Airline Passenger Protections: More Data and Analysis Needed to Understand Effects of Flight Delays
Published: 2011-09-07T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Flight delays and cancellations are disruptive and costly for passengers, airlines, and the economy. Long tarmac delays have created hardships for some passengers. To enhance passenger protections in the event of flight disruptions, the U.S. Department of Transportation (DOT) recently introduced passenger protection regulations, including a rule that took effect in April 2010 designed to prevent tarmac delays more than 3 hours (the tarmac delay rule), as well as other efforts to improve passenger welfare. As requested, this report addresses (1) whether flight delays and cancellations differ by community size; (2) how DOT's tarmac delay rule has affected passengers and airlines; and (3) how passenger protection requirements in the United States, Canada, and the European Union (EU) affect passengers and airlines. GAO analyzed DOT data, including through the use of regression models, as well as data from FlightStats, a private source of flight performance information. GAO also reviewed documents and interviewed government, airline, and consumer group officials in the United States, Canada, and the EU.
section_title: What GAO Found
paragraphs: Airports in rural communities have higher rates of delays and cancellations than airports in larger communities, but DOT data provide an incomplete picture of this difference. DOT's data include flights operated by the largest airlines, representing about 70 percent of all scheduled flights. GAO analysis of FlightStats data, representing about 98 percent of all scheduled flights, show more substantial differences in flight performance trends by community size than DOT data. DOT has historically not collected data from smaller airlines because of the burden it could impose on these airlines, but without this information, DOT cannot fully achieve the purpose of providing consumers with information on airlines' quality of service. DOT's tarmac delay rule has nearly eliminated tarmac delays of more than 3 hours (180 minutes), declining from 693 to 20 incidents in the 12 months following the introduction of the rule in April 2010. While this has reduced the hardship of long on-board delays for some passengers, GAO analysis suggests the rule is also correlated with a greater likelihood of flight cancellations. Such cancellations can lead to long overall passenger travel times. Airlines and other aviation stakeholders maintain that the tarmac delay rule has changed airline decision-making in ways that could make cancellations more likely. To test this claim, GAO developed two regression models, which controlled for a variety of factors that can cause cancellations and measured whether the time period following the imposition of the tarmac delay rule is correlated with an increase in cancellations. The two models assessed flights canceled before and after leaving the gate, for the same 5 months (May through September) in 2009 and 2010. In both cases, GAO found that there was an increased likelihood of cancellation in 2010 compared to 2009. EU requirements provide airline passengers with more extensive protections, such as care and compensation, for flight delays, cancellations, and denied boardings than do U.S. or Canadian requirements. But these protections may also increase costs for airlines and passengers. For example, some airline officials in the United States and the EU told GAO that increases in the amount of denied boarding compensation has increased their overall costs. Additionally, enhanced passenger protections, such as those in the EU, can create enforcement challenges if regulations are unclear or not universally enforced.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOT collect and publicize more comprehensive data on airlines' on-time performance and assess the full range of the tarmac delay rule's costs and benefits and, if warranted, refine the rule's requirements and implementation. DOT did not comment directly on the recommendations, but indicated that it would soon begin a study of the effect of the tarmac delay rule.

section_title: Letter
paragraphs: Flight disruptions, including delays, cancellations, long tarmac delays,  and denied boarding, are costly for passengers, airlines, and the  economy. In recent years, roughly a quarter of all commercial flights have  been delayed or canceled, resulting in tens of thousands of years in total  delayed travel time and billions of dollars in out-of-pocket expenses and  time lost for passengers each year. With fewer empty seats than ever,  opportunities for rebooking are often limited, exacerbating the disruptions  and associated costs. Furthermore, these disruptions may be particularly  challenging for smaller communities that have infrequent service. In a  relatively few but widely publicized cases, long delays have occurred on  the tarmac where passengers were held on planes for hours.  Passengers also can find themselves stranded or delayed when they are  denied boarding because an airline has overbooked a flight.
In the United States, airlines are generally not required to compensate  passengers for their time or expenses when flights are delayed or  canceled. In the European Union (EU), however, a regulation enacted in  2004 guarantees care, such as lodging and meals, and financial  compensation for passengers with disrupted travel plans. Canada has  promoted guidelines to encourage airlines to improve passenger  protections, but has not otherwise required airlines to provide passenger  care or compensation for flight disruptions. The U.S. Department of  Transportation (DOT) has implemented some other passenger  protections, including a recent regulation designed to mitigate hardships  for airline passengers during long tarmac delays (the tarmac delay rule).
