Cos t o f fuel (pe r minute ) o f

taxiin g b y four

size s o f aircraf t — large , medium , small , an dvery smal l ~ ar e provide di n th e tabl e below . Th e type s o f aircraf t use da s proxie s for

eac h siz e category , numbe r o f passengers , fue

l consumptio n an dfue l consumption s cost s can b e foun di n th e table . Immediatel y followin g th e tabl e i s anothe r with range s for

taxiin g cost s pe r minut e for

eac h aircraft . It

shoul db e note dthat , a s ther e ar e man y variation s o f different type s o f aircraf t (ther e ar e ove r

si x widel y use dmodel s o f th e 74 7 alone , for

example) , estimate s ar e base do n unweighte daverage s o f eac h particular

typ e o f aircraft . Fo r

example , average s for

th e 74 7 wer e basedo n unweighte daverage s of th e different

model s o f

74 7 commonl y i n use . Wit h respec t

t o ranges , th e lowe r

10 % boun di s assume dt o b e 33 % les s tha n th e media n an dth e uppe r 10 % higher . Ther e ar e tw o reason s for thi s asymmetri c assumption . On e i s tha t i t i s assume dtha t

aviatio n fue l price s ar e a t historica l high s fro mwhic h the y ar e mor e likel y t o declin e tha n increas e ove r th e nex t 2 0 years . Th e secon dreaso n i s tha t aircraf t ar e assume dt o becom e mor e fue l efficient ove r time , increasin g th e probabilit y that fue l price s wil l fal l a s oppose dt o ris e (al l othe r

thing s bein g equal) . Dat aSources : Th e type s o f aurcraf t chose n a s proxie s for

eac h siz e category wer e chose n base d o n ho w commonl y the y wer e owne db y U.S , carriers . Thi s wa s define da s th e percentag e o f U.S . carrie r airframe s the y composed , i n 2001 , th e lates t yea r for whic h airfram e dat awer e available . Th e 747 , Airbu s A32 0 an dSaab-Fairchil d340/ B wer e th e mos t

widel y use daircraf

t i n term s o f airframe s for

eac h particular

clas s (i.e. , large , mediu man dsmal l aircraft) . Airfram e utilizatio n b y U.S . carrier s wa s foun di n BTS , For m4 1 Schedul e B-43 , Fue l consumptio n dat afor 747 s an d A320 s wer e foun di n Universit y o f Westminster , "Evaluatin g th e Tm e Cos t o f Airline s o f

On e Minut e o f Airbom e o r

Groun dDelay, " Ma y 2004 , Fo r th e smalle r

aircraf t fue l consumptio n wa s extrapolate dfro mdat afor thes e aircraf

t base do n full y loade dweigh t o f aircraft . Fo r

example , a s th e Fairchil dF-2 7 weighe dabou t two-third s o f

th e weigh t

o f a n A320 , i t

wa s estimate dtha t

i t use dtwo-third s th e amoun t o f fuel taxiin g tha t

th e A 3 2 0 used .
H X l I Decisio n Econoniic s Pag e • 9 0

### Jet

fue l price s ar

e as o f Ma y 16 , 2008 , fro

mthe Intemationa

l Ai r Transportatio n Associatio n (www.iata,org/whatwedo/economics/fuel_monitor/index,htm) . All othe r dat awer e fro mavariet y o f othe r sources , suc

h a s aircraf t manufacture

r websites . Tabl e A-4 . Fue l Cos t o f Taxiin g Pe rIVIinute (200 9 Dollars ) b y Aircraf t Typ e n i l p Fue l Cos t o f Taxiin g pe rMinut e (200 9 Dollars ) tfartabni^ Larg e Aircraf

t Fue l Costs (pe rMinute ) Mediu m Aircraf

t Fue l Cost

s (pe rMinute ) Smal l Aircraf

t Fue l Cost

s (pe rMinute ) Ver y Smal l Aircraf

t Fue l Costs (pe rMinute ) Lowe r10 % Limi t $26.1 6 $6.0 3 $4.0 3 $1.1 7 Media n

$38.7 4 $9.0 4 $6.0 5 $1.7 5 Uppe r10 % Limi t

$42.6 1 $9.9 4 $6.6 5 $1.9 3 Source : Calculate d fro m dat a I n U.S . Burea u o f Transportation , For m 4 1 Schedul e B-4 3 (aircraf t frames) ; Universit y o f Westminster , "Evaluatin g th e Tru e Cos t o f Airlines o f On e Minut e o f Airborn e o rGroun d Delay, " Ma y 200 4 (fue l consumption) : Internationa l Ai rTransportatio n Associatio n (www.iata.org/whatwedo/economlcs/fueLmonitor/index.htm ) (fue l costs) ; Airplan e manufacturers ' websites .

HZ R I Decision Economic

s Pag e • 9 1a S

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### a 

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### s I

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# I

### Averag e Tax i Tim e fo r Aircraf t a t U.S . Airport s Variabl e Description : Thes e estimate s represen t the averag e time , i

n minutes , tha

t a n aircraf t a t U,S , airport s spend s actively taxiing , basedon areview o f taxi-out time s i n th e BT S on-tim e performanc e database . I

n 2007 , th e mos t

commo n amoun t o f tota l tax i tim e (fro mgat e to wheel s off

) was 1 0 minutes , s o thi s figur e was usedfo

r the median . Lo

w an dhigh estimate s wer

e drawn fro

mth e frequenc

y o f tota l tax i in o r ou t tim e minute s an

d represen t th e 2"' ' an

d69 * percentile s o

f tota l taxi times . The hig

h estimat e choic e incorporate s th e fac

t tha t tota l tax i tim e include s tim

e spen t waiting on th e tarmac . Dat aSources : The sourc e o f th e mea n wa s apresentatio n entitle d"Short-Haul Transportatio n t

o an dFro mNe w York : Th

e Effec t o f Airpor t Congestion o

n Mod e o f Choice, " L&B , Presenteda t th e FA A Forecas t

Conference , Marc

h 11 , 2008 . Rang e was basedo n HD

Rsubject matte r experts . Tabl e A-6 . Averag e Tax i Tim e fo rAircraf t a t U.S . Airport s (IVIinutes ) i n 200 7

Averag e Tax i Tim e fo rAircraf t a t U.S . Airport s (IMInutes ) I n 200 7 Variabl e Lowe r10*^ Limi t ' IMedla n Averag e Tax i Tim e 5 1 0 Upper10 % Limi t 1 8 Source : Burea u o f Transportatio n Statistic s On-Tim e Performanc e database . 

### Cockpi t Cre w pe r Aircraf t Typ e Variabl e Description : Averag e cockpit cre w pe r aircraf t type . Basedo

n the variet

y o f sub-type s o

f aircraf t (e.g. , ther

e ar e six commonl

y usedversion s o

f th e 747) , cre

w members fo

r som e type s o f aircraf t ar e base do n unweightedaverage s o

f thes e versions . Dat aSources : Variet

y o f airline manufacture

r websites . Tabl e A-7 . Average Cockpi

t Crew s pe r Typ e o f Aircraf t ^ •''"'.' ; '^il i Averag e Cockpi t Crew s pe rT ^ :^rtiibfci;;.'f| | Averag e Cockpi t Cre w fo r"Large " Aircraf t (747 ) Averag e Cockpi t Cre w fo r"Medium " Aircraf t (A320 ) Averag e Cockpi t Cre w fo r"Small " Aircraf t (Fairchil d F-27 ) Averag e Cockpi t Cre w fo r'Tiny " Aircraf t (Saab-Fairchil d 340/B ) Lowe r10 % Limi t 2 2 2 2 /p e O

f Aircraft ^t^l^ B Media n 2 2 2 2 Uppe r10 % Umi t

2 2 2 2 Note : 74 7 I s fo r747-40 0 an d 747- 8 models ; Source : Variou s Aircraf t Manufacture rwebsites .