You asked us to examine the extent of passenger protections in the  United States, Canada, and the European Union (EU), as well as assess  the trends in delays and cancellations in different-sized U.S. communities.  We also assessed the effect of DOT’s tarmac delay rule. Accordingly, this  report addresses the following questions: (1) Do the trends in and  reasons for flight delays and cancellations in the United States differ for  smaller and larger communities? (2) How has DOT’s tarmac delay rule  affected passengers and airlines? (3) How have the requirements and  practices for protecting passengers from flight delays, cancellations, and  denied boardings in the United States, Canada, and the EU affected  passengers and airlines?
To identify and compare the trends in and reasons for flight delays and  cancellations in different-sized U.S. communities, we analyzed data from  DOT and FlightStats, a private data source from Conducive Technology  that records flight performance information. Specifically, we compared the  delay, cancellation, and diversion rates for all scheduled flights at  different-sized airports and communities from 2005 to 2010. To better  understand the reason for different trends, we reviewed a DOT Office of  Inspector General report and interviewed aviation industry experts;  representatives of industry associations and consumer groups; and  representatives of the three biggest U.S. legacy airlines and three biggest  low-cost airlines, based on passenger enplanements. To assess the  extent to which the implementation of DOT’s tarmac delay rule was  associated with an increase in cancellations, we examined DOT data on  tarmac delay trends and also constructed two multivariate logistic  regression models. Incorporating data from DOT, the Federal Aviation  Administration (FAA), and the National Oceanic and Atmospheric  Administration, the regression models controlled for factors that can lead  to flight cancellations, including weather, to assess how the rule’s  implementation affected the likelihood of flight cancellations. Two aviation  industry experts assessed our models’ structure and provided feedback  that we incorporated into our approach as appropriate. We also spoke  with representatives of U.S. airlines, industry associations, consumer  groups, and DOT about the rule’s impact on passengers and airlines. To  assess the reliability of DOT and FlightStats data, we reviewed existing  documentation related to the data sources and interviewed  knowledgeable officials at DOT and FlightStats about the data. We  determined that the data were sufficiently reliable for the purposes of this  report. To determine how the requirements and practices for protecting  passengers from flight delays, cancellations, and denied boardings in the  United States, Canada, and the EU have affected passengers and  airlines, we examined the laws, regulations, international agreements,  and voluntary commitments governing passenger protections in the three  regions. We also reviewed the contracts of carriage for selected airlines in  the three regions and examined DOT data on denied boardings in the  United States. Furthermore, we interviewed airline, industry association,  consumer group, and government officials in all three regions.
We conducted this performance audit from August 2010 through  September 2011 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives. See appendix I  for more information on our scope and methodology.
subsections: section_title: Background
paragraphs: The U.S. passenger airline industry is principally composed of legacy,  regional, and low-cost airlines. Legacy (sometimes called network)  airlines support large, complex hub-and-spoke operations with thousands  of employees and hundreds of aircraft (of various types), with flights to  domestic communities of all sizes as well as to international destinations.  Generally, regional airlines operate smaller aircraft than legacy airlines— turboprops or regional jets with up to 100 seats—and often operate flights  marketed by a legacy airline. Low-cost airlines generally entered the  marketplace after the U.S. airline industry was deregulated in 1978 and  typically have a less extensive network and lower operating costs.
Passengers access flights offered by these various airlines in the United  States through hundreds of commercial-service airports. Primary airports  are classified on the basis of passenger traffic as large, medium, small,  and nonhub. Passenger traffic at these airports is highly concentrated:  about 70 percent of passengers enplaned at the 29 largest airports and  another 19 percent enplaned at the 36 next largest airports in 2009, the  most recent year for which these data are available. Some of these  largest airports also face significant congestion and delay issues. As we  recently reported, seven large airports were the source of about 80  percent of departure delays captured in FAA’s Operations Network in  2009.
The national airspace system in which these airlines and airports operate  is a complex, interconnected, and interdependent network of systems,  procedures, facilities, aircraft, airports, and people that must work  together to ensure safe and efficient operations. FAA, DOT, airlines, and  airports all affect the efficiency of national airspace system operations. In  particular, DOT and FAA set policy and operating standards for aircraft  and airports.