### Cockpi t

Cre w Cost s Pe r

Hou r Variabl e Description : Averag e cockpi t cre w wage s pe

r minut e in th e UnitedStates , Nationa l averag e hourly wage s in 200 6 fo r airline pilots , copilot s an

dengineers wer

e $67,49 . I n 2002 , fringe benefit s pai db y nationa l airline s i

n th e UnitedStates , fo

r all airline employees , wer

e 35 % o f wages . Using thi s mark-up , labo r cost s com

e t o $91.1 1 pe r hour . Cockpi

t crew s o f all type s o

f aircraf t ar e assumedt

o hav e thi s sam

e cos t as dat a furthe r differentiating wage s an

dcost s ar e not availabl e on a

n airfram e basis . Th

e rang e aroun dthi s figur

e i s assumedt

o b e 25 % aroun

dthe median . I

t assume s tha

t ther e i s a wid e varianc e i

n wage s depending on cre

w employer , fligh

t route s flow

n an dtype s o f aircraf t being crewed . Dat aSources : Standardize dOccupationa l Component s fo

r Research an

dAnalysi s o

f Trend s i n Employmen

t System , a s maintainedb y th e Texa s Workforc e Commission ; benefits fo

r nationa l airline s wer

e calculate dbase don dat

afro mAviation Specialist s Group , Inc. , Economic Value s fo r FA A Investmen

t an dRegulator

y Decisions , A Guide , Contract No , DFT A 01-02-C00200 , p , 4-4 . Thi s repor t was preparedfo

r th e Federa

l Aviation Administration' s Offic e o f Aviatio n Polic y an

dPlans , U.S , Federa

l Aviatio n Administration , Tabl e A-8 . Averag e Cockpi t Cre w Wage s an d Fring e Benefit s (pe rhour , 200 9 dollars ) i^Slil i Averag e Cockpi t Cre w Wage s (pe rhour , 200 8 dollars ) Lowe r10% Limi t Media n Averag e Cockpi t Cre w Cos t (pe rhour ) $51.3 8 $68.5 0 $85.63 Source : Standardize d Occupationa l Component s fo rResearc h an d Analysi s o f Trend s i n Employment System , a s maintaine d b

y th e Texa

s Workforc

e Commission , estimate d fro m Occupationa l Employmen t an d Wages (OES) program . Burea u o f (.abo rStatistics . 

### Numbe r o f Fligh t Attendant s b y Aircraf

t Typ e Variabl e Description : Averag e numbe r o f non-cockpit

crew members . Thes e ar e predominantly , i

f no t entirely , fligh

t attendants . Dat aSources : Variou s aircraf t manufacture

r websites .Tabl e A-9 . Averag e Numbe ro f Fligh t Attendant s pe rAircraf t Typ e Averag e Numbe ro f Fligh t Afiiiaht a pe rAircraf t TVpft ^ y^ \ Variabl e \ ^ Averag e Fligh t Attendan t Cre w fo r"Large " Aircraf t (747 ) Averag e Fligh t Attendan t Cre w fo r"IVIedium " Aircraf t (A320 ) Averag e Fligh t Attendan t Cre w fo r"Small " Aircraf t (Fairchil d F-27 ) Averag e Fligh t Attendan t Cre w fo r"Tiny " Aircraf t (Saab-Fairchil d 340/B ) Lowerl6 % Limi t 9 4 1 1 Medterr' ^

1 2 5 1 1 Uppe r

10 % Limi t 1 4 6 1 1 Note : Informatio n fo rFairchil d F-2 7 FH-227 E variant ; Dat a fo rA32 0 an d 74 7 base d o n unweighte d averag e o f commonl y use d variant s o f A32 0 an d 747 . Source : Variou s Aircraf t Manufacture rwebsites . Fligh t Attendan t

Cost s pe r

Hou r Variabl e Description : Averag e fligh t attendan t

cost s i n th e Unite dState s pe r hour . Researc h prepare db y th e Associatio n o f Fligh t Attendant s (AFA ) o n hourl y wage s for si x airline s with AFA member s foun dtha t hourl y wage s range dfro m$20,0 0 pe r hou r t o $41,6 5 for

unio n attendants , (Th e Rul e wil l affec t al l carrier s for

Componen t

1 an donl y th e larges t

carrier s - an dthu s thos e likel y t o hav e th e highes t wage s - for

Component s 3 an d4) , I n 2002 , fring e benefit s pai db y nationa l airline s i n th e Unite dStates, , for al l airlin e employees, wer e 35 % o f wages . Usin g thi s mark-up , media n labo r cost s com e t o $41,6 1 pe r

attendan t pe r hour . Fligh t

crew s for

al l type s o f

aircraf t ar e assume dt o hav e thi s sam e cost , a s dat afurther differentiatin g wage s an dcost s are not availabl e o n a

n airfram e basis . Th e rang e aroim dthi s figur e i s assume dt o b e 25 % aroun dth e median . I t assume s tha t

ther e i s wid e varianc e i n wage s dependin g o n cre w employer , flight route s an dtype s o f

aircraf t bein g crewed . Dat aSources : ''Compas s Fligh t Attendan t

Hourl y Wag e Compariso n w / AF A Represente dCarriers, " Associatio n o f Fligh t Attendants ; Benefit s for nationa l airline s wer e calculate dbase do n dat afromAviatio n Specialist s Group , Inc , Economi c Value s fo r FA A Investmen t

an dRegulator y Decisions , A Guide , Contrac t No . DFT A 01-02 - C00200 , p . 4-4 . Thi s repor t wa s prepare dfor

th e Federa l Aviation s Administration' s Offic e o f Aviatio n Polic y an dPlans , U.S . Federa l Aviatio n Administration , Tabl e A-10 . Averag e Fligh t Attendan t Cre w Wage s (pe rhour , 200 9 dollars )

Averag e Fligh t Attendan t Cre w Wage a (pe| : 

### viiitiP ; Averag e Fligh t Attendan t Cre w Cos t (pe rhour ) Lowe r10 % Limi t $27.4 1 Medlan^PI,...^, ,

$42.2 3 pppe r10 % Limi t $57.0 6 Source : Burea u o f Labo rStatistics , Departmen t o f Labor , Ma y 200 7 Nationa l Occupationa l Employmen t an d Wag e Estimates .Cos t

o f Deplanin g Passenger s (pe r Passenger ) Variabl e Description : Thi s i s th e cos t o f deplanin g passenger s o n ape r passenge r

basis . Th e cos t i s what a n airport woul dcharg e airline s t o deplan e passengers . Thi s i s assume d t o b e $1.3 7 pe r

passenge r

(i n 200 8 dollars) . Thi s i s th e fe e tha t Atlant aIntemationa l Airport charge dairline s t o deplan e passengers . Source : Pau l Meyer , Operation s Department , Atlant aIntemationa l Airport , Percentag e o f

Additiona l Flight s Cancele dafte r aThree-Hou r

Dela y Du e t o Rul e Variabl e Description : Thi s i s th e increas e i n percentag e o f flight s tha t

ar e cancele dafte

r sittin g o n th e tarma c for

thre e o r mor e hour s du e t o implementatio n o f th e Rule , It

i s assume dt o b e betwee n 0 % an d5% , with amedia n o f 2,5% , Th e hig h en di s fro mastud y whic h foun dtha t

increase s o f

a n hou r i n th e amoun t

o f tim e a n airpor t i s close dfor security reason s lead s t o an additiona l 5,9 % cancelle dflights . Th e sam e stud y als o foun d tha t cancellation s ar e mor e likel y at th e beginnin g o f

aclosur e tha n near

th e end . Thus , 5 % wa s chose n a s a

n uppe r boun dfor

cancellation s du e t o taxiin g bac k t o th e gate . Source : Nichola s Rupp , Georg e Holme s an dJef f DeSimone , "Airlin e Schedul e Recover y Afte r Airport Closures : Empirica l Evidenc e sinc e Septembe r 11th, " Organizagoe s e

m Contexto , Decembe r

2007 , for estimat e o f

increas e i n cancellatio n du e t o additiona l hou r o f airport closur e for

securit y reasons . Tabl e A-11 . Percentag e o f Additiona l Flight s Cancele d afte ra Thre e Hou rDela y

. iii.ii . Liifi. p •>

• „ I , wiin.n.fy.Bn . iM i ui u • T•^n5^*'Wj^;5^Bg;;'•^^!M^^?l'-M!ggmBPB^'^^^,'!'.?^!R^m!Ml^^^ ^ •','j''M^M^^:J^.^':^-•J,'H^,•rl'v•g•M>^^'•y'^^•~'T-'.*M^^^'''^'•^*J ' i^welliO^ymi t »^Sft^^ v 