As we previously reported, the capacity of the aviation system to meet the  demand of aviation system users is both variable and subject to a number  of interrelated factors. The capacity of the aviation system is affected  not only by airports’ infrastructure, including runways and terminal gates,  but also by weather conditions and air traffic control that can, at any given  time, result in disruptions and variation in available airport and system  capacity. For example, some airports have parallel runways that can be  used simultaneously in good weather but are too close together for  simultaneous operations in bad weather. In severe weather, airports can  close, resulting in aircraft being grounded both at the closed airport and at  other airports where aircraft cannot depart for the closed airport. The  number of aircraft that can be safely accommodated in a given portion of  airspace further affects capacity. If too many aircraft are trying to use the  same airspace, some may be delayed on the ground or en route. For  example, delays often occur in the New York City area because air traffic  is so heavy, with three major airports located within 100 miles of each  other. Airlines’ scheduling and business practices can also exacerbate  airport congestion and delays. For instance, some airline business  models rely on tight turnaround times between flights, which can increase  the likelihood of delays for flights scheduled later in the day. Additionally,  airlines sometimes schedule flights during certain periods to  accommodate passenger demand without considering an airport’s  available capacity.
When flights are disrupted—whether caused by reductions in system  capacity (such as during bad weather) or by internal factors (such as  aircraft mechanical problems or crew shortages)—airlines make trade- offs between long delays and cancellations, though they generally try to  avoid canceling flights. In doing so, they attempt to minimize disruptions  to their network and passengers. For example, when bad weather  reduces airport capacity and fewer flights can take off or land, airlines  must decide how to ration their traffic. They can hold to their schedule,  recognizing that some flights may experience long delays, or they can  cancel some flights to avoid long delays for the remaining flights. How  airlines manage such trade-offs depends on their business models and  the circumstances of each situation.
As we recently reported, flight delays and cancellations have declined  since 2007, largely because airlines have scheduled fewer flights during  the economic downturn. From 2007 through 2010, the portion of flights  that were delayed—that is, arrived at least 15 minutes later than  scheduled—or were canceled or diverted decreased by 6 percentage  points, according to DOT data (see fig. 1). Indeed, cancellations rates  also peaked in 2007 at 2.16 percent of all flights, before declining to 1.39  percent in 2009 and 1.76 percent in 2010. Nevertheless, as we previously  reported, airports still experience and contribute substantial delays to the  system.
In recent decades the airline industry’s earnings have been extremely  volatile. Despite some periods of strong growth and increased earnings,  airlines have at times suffered such substantial financial distress that  some have filed for bankruptcy. According to a recent FAA-sponsored  research study, U.S. passenger airlines lost more than $60 billion from  2000 through 2008 on revenues of just more than $1 trillion. An  inefficient air transportation system that contributes to flight delays and  cancellations increases airline costs and reduces demand for air travel,  compounding these financial challenges.
Airline industry financial pressures have led airlines to change certain  business practices in order to cut costs and enhance revenue. For  example, airlines have adjusted their capacity to increase passenger  load-factors (i.e., the proportion of available seats filled with passengers).  As a result, a large number of cancellations by an airline cannot be  absorbed easily into later flights and, increasingly, airlines will not rebook  passengers on other airlines’ flights because of the costs involved.  Passengers on canceled flights can then face long overall trip delays. In  addition, for decades airlines have sought to reduce the revenue losses  associated with passengers who do not show up for flights by accepting  reservations for more passengers than they have seats. Because the  number of no-shows is not entirely predictable, there is an element of risk  in overbooking flights. If too many reservations are accepted and more  passengers show up at departure time than the aircraft can carry, the  airline must deal with the costs and customer service issues that arise  when some customers are denied boarding. On the other hand, if the  airline does not accept enough reservations for the flight and the number  of no-shows is greater than expected, the airline loses revenue from  empty seats that could otherwise have been occupied and some  passengers are denied the opportunity to book their first-choice flight  even though that flight could have accommodated them. DOT has long  required airlines to solicit and compensate volunteers on oversold flights  before anyone is bumped involuntarily and has also mandated financial  compensation for passengers who are involuntarily denied boarding  because their flights were oversold.
Passenger complaints about delays, cancellations, and denied boardings,  including complaints about being held in an aircraft for many hours while  awaiting takeoff, have led Congress to consider stronger passenger  protections. For instance, after hundreds of passengers were stuck in  planes on snowbound Detroit runways for more than 8 hours in January  1999, both the House of Representatives and Senate conducted hearings  on airlines’ treatment of air travelers and considered whether to enact a  “passenger bill of rights.” The Air Transport Association and its member  airlines maintained that they should have an opportunity to improve their  customer service without legislation and executed an Airline Customer  Service Commitment on June 17, 1999, in which each of the member  airlines agreed to prepare a customer service plan. In 2000, AIR-21  mandated a review by the DOT Office of Inspector General (IG) of the  extent to which each airline met all provisions of its customer service  plan. In its 2001 report, the IG found that, overall, airlines were making  progress toward meeting their plan provisions and that their efforts had  been a plus for air travelers. However, the IG also reported “significant  shortfalls in reliable and timely communication with passengers by the  airlines about flight delays and cancellations.” Furthermore, the IG found  that the airlines had not directly addressed the root cause of customer  dissatisfaction—flight delays and cancellations—and had not indicated  how they planned to remedy these problems in areas under their control.  Other passenger rights bills were introduced in Congress in 2001, 2007,  2009, and 2011. These bills were also designed to establish and  enhance airline passenger protections, and the 2007, 2009, and 2011  bills explicitly limited tarmac delays to 3 hours. However, the 2001, 2007,  and 2009 bills were not enacted, and the 2011 bill has not yet been  enacted during this Congress.
In recent years, DOT has adopted rules to enhance passenger  protections. First, in 2008, it amended its overbooking rule to increase the  required compensation for involuntarily denied boarding, among other  things. Second, in late 2009, after a lengthy rulemaking and a task force  report on long tarmac delays, DOT issued its first “Enhancing Airline  Passenger Protections” rule. The final rule, in effect since April 29,  2010, requires certain U.S. airlines to develop and implement a  contingency plan for lengthy tarmac delays, including an assurance that,  for domestic flights, the airline will not allow a tarmac delay to exceed 3  hours unless the pilot-in-command determines that there is a safety- related or security-related impediment to deplaning passengers, or that  air traffic control has advised the pilot-in-command that deplaning would  significantly disrupt airport operations. The airlines’ contingency plans  must also include an assurance that adequate food and potable water will  be provided no later than 2 hours after the aircraft leaves the gate (or  touches down, in the case of an arrival), unless the pilot-in-command  determines that safety or security considerations preclude such service.  Failure to comply with these rules could be considered an unfair or  deceptive practice and may subject the airline to enforcement action  and a fine of up to $27,500 per violation. Furthermore, under the rule,  the holding out—advertising or operating—of any chronically delayed  flight is considered an unfair and deceptive practice and an unfair method  of competition. The rule also requires a variety of other actions on the part  of airlines to protect and better inform passengers.
In April 2011, DOT issued its second “Enhancing Airline Passenger  Protections” rule. This rule—which partially went into effect in August  2011 and will be fully implemented in January 2012—requires airlines,  among other things, to reimburse passengers for baggage fees if their  bags are lost, provide consumers with greater compensation for  involuntarily denied boarding, and disclose all fees for optional services.  The new rule also expands the existing tarmac delay rule to cover all U.S.  large-, medium-, small-, and nonhub airports as well as foreign airlines’  operations at those U.S. airports, and establishes a 4-hour time limit on  tarmac delays for international flights of U.S. and foreign airlines, subject  to safety, security, and air traffic control exceptions.
Like the United States, Canada, and EU also have laws, regulations, and  guidance governing consumer protection for air travelers, including airline  responsibilities to passengers when flight plans are disrupted. U.S.,  Canadian, and EU airlines generally must adhere to the passenger  protection requirements of the region from which they are departing.  Airlines in all three regions also have contracts of carriage in which they  may provide for passenger care, compensation, or both in the event of a  flight disruption. Thus, when provided for in law or in a contract of  carriage, passengers may be entitled to assistance, compensation, or  both from their airline when a flight delay, cancellation, or denied boarding  occurs. For example, under certain circumstances, some airlines offer  food and beverage vouchers during flight disruptions. Finally, international  standards and agreements also govern the rights of airline passengers,  but only on international flights. Notably, the Montreal Convention,  adopted in 1999 and ratified by the United States in 2003, provides that  passengers can bring legal action against an airline for damages  associated with flight delays.