### iNtt." ' .A ! If ' 0 % 2.5 % 5 % Source : Nichola s Rupp , Georg e Holme s an d Jef f DeSimone , "Airlin e Schedul e Recover y Afte rAirpor t Closures : Empirica l Evidenc e sinc e Septembe r11th, " Organizagoe s e m Contexto , Decembe r2007 , fo r estimat e o f increas e i n cancellatio n du e t o additiona l hou ro f airport closur e fo rsecurit y reasons . Averag e Cos t

t o a n Ai r

Carrie r o f aFligh t Cancellatio n Variabl e Description : Thi s i s th e cos t t o airlines , of

afligh t cancellation . I n 199 8 thi s valu e wa s estimate dat

$11,600."^

^ h i 200 8 dollar s thi s figure become s $14,818 , Source : Zalma n Shavell , "Th e Effect s o f Schedul e Disruption s o n th e Economic s o f Airlin e Operations, " Th e MITR E Corporation , Apri l 14 , 2000 . Averag e Dela y fo r

Passenger s fro maFligh t Cancellatio n Variabl e Description : Thi s estimate s th e amoun t o f additiona l tri p delay tim e t o a passenge r du e t o th e cancellatio n o f thei r flight . Thi s averag e dela y wa s 51 9 minute s i n 200 4 an d54 9 minute s i n 2005 . Multiplie db y th e valu e o f time , thi s variabl e give s u s th e cos t t o th e passenge r

o f th e additiona l delay .
^ * Zalma n Shavell , "Th

e Effect s o f Schedule Disruption s o

n the Economic s o

f Airline Operations, " The MITR E Corporation , April 14 , 2000 .

### Source : Danyi Wan g an dLanc e Sherry , "TrendAnalysi s o f Airline Passenge

r Tri p Delays, " preparedfo

r th e Transportatio n Research Boar d200 7 Annua l Meeting . Numbe r o f Fligh t an dPassenge r

Departure s fo r

Airline s Reportin g Taxiin g Time s Variabl e Description : Thes e ar e the numbe

r o f flights an

dth e numbe

r o f departing passenger s fo

r all airline s reportin g taxiin g i n an dtaxiin g ou

t time s i n 2007 . Ther

e wer e 2 1 suc h airlines,^ ^ I t shouldb e notedtha

t thes e airline s accoun

t fo r th e vas t majorit y o f th e passenge

r traffic i n th e Unite dStates , Tota l departure s o

f all passenger s o n al l air carrier s (U,S , a

s well a s foreign) wer

e 69 7 million , therefor

e the reportin g airline s accountedfo

r approximatel

y 88 % o f passenge r traffic . Source : T-lO

O Domesti c Segmen

t (U.S . carriers ) tabl e o

f th e Ai r Carrie r Statistic s (For

m 4 1 Traffic ) - U.S . Carrier s Database , BTS , Researc h an dIrmovativ

e Technology Administration , U.S , Departmen t o f Transportation . http://www.transtats.bts,gov / Tabl e A-12 . Numbe ro f Flight s an d Passenge rDeparture s fo rAirline s Reportin g Taxiin g Time s Numbe ro f Flight s an d Passenge rDeparture s fo rAirline s Reportin g Taxiin g Time s Numbe ro f Flight s Numbe ro f Passenger s 7,360,98 4 621,728,44 0 Source : Burea u o f Transportatio n Statistic s 

### Tota l Passenge r

Boardin g b y Airpor t

Siz e Variabl e Description : Thi s i s th e numbe r o f passenger s boardin g a

t U,S , airports . Tota

l passenger s ar

e defineda s bot

h U.S . citizen s an

dnon-U.S . citizen s boarding o n all flight s (o n U.S . an dnon-U.S . carriers ) in calenda r yea r 2006 . Th e definition s o

f th e variou s airpor t categorie s (i.e. , larg e hubs , mediu mhubs , etc. ) ar

e thos e o f th e Federa

l Aviatio n Administration , a

s presente din the 200 6 Ai

r Carrie r Activit y Information System . Source : Federa l Aviatio n Administration , 200 6 Ai rCarrie rA c Tabl e A-13 . Tota l Passenge rBoardin g b y Airpor t Classificatio n 

### f-'Cis^i^M" " - ^'\- ^''^SU) ; Larg e Hub s Mediu m Hub s Smal l Hub s Non-Hub s Al l Othe rClassification s TOTA L 

### f^ii»dial»i«^«di^(l*#- ' 511. 1 145. 8 59. 1 21. 6 0. 8 738. 4 tivit y Informatio n System . [millions ) i n 200 6 69.2 % 20.0 % 8.0 % 2.9 % 0.1 % 100 % Note : Du e t o roundin g percentage s su m t o 100.2% . Source : Calculate d fro m dat a availabl e i n th e Federa l Aviatio n Administration' s 200 6 Ai rCarrie rActivit y Th e 2 1 airline s were : Pinnacl e Airlines , AirTra n Airways , Alask aAirways , Aloh aAirlines , America n Airlines , America n Eagl e Airlines , Atlanti c Southeas t Airlines , Comai r

Inc. , Continenta l Ai r

Line s Inc. , Delt aAi r Airlines , ExpressJe t

Airlines , Frontie r

Airlines , Hawaiia n Airlines , JetBlu e Airlines , Mes a Airlines. , Northwes t

Airlines , SkyWes t

Airlines , Southwes t

Airlines , Unite dAi r

an dU.S . Airways .Informatio n System .

Tota l Passenge r

Boardin g b y Airpor t

Siz e Variabl e Description : Thi s i s th e numbe r o f passenger s boardin g a

t U.S . airports . Tota l passenger s ar e define da s both U.S . citizen s an dnon - U.S . citizen s boardin g o n al l flight s (o n U.S . an dnon-U.S . carriers ) i n calendar yea r 2006 . Th e definition s o f th e variou s airport categorie s (i.e. , larg e hubs , mediu mhubs , etc. ) ar e thos e o f th e Federa l Aviatio n Administration , a s presente di n th e 200 6 Ai r Carrie r Activity Informatio n System . Source : Federa l Aviatio n Administration , 200 6 Ai r Carrie r Activit y Informatio n System . Tabl e A-14 . Tota l Passen(pe rBoardin g b y Airpor t Classificatio n 

### e^mm't' " • .:*:,r^'Kb : Larg e Hub s Mediu m Hub s Smal l Hub s Non-Hub s Al l Othe rClassification s TOTA L i.N*ji«ti«et^r<lW^.(Mll^^ ' 511. 1 145. 8 59. 1 21. 6 0, 8 738. 4 millions ) i n 200 6



## mt^mim'mmuv£.:"t

^ 69.2 % 20.0 % 8.0 % 2.9 % 0.1 % 100 % Note : Du e t o roundin g percentage s su m t o 100.2% . Source : Calculate d fro m data availabl e i n th e Federa l Aviatio n Administration' s 200 6 Ai rCarrie rActivity Informatio n System . Forecas t Averag e Growt h o f

Airlin e Passenge r

Traffi c (pe r

Year ) o n U.S . Airline s Variabl e Description : Thi s i s th e estimate daimual growth i n au-line passenge r traffi c (define da s payin g passengers ) transporte db y U.S . carrier s o n both domesti c an d intemationa l trip s fro man dt o airport s i n th e U.S . forecas t fo r th e future . It

i s base do n th e annua l growth rate s (pe r year ) fro m196 8 throug h 200 6 (inclusively) . Th e choic e o f 196 8 a s th e firs t

yea r wa s base dupo n th e fac t tha t th e databas e bein g use ddi dno t hav e consistentl y measure dnumber s befor e 1968 , Th e rang e aroun dth e media n wa s base do n th e distributio n of

th e actua l data . Thi s rang e i s very larg e a s ther e hav e bee n very larg e fluctuations i n passenge r

traffi c ove r

thi s period . Source : U S DO T 200 7 FA A Aerospac e Forecas t Fisca l Year s 200 7 - 2020 , availabl e at : http://www,faa,gov/data_statistics/aviation/aerospace_forecasts/2007-2020 / Tabl e A-15 . Forecas t Growt h o f Airlin e Passenge rTraffic(pe rYear ) o n U.S . Airline s fc,owtbt^t^tJ«»H 

### ^yplMcm M 1.04 % 2.67 % 2.96 % Note : Ranges estimate d fro m actua l data distributio n Travele rValue s o f Tim e (Dollar s pe rHour ) Variabl e Description : Thi s i s th e value , t o travelers , o f tim e for personal , busines s an d al l purpose s i n dollar s pe r hour . Th e values , a s recommende db y DOT , ar e see n i n th e nex t table . The y ar e i n 200 3 dollar terms .