section_title: Airports in Rural Communities Have Higher Rates of Delays, Cancellations, and Diversions than Larger Communities, but DOT Data Provide an Incomplete Picture of These Trends
subsections: section_title: Airports in Rural Communities Have a Higher Rate of Delays, Cancellations, and Diversions than Larger Communities
paragraphs: The percentages of flights that are canceled or diverted have in recent  years been higher to and from airports in rural communities than large  metropolitan communities, according to FlightStats data. We  categorized airports based on the population size of their surrounding  communities to assess the extent to which flight delays, cancellations,  and diversions differ by community size. Our analysis of departure  cancellation and diversion trends, using FlightStats data for all reported  flights, shows that, since 2005, flights from airports in rural communities  (communities with less than 50,000 people) are on average about 3.5  times as likely to be canceled or diverted as flights from airports in large  metropolitan communities. For example, in 2010, cancellations and  diversions accounted for roughly 2 percent of flights from large, midsized,  and small metropolitan communities, compared with nearly 8 percent of  flights from airports in rural communities (see fig. 2). Greater  cancellation rates for flights departing rural airports were matched by  higher rates of cancellation for flights arriving at rural airports. (See app. II  for more information). Such cancellations and diversions can lead to long  overall delay times for passengers. According to one academic study, the  overall average delay time for passengers on canceled flights is about 5  hours.
The percentage of delayed arrivals—that is, flights that arrived at least 15  minutes late to their destination—has in recent years been higher at  airports in rural communities than airports in small, medium, and large  metropolitan sized communities, according to FlightStats data, though the  difference is not as substantial for delays as it is with canceled or diverted  flights. As shown in figure 3, while delays occurred in 19.6 percent of all  reported flights systemwide in 2010, delays occurred in 21.7 percent of  flights to airports in rural communities, a 2.1 percentage points or about  11 percent difference in the occurrence of delay. See appendix II for  arrival and departure delay trends since 2005. Such delays can lead to  longer overall trip times for passengers. According to academic research,  the overall average delay time for passengers on a delayed flight is 37  minutes.
DOT’s data on flight performance do not show similar disparities between  rural and other airports as do the FlightStats data because many flights  captured by FlightStats are not required to be reported to DOT. As a  result, DOT data provides an incomplete picture of delay, cancellation,  and diversion trends. DOT requires airlines with at least 1 percent of total  domestic scheduled passenger service revenue to report flight  performance data for flights they operate to and from reportable  airports. In 2010, 18 airlines reported data, which accounted for 22  percent of all commercial airlines, 69 percent of all scheduled flights, and  85 percent of all passengers. The approximately 31 percent of flights not  in DOT’s data are scheduled flights operated by airlines that are not  required to report. Some of these flights are those operated by regional  airlines for legacy airlines, and in general the airlines not required to  report to DOT are small and tend to provide much of the service to  airports in small metropolitan and rural communities. Therefore, DOT’s  data do not provide a complete picture of flight performance, especially at  airports in smaller communities. For example, according to DOT’s data for  2010, delays, cancellations, and diversions occurred in 19.6 percent of  flights to airports in rural communities and 20.2 percent of flights to  airports in large metropolitan communities. However, FlightStats’ more  extensive data show a bigger difference by community size, with 27.3  percent of flights to airports in rural communities delayed, canceled, or  diverted, compared with 21.6 percent of flights to airports in large  metropolitan communities in 2010 (see fig. 4).
Our analysis of FlightStats’ and DOT’s delay and cancellation data  suggests that airlines not required to report flight performance information  to DOT have higher delay, cancellation, and diversion rates than airlines  that are required to report. As figure 4 shows, delay, cancellation, and  diversion rates are higher, regardless of community size, when using  FlightStats data, as opposed to DOT data. FlightStats data includes a  greater percentage of all flights than DOT’s data, 98 versus 77 percent,  and data trends are similar for similar flights within each data set.  Therefore, airlines not required to report to DOT likely account for greater  rates of delays, cancellations, and diversions. According to FlightStats  data, in 2010, airlines that were required to report to DOT had lower  delay, cancellation, and diversion rates on average than the 20 largest  airlines not required to report to DOT.