### Source : U.S , Departmen t o f Transportation , "Revise dDepartmen t Guidance : Valuatio n o f Travel Tim

e in Economi c Analysis, " 2003 , table s 4 an d5 , Als o in "Economi c Value s fo r FA A Investmen

t an d Regulator

y Decisions : A Guide, " FA A Offic e o f Aviatio n Policy an dPlans , Decembe

r 31,2004 . Tabl e A-16 . Departmen t o f Transportatio n Determine d Value s o f Tim e fo rAi rPassenger s fo rus e i n Trave l Tim e Savin ; I S Calculation s Persona l $20.0 0 e rHour ) $23.3 0 

### .iiiPi»'W<^! i

$30.0 0 Busines s $32.1 0 $40.1 0 $48.1 0 Al l Purpose s $23.8 0 $28.6 0 $35.60 Source : U.S . Departmen t o f Transportation , "Revise d Departmen t Guidance : Valuatio n o f Trave l Tim e i n Economi c Analysis, " 2003 , table s 4 an d 5 . Als o i n "Economi c Value s fo rFA A Investmen t an d Regulator y Decisions : A Guide, " FA

A Office o f Aviatio n Polic

y an d Plans , Decembe r31 , 2004 . NB : Accordin g t o DO

T guidance , thes e number s ar e no t t o b e adjuste d fo rinflatio n unti l don e so b y th e Department . 

### Valu e o f Tim e Premium s Forecas t Averag e Growth o

f Airlin e Passenge r

Traffi c (pe r Year ) o n U.S . Airline s Variabl e Description : Severa l aspect s o f the Fina l Rule will shif

t the portio n o

f tota l tri p tim e spen t in les s comfortable condition s (such as the fift h hou r on aplane waiting o n th e tarmac ) to tim

e spen t i n mor e comfortable condition s (the fift h hou r spen t in the terminal) . Th

e valu e o f th e differenc e i

n comfor t i s estimatedusing th e bas e valu e o f travel tim e saved(a s note dabove) an dapplying apremiu

mt o tha t time . Estimate s fo

r thi s "comfor t premium " wer

e developedfro

meconomic literatur

e on transportation . Premium s hav e bee

n derivedfro

msurvey-baseddat

atha t reflect travel tim e value s whic

h incorporat e th e qualit

y waiting , walking an

dtransfe r conditions . Leve

l o f servic e rating s wer e rider-determine dan

d ar e usedto determine the valu e o f differen t levels . The value s usedca

n b e see n i n th e tabl e below . Source : Level o

f servic e estimate s o

f valu e o f travel tim e fro mTod dLitman , "Valuin g Transit Servic e Qualit

y Improvements, " th e Victori aTranspor t Policy Institute , 2007 .

' ^ A s specifie d b y Th e Departmen

t o f Transportation i

n the "Revised Guidance, " thes e figure s have not bee n update d fo r inflation . See als o "Economic Value s fo r FRA A Investmen

t an d Regulator

y Decisions : A Guide, " GR

A fo r th e Departmen

t o f Transportation , Decembe r 21,2004 .Tabl e A-17 . Valu e o f Tim e Premium s fo rDifferin g Qualitativ e Level s o f Servic e



### ^crategory,^" : .'..*" . ^,'>'** \

w'' . ' ''::.l-' " ^'vi^? l :»-*;•'ill ; i Adul t transi t passenge r- seate d Adul t transi t passenge r- standin g E0SA< C ! 35 % 50 % Note : LOS refer

s t o ievel-of-service an d incorporate s qualitative factor s suc h as comfort , convenience an d reliabilit y fo rvariou s n food , wate ran d clea n lavator y facilities . Th e difference i n th e valu e o f tim e betwee n th e averag e fo rLO S ratin g A- C an d LOS ra t Source : Leve l o

f service estimate s o

f valu e o f trave l tim e fro m Tod d Litman , "Valuin g Transi t Service Qualit y Improvements, " th e 

### Ris k Rang e fo r

Valu e o f Tim e Premium s Variabl e Description : To accoun t fo r the uncertaint

y o f th e exact value s o f the premium s on th e value s o : Tabl e A-18 . Risi c Range s fo rValu e o f Tim e Premium s Valu e o f Tim e Premiu m fo rhavin g acces s o f foo d an d wate ro n plan e Valu e o f Tim e Premiu m fo rgreate rcomfor t o f waitin g i n th e termina l Valu e o f Tim e Premiu m fo rdecrease d anxiet y 

### Valu e o f Time fo r Meeters-and-Greeter s (Dollar s pe r Hour ) Variabl e Description : Thi s i s th e valu e o f tim e fo r meeter s an

dgreeters . Th

e U.S . Departmen

t o f Transportatio n recommendedvalu e o f tim e fo r loca l persona l travel i s used . Source : U.S . Departmen

t o f Transportation , "RevisedDepartmenta l Guidanc e Valuation o f Travel Tim

e i n Economi c Analysis, " 2003 , Tabl e A-19 . Valu e o f Tim e fo rlUleeters-and-Greeter s (pe rhour ) Valu e o f Tim e fo riVIeeters-and-Greeter s Variabl e Valu e o f Tim e fo rMeeters-and Greeter s - on e hal f averag e hourl y wag e (pe rhour ) Lowe r10° o Limi t $7.4 0 Media n

$10.6 0 Uppe r10 % Limi t

$12.7 0 Source : Burea u o

f Labo rStatistics . 

### Averag e Commutin g Time s t o an dFro mAirport s

^ ' Thes e premium s ar e simila r t o premium s estimate dfo r th e valu e o f

sittin g instea do f

standin g durin g a transi t trip , whic h hav e range dfrom20 % t o 50% . Se e Marcu s vo n Wartbur g an dW.G . Water s II , "Chapte r 2 : Congestio n Externalitie s an dth e Valu e o f Trave l Tim e Savings, " i n Toward s Estimatin g th e Socia l an d Environmenta l Cost s o f

Transportatio n i n Canada , Anmin g Khang , e t a l eds. . Cente r

for Transportatio n Studies , University o f

Britis h Columbia , Augus t 200 4 an dP.B . Goodwin , "Huma n Effor t an dth e Valu e o f Trave l Time, " Journa l o f Transpor t

Economic s an dPolicy , January 1976 .

### Variabl e Description : Thi s i s th e averag e tim e i t take s a n individua

l to travel fro

mth e airpor t to th e Hilton Hote

l locate dcloses t

to th e airpor

t or i n th e closes t

downtown metropolita

n are a- fo

r example , the tim

e i t woul dtak e t o travel fro

mthe Cincinnat

i Airpor t to the downtow

n Cinciimat

i Hilton . I f aHilto n Hote

l was no t available , ahotel o

f simila r reputatio n was usedas aproxy . Thi s ter mwas calculate dby estimatin g travel tim e fro meac h clas s o f airpor t (i.e. , larg e hub , mediu

mhub , etc.) . This , i

n tum , was don

e by estimating the travel time s fo r eac h airpor t tha t composedeach category . Travel time s wer e weightedb y airline passenger s departing fro

meac h airport . Thes e figure s ca

n b e see n in th e belo w table . Averag e travel tim e fo r all airport s was als o calculated . Thi s was weightedb y passenge r departure s fro

m eac h categor y o f airport . The uppe

r an dlowe r 10 % boimdar

y range s wer

e th e actua l 10 % uppe r an dlowe r range s base don th e result s derivedfo r eac h categor y o f airport . All time s ar

e fo r "non-peak, " as define

db y GoogleMap.com' s "destination " feature . I t i s assumedtha

t travel time s to an

dfro mairport s wer

e equal . Dat aSources : Trave

l time s estimate dfro

m"directions " featur

e o f GoogleMaps.Comfo

r airports . Passenge

r departure s usedas abasi s o f weighing wer

e fro mth e Federa

l Aviatio n Administration' s Ai

r Carrie r Activit y Information System , Tabl e A-20 . Averag e Commutin g Tim e to/fro m Airport s (Minutes )

Averag e Commutin g Tim e to/fro m Airport s (Minutes ) Variabl e Larg e Hu b Airpor t Commutin g Tim e Mediu m Hu b Airport Commutin g Tim e Smal l Hu b Airpor t Commutin g Tim e Non-Hu b Airpor t Commutin g Time s Non-Primary Commercia l Servic e Airport s Al l Airport s Lowe r10 % Limi t 8.8 0 12.0 0 9.8 0 6.0 0 N/ A 7.8 0 Media n

21.0 1 19.2 9 15.4 3 12.2 7 N/ A 20.1 1 Uppe r10 %

Limi t 37.0 0 24.0 0 22.8 0 21.3 0 N/ A 39.6 0 Note : Trave l tim e require d t o trave l fro m th e airpor t t o th e neares t downtow n Hilto n i n th e closes t downtow n metropolita n are a t o airport, i f th e cit y di d no t hav e a Hilto n (fe w di d not ) th e closes t "class " o f hote l t o thi s wa s used . Source : Estimate d fro m "directions " featur e i n GoogleMaps.Com . 

### Percentag e o

f Ai r Traveler s Me t

a t Airpor t Variabl e Description : Thi s i s th e percentag e o f ai r traveler s estimatedt

o b e me t a t airports , by someone . Thi s ter mwas estimate dfro

mdat aobtaine dthrough th e Travel Surve y of Resident s o f

Canada . Thi s surve

y i s conductedb y th e Canadia n Government' s statistica l service , Statistic s Canada , Thi s office performs fimction s roughl y equivalen

t to thos e performe

db y the U.S , Censu s Bureau , According t

o th e 200 5 Trave

l Surve y o f Resident s o

f Canada , in 200

4 62.8 % o f traveler s travelin g ove

r 80 kilometer s travele dto visit friend s o r relatives . I

t i s assumedtha

t thi s sam e rati o applie s to intemationa l ai r travelers . Assumin

g tha t thi s grou p i s me t a tairport s amedia n percentag e o f 10% , alowe r

boun do f 20 % an da

n uppe r boun dof 30% , th e percentage s o f

tota l traveler s bein g me t a t airport s ca n b e see n i n th e tabl e below . Thi s assumptio n wa s necessar y i n th e absenc e o f specifi c dat aan dt o mak e th e estimatio n exercis e manageable . Source : Statistic s Canada , 200 5 Trave l Surve y o f Resident s o f

Canada , cite di n Statistic s Canada , Th e Daily , "Domesti c Travel, " Wednesday , Jun e 1 , 2005 , (http://www.statcan.ca/Daily/English/050601/d050601b,htm) , Tabl e A-21 . Percentag e o f Ai rTraveler s Me t a l t Airpor t ^ ' Percentag e o f Ai rTraveler s Me t a t Airpor t Scenari o Lowe r10 % Boun d Media n Uppe r10 % Boun d Assume d Percentag e o f

Ai rTraveler s Travelin g fo rPurpos e o f Visitin g Friend s o rRelative s 62.8 % 62.8 % 62.8 % Assume d Percentag e o f Ai r

Traveler s Travelin g Visitin g Friend s o rRelative s wh o ar e me t a t Airpor t 10 % 20 % 30 % Tota l

Percentag e o f Ai rTraveler s Me t a t Airpor t 6.3 % 12.6 % 18.8 % Cos t t o Airline s o f

Providin g Informatio n t o Traveler s o n ho w t o Fil e aComplain t o n Websit e o r

a t Check-I n Counte r

fo r Reportin g Carrier s an dNon-Reportin g Carriers ; Als o use da s prox y fo r Cos t t o Airline s o f

Implementin g aCustome r Servic e Pla n fo r

Reportin g Carrier s an dNon-Reportin g Carrier s Variabl e Description : Th e cos t o f modifyin g awebsit e for reportin g carrier s woul dbe , base do n subjec t

matte r expert opinion , betwee n $10,00 0 an d$60,00 0 (wit h $35,00 0 th e mos t likel y cos t

an da90 % probabilit y o f th e actua l numbe r

fallin g withi n th e $10,00 0 t o $60,00 0 range) . Th e cos t for reportin g carrier s t o modif y counter s t o provid e informatio n t o customer s o n ho w t o fil e complaint s i s estimate da t $6,347 . A t

OfficeDepot.com , o n May 1 , 200 8 an acryli c engrave dwal l sig n cos t $13,99 . Th e nationa l media n salary fo r abuildin g an d ground s maintenanc e employee , accordin g t o th e BL S was , $9,7 5 i n 2006 , Inflatin g thi s t o 200 8 term s (usin g nationa l Employmen t Cos t Inde x fro mth e Bureau o f Labo r Statistics ) it

become s $10,26 , Accordin g t o th e FA A "Calenda r yea r 200 6 Passenge r Activity Commercia l Servic e Airport s i n US, " ther e wer e 56 6 airport s i n th e Unite d State s tha t

handle dpassenge r

flights . I

f i t i s assume dtha t

eac h airport , o n average , require s 2 0 sign s an dtha t i t take s maintenanc e employe e on e hou r t o pu t eac h sig n up , sig n cost s woul db e $158,36 7 an dlabo r cost s $114,55 8 for

agran dtota l o f

$272,925 . I n 200 7 ther e wer e 4 3 ai r

carrier s i n th e Unite dState s with gros s revenue s o f $2 0 millio n o r higher . Dividin g tota l cost s o f $272,92 5 b y 4 3 carrier s result s i n amean airlin e cos t o f $6,347 . It i s assume dtha t

sinc e reportin g carrier s hav e muc h large r operations , o n average , tha n non-reportin g carriers , th e implementatio n cost s for non-reportin g carrier s woul db e proportionall y smaller . Website s for som e carrier s coul db e update dwith asimpl e lin k tha t woul drequir e les s tha n ada y o f an experience dcompute r programmer' s tim e (at

a

### media

n hourl y wag e i n 200 8 o f $33.47 a n hour) . The averag e cos t fo r non-reportin g carrier s i s therefor

e assumedt

o b e lowe r tha n fo r reportin g carriers , an

di s estimateda

t 11 % o f tha t fo r reportin g carriers , reflecting th e portio n o f passenger s o

n non-reportin g carrie r flights , o r $4,261 . Thi s cos t to provid e information t o customers i s als o usedas aprox y t o estimat e the cost s o f implementing acustome

r servic e pla

n fo r reportin g carrier s an

dnon-reportin g carrier s (a t th e sam e ratio s as above) . Source : Estimat

e fo r websit e modification provide dby reportin g carrier s to modif y compute r system s t o provide dat

afo r additiona l reportin g requirement s pe r Fina l Rul e o n Airline Servic e Qualit

y Performanc e Reports , (a s reporte di n Draf t Regulator y Evaluatio n o n Revisio n o

f Airline Servic e Qualit

y Performanc e Reports , U,S . Departmen t o f Transportation , Docke

t No , OS T 2007-28522 , Novembe r 2007 ) usedas aproxy ; als o use dt o a s prox y fo r cos t to implemen

t custome r servic e plan . Additional Cost s t o Provid e aRespons e t o al l Complaint s Withi n 6 0 Day s Whic h SpeciHcall y Addres s Individua l Passenge r Complaint s Variabl e Description : Thi s i s th e incrementa l cost , to airlines , o

f providing arespons e t o apassenge

r complain t within a6 0 da

y perio dfro

mwhic h th e complain

t was lodged . These s response s needno t b e resolution s to th e problem s raised , rathe r atargete d acknowledgemen

t o f the type/ptupos e o

f th e complaint . I

t i s assumedtha

t carrier s will b e able to develo

p respons e template s whic

h wil l streamline thi s process . Thi s cos t assumed t o b e th e equa

l t o th e additiona

l labo r cos t o f handlin g acomplaint , estimate da t $1.34 , whe n comparedt

o astandar

dacknowledgemen

t tha t acommimication was receive d(fo r example , th e differenc e between sending alette r tha t th e complain

t regardin g abaggag e dela y i s being examinedversu s sending astandar drespons e simpl

y thanking the custome r fo r thei r letter) . Thi s numbe

r was estimatedby findin

g th e hourly wag e o

f "Office an dAdministrativ e Suppor

t Workers " in th e Unite dState s (media n o f $13.0 8 pe r hou r i n 200 6 dollars) , inflating i

t to 200 8 dollar s ($13.60 ) an dadding benefit s o

f 35 % o f wage s ($18,10) , Assuming tha t astandard , targete drespons e to a n averag e complain

t ca n b e sen t in six additiona

l minute s yield s acos t

o f $1.8 5 pe r hour . Source : Offic

e an dAdministrativ e Suppor

t Worke r wag e dat afro mth e Burea

u o f Labo r Statistics , 200 6 Occupationa l Employmen

t Survey ; Benefits fo

r nationa l airline s wer

e calculatedbasedon dat

afro mAviatio n Specialist s Group , Inc. , Economic Value s fo r FA A Investmen

t an dRegulator

y Decisions , A Guide , Contract No , DFT A 01-02-C00200 , p , 4-4 . Thi s repor

t was preparedfo

r th e Federa

l Aviation s Administration' s Offic e o f Aviatio n Polic y an

dPlans , U.S . Federa

l Aviatio n Administration . Elasticit y o f Deman dfo r

Complainin g Variabl e Description : Thi s figur e (1.0741 ) estimate s th e chang e i n numbe r o f complaint s due t

o aunit chang e in the cos t

o f complaining . Source : DavidMorris , "The Cos t o f Complaining an

dth e Efficienc

y o f Consume r Complaint s Agencies, " Jouma l o f Consume r Studie s an

dHom e Economics , 1980 .

### Cos t

o f Complainin g Variabl e Description : Thes e ar e th e element s tha

t compris e the cos t

incurredb y th e passenge r to file acomplaint . I

n th e absenc e o

f information breaking dow

n complaint s t

o carrie r by metho dusedto file , one thir do f complaint s ar

e assumedt

o b e submitted online , on e thir dvi amail , an

don e thir dvi aphone . Cos t

component s independen

t o f tim e include : fo

r writing aletter , $0,4 2 fo r astam p an d$,1 0 fo r pape r an denvelope ; fo

r makin g aphone call , $0.1 5 phone charge ; fo r emailing acomplaint , i

t was assumedtha

t the incrementa

l cos t fo r thos e choosing the metho dwouldb e $0 . Th e valu e o f a consumer' s tim

e i s assume

da t th e averag e hourly wag e rat e an dth e amoun

t o f tim e requiredt o prepar e an dfile acomplain

t varie s fro m1 0 t o 3 0 minutes . Tabl e A-22 . Valu e o f Tim e t o Prepar e an d Fil e a Complain t Cos t t o Consume rt o Prepar e an d Pil e a Complain t
Cos t Componen t %o f Material s Cos t complaint s Material s cos t o f lette rwriting : stam p $ 0.4 2 pape ran d envelop e $ 0.1 0 33 % Equipmen t cos t of calling : Phon e charg e $ 0.1 5 33 % Additiona l equipment/material s cos t o f goin g online : $ - 33 % Tim e Spen t (variabl e fro m 1 0 t o 3 0 minutes ) Valu e of Tim e fo rAi r$28.6 0 pe rhou r Passenger s Tota l Lowe r10 % Limi t (1 0 MInute a Spent )

$ 0.1 7 $ 0.0 5 $ - $9.5 3 $ 9.7 6 Media n

(2 0 Minute s Spent )

$ 0.1 7 $ 0.0 5 $ - $4.7 7 $ 4.9 9 Uppe r10 %

Limi t (3 0 Minute s Spent )

$ 0.1 7 $ 0.0 5 $ - $14.3 0 $ 14.5 2 Source : Burea

u o f Labor Statistics ; subjec t

matte r experts . 

### Numbe r o f Annua l Complaint s t o Covere dCarrier s Variabl e Description : Measure s th e averag e numbe r o f complaint s t

o all covered carriers . DO

T Ai r Travel Consume

r Report s list s complaint s receivedby DOT , but not thos e sen t directly t o the carriers . The DO

T Inspecto r Genera l foun di n Marc h 2000 tha t i t receivedatota

l o f 1,35 2 complaint s fo

r the 1 0 majo

r airlines , bu

t tha t thos e carrier s receive d82,58 7 complaints , o r 6 1 time s th e numbe

r o f complaint s recordedb y DOT , T o arriv e a t atota l numbe r o f complaint s fo

r coveredcarriers , th e numbe r o f complaint s i

n th e DO T Ai r Travel Consume

r Report s was multiplie dby 61 ,Source : "Fina l Report o n Airlin e Custome r

Servic e Commitment, " Offic e o f th e Inspecto r General , U S Departmen t o f Transportation , report

AV-2001-020 , Febmar y 12 , 200 1 an d"Ai r

Trave l Consume r

Report , U,S , Departmen t o f Transportation . Trave l Agencie s wit h Onlin e Purchas e Engin e Variabl e Description : Thi s variabl e estimate s th e niunbe r o f trave l agencie s tha t

provid e onlin e bookin g o f

airlin e ticket s an dwoul dthu s b e require dt o pos t delay data . Th e tota l numbe r o f trave l agencie s wa s tak e fro mth e U.S , Censu s Bureau an dmultiplie db y th e percentag e tha t

hav e onlin e bookin g engines , estimate dt o b e 17 % b y th e America n Society o f Trave l Agents , Source : U,S . Censu s Bureau an dtelephon e conversatio n with America n Society o f Trave l Agents , Jun e 13,2008 . Cos t t o Carrier s o f

Providin g Dela y Dat ao n Thei r Website s Variabl e Description : Th e cos t t o carrier s t o provid e dela y dat ao n thei r website s i s estimate da

t $400,000 . Assumin g informatio n i s fe dint o thei r electroni c infrastractur e fre e o f charge , ther e woul donl y b e th e fixe dcos t t o se t u p th e websit e an dinfrastmctur e t o receiv e dela y data . A carrie r trad e associatio n reviewe dth e estimate s use di n th e initia l RI A an dprovide daltemativ e cos t estimates , whic h wer e incorporated . Source : Comment s o f

th e Ai r Transport

Associatio n o f

Americ ai n th e matte r

o f th e Notic e o f Propose dRulemakin g Concemin g Enhancin g Airlin e Passenge r Protections . Cos t t o Trave l Agencie s o f

Providin g Dela y Dat ao n Thei r Website s Variabl e Description : Thi s i s th e cos t t o trave l agencie s t o provid e delay dat ao n thei r websites . Assumin g informatio n i s fe dint o thei r electroni c infrastmctur e fre e of charge , ther e woul donl y b e th e fixe dcos t t o se t u p th e websit e an dirifrastmctur e t o receiv e dela y data . Thi s i s th e sam e a s settin g u p di e websit e initiall y (i.e. . Cos t o f Postin g a Contingenc y Pla n Dealin g with Fligh t Delay s o n an Airlin e Website) . Source : Estimate s provide db y reportin g carrier s t o modif y compute r

system s t o provid e dat afor additiona l reportin g requirement s for Fina l Rul e o n revisio n t o Airlin e Servic e Quality Performanc e report s (a s reporte di n Regulatory Evaluatio n o n Revisio n o f Airlin e Servic e Qualit y Performanc e Reports , U.S . Departmen t o f Transportation , Docke t

No . OS T 2007-28522 , Novembe r 2007) , use da s aproxy . Tabl e A-23 . Pe rEstablishmen t Cos t t o Airline s an d Trave l Agencie s o f Providin g Dela y Dat a o n Thei rWebsites , o rt o Provid e Informatio n o n Websit e an d E-ticket s o n Ho w t o Fil e Complaint s 

## m-wmimiMn , "••

' >-:<,Pmrni x $10,000 $35,000 $60,00 0 Source : Regulatory Evaluatio n o n Revisio n o f Airlin e Sen/ic e Qualit y Performanc e Reports , U S Departmen t o f Transportation , Docke t No . OS T 2007-28522 , Novembe r2007 .Percen t o f Flight s Purchase dOnlin e (use dfo r calculation s fo r

Altemativ e 4 only ) Variabl e Description : Thi s variabl e estimate s th e overal l percentag e o f ticket s purchase donlin e (40% ) an dreflect s th e portio n o f consumer s wh o ar e likel y t o us e poste ddela y dat ao n flight s i n thei r purchas e decisions . Source : K . O'Toole , "I T Trend s Surve y 2003, " Airlin e Busines s Magazine , Augus t 2003 , a s reporte di n Nelso n Granados , Alo k Gupt aan dRobert

J . Kauffman , "IT-Enable d Transparen t

Electroni c Markets : Th e Cas e o f th e Ai r Trave l Industry, " Informatio n System s an dE-Busines s Management , vol . 5 , n o 1 , Januar y 2007 . Percen t o f Reportin g Carriers ' Ticket s Purchase do n Thei r Websit e Variabl e Description : Thi s variabl e estimate s th e percen t o f reportin g carriers ' ticket s purchase do n thei r

website s (no t

includin g thos e reportin g carrier s that alread y pos t

som e delay data ) an dreflect s th e portio n o f consumer s wh o ar e likel y t o us e poste ddelay dat a o n flight s i n thei r

purchas e decisions . Dat awa s foun dfor th e percentag e o f

ticket s purchase do n th e airline' s websit e for Delta , Northwest , Americ aWest , Alaska , AirTran , an dJetBlu e (Da n Reed , "Airline s Try t o Mak e Interne t Work for Them, " US A Today , Octobe r 31 , 2005) . Weighte daverage s o f thos e figures , b y passenger s i n 2007 , wer e use d t o calculat e estimate s for

othe r reportin g carriers. Th e resultin g overal l estimat e of ticket s purchase do n carrie r

website s i s 34,5 % for

al l reportin g carrier s not alread y postin g delay data . Source : Figure s fo r

Delta , Northwest , Americ aWest , Alaska , AirTran , an dJetBlu e fro m Da n Reed , "Airline s Try t o Mak e hiteme t Work for Them, " US

A Today , Octobe r

31 , 2005 . Estimate s for

th e remainin g reportin g carrier s estimate dusin g weighte daverage s b y passenger s i n 200 7 for th e carrier s liste dabove . Tabl e A-24 . Percen t o f Reportin g Carrie r Sfflljife ' ' . ' '•/''''''•^'"'•'j'^''#iif'.'?^'*'^'^ \ s ' Ticket s Purchase d A . v* '-^ 1 \

-. u •^•f. ; * '"'is^^^ m Delta , incl . Comair , AS A Northwes t U S Airway s Alask a AirTra n JetBlu e o n Thei rWebsit e l^^-tT^iai^"''*"'*- ? 'LJ"** - * • ' - 23 % 23 % 28 % 35 % 58 % 78 % Likel y Decreas e i n Wai t Time s Du e t o Postin g Dat a Variabl e Description : Th e likel y impac t o n carrie r

schedule s i s calculate dusin g th e declin e i n hospita l wai t time s i n Ontari o after

hospita l wai t

time s wer e publishe d electronicall y a s aproxy . Hospital s an dairline s bot h offe r service s for

whic h ther e ar e limite dsupplier s an dwaits/delays , whil e delays / an dwait s ar e important , the y ar e not th e primary facto r

affectin g purchase . I

t i s assume dtha t

carrier s woul dadjus t

thei r schedule s b y increasin g th e schedule darriva l tim e for certai n flight s equa l t o th e produc t o f th e percen t reductio n i n wai t

tim e an dpercen t

o f consumer s purchasin g ticket s online .

### Source : "The Wai t Tim e Strategy Review O

f Activities : January-March 2008 ; Updat e #1 1 - Apri l 8 , 2008, " Ontari o Ministr y o f Healt h an dLongter

mCare , www.ontariowaittimes.com Tabl e A-25 . Wai t Time s an d Thei rDeclin e Afte rDelay Data Postin g i r 1 Ontari o Adul t Wal t Time s Data : 9 Ou t o f 1 0 Patient s Receiv e th e Treatmen t Withi n Targe t - August/Septembe r200 5 Procedur e
Cance rSurgery Angiograph y Angioplast y Bypas s Surgery Catarac t Surgery Hi p Replacemen t Kne e Replacemen t iVIR I C T Al l procedure s Day s Baselin e Aug/Sep t 200 5 8 1 5 6 2 8 4 9 31 1 35 1 44 0 12 0 8 1 151 7 Curren t Fe b 0 8 6 6 2 4 1 4 5 2 12 0 22 4 25 7 10 9 3 7 90 3 Acces s Targe t

8 4

-

- 18 2 18 2 18 2 18 2 2 8 2 8 Curren t vs . Baselin e

Chang e (Days ) -1 5 -3 2 • -1 4 3 -19 1 -12 7 -18 3 -1 1 -4 4 61 4 Source : "Th e Wai t Tim e Strateg y Revie w O f Activities : January-iVlarc h 2008 ; Updat e #1 1 - Apri l 8 , 2008, " Ontari o Ministry o f 1 Care , www.ontariowaittimes.co m 

### Percentag e o

f "Meeters-and-Greeters ' Informatio n No t Accessin g Real Tim e Fligh t Dela y Variabl e Description : Thi s variabl e estimate s th e percentag e o f person s going to a

n airpor t t o mee t passenger s wh

o d o not acces s information dela

y dat aan dthu s ar e unawar e tha t aflight i s delayed . Thi s estimat

e was necessar

y in the absenc e o

f specifi c dat aan di n orde r to mak e th e estimatio n exercis e manageable . Source : Subject

matte r experts . Tabl e A-26 . Percentag e o f "lUleeters-and-Greeters " No t Accessin g Rea l Tim e Fligh t Dela y Informatio n Percentag e o f "Meeters-and-Greeters " No t Accessin g Ft^tjr^Ftlih||hlta y Ittfdrmatlo n Lowe r10 % Limi t _Media n ^•bJ-.^/lftajpeiflO^Umi t 5% 25 % 50 % 

### Percen t o f Ticket s Purchase dOnlin e (use dfo r calculation s fo r

Alternativ e 4 only ) Variabl e Description : Thi s variabl e estimate s th e overall percentag e o f ticket s purchasedonline (40% ) an dreflect s th e portio n o

f consumers wh

o ar e likely to us e posteddela

y dat aon flights in thei

r purchas e decision s imde

r Altemativ e 4 . Source : K . O'Toole , "IT Trend s Surve y 2003, " Airline Busines s Magazine , Augus t 2003 , as reportedi

n Nelson Granados , Alo

k Gupt aan dRober t J . Kauffman , "IT-Enable dFirs t Tim e Softwar e Reprogrammin g Cost s

Transparen t

Electroni c Markets : Th e Cas e o f th e Ai r Trave l Industry, " Informatio n System s an dE-Busines s Management , vol . 5 , n o 1 , January 2007 , Cos t t o Globa l Distributio n System s (GDSs ) an dOnlin e Trave l Companie s (OTCs ) t o Provid e Dela y Dat afo r Carrier s an dTrave l Agenc y Bookin g (use dfo r calculation s fo r

Alternativ e 4 only ) Variabl e Description : Thi s i s th e cos t t o th e Globa l Distributio n Systems , o r GDSs , (Amadeu s Galileo , an dSabre ) an dOnlin e Trave l Companie s (approximatel y eigh t OTCs , base do n membershi p o f

th e Interactiv e Trave l Service s Association ) o f providin g dela y data . Th e GDS s ar e th e bookin g engine s use db y trave l agencie s an dmos t carriers. Th e OTC s ar e onlin e agencie s witi h independen t

airlin e ticke t

bookin g capabilities . Th e assumptio n wa s mad e tha t cost s t o reformat

th e GDS s an dOTC s coul dinclud e accessin g an dincorporatin g int o thei r software syste mdat afro meac h o f th e reportin g carrier s an d coul drang e fro m$35,00 0 t o $60,00 0 pe r carrie r (similar i n scop e t o th e media n an dhig h cost s estimate db y carrier s t o provid e additiona l dela y dat at o BTS) . Updatin g th e dat ai s estimate dt o cos t

th e sam e a s th e annua l cos t t o th e carrier s t o update thei r website s ($10,00 0 t o $60,000) , Commimication s t o DO T fro mon e o f th e GDS s indicate da

n estimat e o f

"roughl y $830,00 0 i n developmen t cost s t o chang e thei r

syste mt o compl y with th e Rule , afigur e 2 % different

fro mth e media n valu e estimat e independently . Source : Media n an dhig h estimate s provide db y reportin g carrier s t o modif y compute r system s t o provid e dat afor additiona l reportin g requirement s pe r Fina l Rul e o n revisio n t o Airlin e Servic e Quality Performanc e report s (a s reporte di n Regulator y Evaluatio n o n Revisio n o f

Airlin e Servic e Quality Performanc e Reports , U,S , Departmen t o f Transportation , Docke t

No , OS T 2007-28522 , Novembe r 2007 ) use da s aprox y fo r pe r carrie r dat acollectio n an dincorporatio n costs . Tabl e A-27 . Pe rEstablishmen t Cos t t o Globa l Distributio n System s an d Onlin e Trave l Companie s o f Providin g Dela y Dat a o n Thei rWebsite s F>e rEstablishmen t Cos t t o Globa l Distributio n System s an d Onlin e Trave l Companie s o f Providin g Dela y Dat a o n Thei rWebsite s . . HD R Calculatio n base d o n U S DO T Regulator

y Evaluatio n o n Revisio n t o Airiin e Service Qualit y Performanc

e Report s Lower10" o Limi t

$630,00 0 IMedla n

$810,00 0 Uppe r10 % Limi t

$1,080,00 0 Confidentia l Communicatio n fro m GD S compan y $830,00 0 i n Use $630,00 0 $830,00 0 $1,080,00 0 Costf o Update , Eac h Yea r Lowe r10 % Limi t IMedla n Uppe r10 % Limi t HD R Calculatio n base d o n U S DO T Regulator

y Evaluatio n o n Revisio n t o Airiin e Service Qualit y Performanc

e Report s $10,00 0 $35,00 0 $60.00 0 Source : Regulator

y Evaluatio n o n Revisio n o f Airlin e Service Qualit

y Performanc

e Reports , U S Departmen t o f Transportation , Docke t No . OS

T 2007-28522 , Novembe r2007 ; Confidentia l communicatio n t oDepartmen t fro maGloba

l Distribution System , Jul y 2008 . Summar y o f

Annua l Cost s fo r

Sel f Auditin g Servic e fo r

Reportin g an dNon Reportin g Carrier s Variabl e Description : Thi s i s th e aimual cos t t o reportin g carrier s o f self-auditin g additiona l servic e (custome r complaint ) call s stemmin g fro mth e implementatio n o f th e ne w regulations . Th e mea n annua l salary o f acustome r

servic e representative i n 2007 , accordin g t o th e BLS , wa s $31,040 . Th e Departmen t o f Homelan dSecurity 200 6 Cost Benefi t Analysi s Guidebook^ ° recommend s usin g amark-u p o f 32.8 % t o wage s t o tak e int o accoun t

benefit s receive dove r

an dabov e wages . Applyin g thi s multiplie r t o th e custome r servic e representative' s annua l salary yield s $41,221 , inflate dt o 200 8 dollar s t o b e $41,798 . I n additio n t o th e cost s o f th e custome r

representative , i t

i s assume dtha t

th e airline s als o hir e acontracto r

t o tes t th e quality o f

th e custome r

servic e representatives . Northwes t contract s athir dpart y t o plac e "myster y calls " t o fiv e reservation s center s t o tes t DO T mandate s an dothe r

complianc e issues . Th e Northwes t Airline s custome r

servic e pla n (availabl e a t

www,nwa,com/plan/conmi 5 ,html ) describe s tha t thi s servic e i s extrapolate d t o includ e 10 0 call s pe r

cente r pe r quarte r (50 0 calls/quarter ) t o tes t thei r custome r servic e pla n complianc e an dadjus t training/coachin g accordingly . Extrapolatin g further , 2,00 0 extema l audi t

call s nee dt o b e mad e eac h year . Eac h o f thes e i s assume dt o cos t $1 5 pe r hou r an dlas t an averag e o f

3 0 minutes . Th e tota l annua l cos t o f thi s extema l audi t proces s i s estimate da

t $15,00 0 pe r

airline . It i s assume dtha t

sinc e reportin g carrier s hav e muc h large r operations , o n average , tha n non-reportin g carriers , th e implementatio n cost s for non-reportin g carrier s woul db e proportionall y smaller . Th e averag e cos t fo r non-reportin g carrier s t o self-audi t i s at 11 % o f tha t for reportin g carriers , reflectin g th e portio n o f passenger s o n non-reportin g carrie r flights, o r $6,248 , Dat aSources : Mea n startin g salar y o f custome r

servic e representativ e wa s fro mth e Bureau o f

Labo r Statistic' s May 200 7 Nationa l Occupationa l Employmen t an dWag e Estimates ; Benefit s multiplie r fro mU,S , Departrnen t

o f Homelan dSecurity , 200 6 Cost Benefi t Analysi s Guidebook ; Dat aregardin g Northwes t extema l audi t

cost s asubjec t matte r expert.

8 0 Pag e 15 .Tabl e A-28 . Annua l Cost s t o Airline s o f Sel f Auditin g Custome rComplain t Call s Antim i Oos<«

( M Atirlbtt f ollel f l^c(ttift$]0us)^fh«i^€6i»pt$N t Ciilfsi ^ Custonne rServic e Cos t $41,79 8 Mystery Callin g Contrac t $15,000 Tota l $56,79 8 Source : Burea u o

f Labo rStatistics ' Ma

y 200 7 Nationa l Occupationa l Employmen t an d Wag e Estimates ; Benefits multiplie rfro m U.S . Departmen t o f Homelan d Security , 200 6 Cost-Benefi t Analysi s Guidebook ; Dat a regardin g Northwes

t externa l audi t cost s fro m subjec t matte rexpert . Numbe r o f Annua l Complaint s t o Covere dCarrier s tha t D o No t Alread y Self-Audi t Adherenc e t o Custome r

Servic e Plan s Variabl e Description : Measure s th e averag e numbe r o f complaint s t o al l covere d carrier s tha t

ar e no t alread y self-auditin g adherenc e t o custome r servic e plans . Th e DO T Ai r Trave l Consume r

Report s list s complaint s receive db y th e Department , bu t no t complaint s directl y t o th e carriers . Th e DO T Inspecto r Genera l foun di n 200 1 tha t it receive d1,35 2 complaint s for th e 1 0 majo r

airlines , but

tha t thos e carrier s receive d 82,58 7 complaints , o r

6 1 time s th e numbe r

o f complaint s recorde db y DOT . T o arriv e a t atota l numbe r

o f complaint s for

covere dcarriers , th e numbe r o f complaint s i n DO T Ai r Trave l Consume r

Report s for

covere dcarrier s tha t

are not alread y self-auditin g adherenc e t o custome r

servic e plan s wa s multiplie db y 61 . Source : "Fina l Report

o n Airlin e Custome r

Servic e Commitment, " Offic e o f th e Inspecto r General , U S Departmen t o f Transportation , repor t

AV-2001-020 , Febmar y 12 , 200 1 an d"Ai r

Trave l Consume r

Report , U.S . Departmen t o f Transportation . Chang e i n Complaint s Du e t o Sel f Auditin g o f

Custome r

Servic e Plan s Variabl e Description : Thi s variabl e measure s th e decreas e i n custome r complaint s that woul doccu r

du e t o self-auditin g o f

adherenc e t o custome r

plans . Fo r

thos e four

carrier s whic h hav e alread y implemente dsel f audit s (Alask ai n 2000 , Continenta l i n 2001 , Northwes t

i n 1999 , Southwes t

i n 1999) , th e averag e chang e i n complaint s i n th e tw o year s followin g implementatio n wa s calculate dt o b e -39% . Durin g thos e sam e periods , th e chang e i n complaint s t o carrier s tha t di dnot sel f audi t wa s calculate dt o b e -19% , a differenc e o f

2 0 percentag e point s fro mself-auditin g carriers . Unde r th e conservativ e assumptio n tha t

thos e carrier s mos t

likel y t o benefi t

fro msel f

audit s o f custome r servic e plan s wer e th e firs t

t o implemen t

them , remainin g carrier s tha t wil l no w implemen t

sel f audit s a s aresul t

o f th e Fina l Rul e ar e expecte dt o realiz e a n improvemen t

i n complain t rate s equa l t o hal f

o f differenc e i n comparativ e complain t rate s note dabove , i,e, , a10 % decreas e i n complaints . Source : Calculation s base do n dat afro mDO T Ai r Trave l Consume r

Report , 199 8 throug h 2007 , Informatio n o n sel f auditin g o f

custome r

servic e plan s fro mDO T an d emai l communication .