This information corroborates what we were told by various stakeholders,  including airline officials and aviation researchers. According to  stakeholders that we spoke with, these differences may exist for multiple  reasons (see fig. 5). For example, airlines operating from smaller airports  may have limitations that affect their on-time performance, such as their  use of smaller aircraft, which can face greater restrictions during certain  weather events. As the DOT Office of Inspector General has reported,  airports in rural communities may have higher delay and cancellation  rates because the airlines serving them may have more limited resources,  such as spare aircraft and crew, at those airports than at metropolitan  airports. Furthermore, when FAA institutes traffic management  initiatives to meter air traffic to and from airports, airlines must choose  which of their flights to delay or cancel. According to previous academic  research and aviation stakeholders that we spoke with, airlines usually  prioritize flights by revenue, number of passengers, aircraft size, route  distance, and competition, or flight frequency. In cases where marketing  airlines control operational decisions for their regional partners, the  marketing airlines may disproportionately delay or cancel flights operated  by their smaller, regional partners because those flights tend to be  operated with smaller aircraft with fewer passengers and shorter routes  with less competition from other airlines. Our analysis of two legacy  airlines shows that their regional partners generally have worse on-time  performance. According to FlightStats data, in 2010, two large legacy  airlines canceled 1.96 percent and 1.51 percent of their own flights,  compared with 2.46 percent and 2.43 percent of the flights regional  airlines operated for them. While cancellations to smaller communities  may inconvenience a relatively small number of passengers, they may  result in long trip delays if those smaller communities have infrequent  service. See appendix II for more information on sources of delay and  cancellations.
DOT has historically not collected flight performance information from  smaller airlines because of the burden it has perceived would be placed  on these airlines. Without this information, though, DOT cannot provide  consumers with a complete picture of flight performance, particularly at  airports in smaller communities or for smaller airlines. More  comprehensive data would provide consumers with better information on  airlines’ performance. Requiring airlines with a smaller percentage of the  total domestic scheduled passenger service revenue, or airlines that  operate flights for other airlines, to report flight performance information  are two ways that would enhance DOT’s data. According to DOT officials,  they have considered reducing the reporting threshold from 1 percent of  domestic scheduled revenue to 0.5 percent to increase the percentage of  flights captured. This change, they estimate, would require an additional  12 airlines to report to DOT and increase coverage from about 85 percent  to more than 96 percent of all passengers. In its December 2009  passenger protections rule, DOT required airlines that are required to  report on-time performance data to DOT to include on-time performance  information on their Web sites for all flights for which their sites have  schedule information. In doing so, it rejected the concern that airline  publication of data from smaller code-sharing airlines on their Web sites  would be overly burdensome, and also noted that flight performance  information was necessary for consumers to make informed decisions  when selecting flights.
section_title: New Rule Has Nearly Eliminated Long Tarmac Delays but is Correlated with an Increase in the Likelihood of Flight Cancellations
subsections: section_title: The Number of Long Tarmac Delays Has Declined in Recent Years
paragraphs: Since 2004, tarmac delays of more than 3 hours peaked in 2007, three  years before the tarmac delay rule was implemented. The decline prior to  the imposition of the rule is likely the result of a combination of factors,  including fewer flights since 2007, runway and other improvements at  some airports, as well as voluntary limits adopted by some airlines on  how long their flights can wait on the tarmac. Tarmac delays of more than  3 hours, which occur as a plane is taxiing out of or in to an airport gate  (“taxi-out” or “taxi-in”), have historically been relatively uncommon,  accounting for less than 0.1 percent of all reported flights, according to  our analysis of DOT data (see fig. 6). The vast majority, about 97  percent, of tarmac delays of more than 3 hours occur during taxi-out  (departure), rather than during taxi-in (arrival).
The majority of all tarmac delays of more than 3 hours (180 minutes)  since 2004 are 4 hours (240 minutes) or less (see fig. 7). Specifically, of  the 6,740 tarmac delays of more than 3 hours reported from January  2004 through September 2010, almost 83 percent (or 5,579) were for 4  hours or less. However, given the length of some of these delays and the  inconvenience or even hardship they sometimes create for passengers,  tarmac delays have received widespread media attention (see app. IV for  examples of tarmac delays of more than 3 hours since October 2008,  when DOT began collecting more data on such delays).
Tarmac delays of more than 3 hours are generally clustered around  certain weather events, during specific times of the year or day, and at  specific airports. For example, tarmac delays of more than 3 hours most  often occur during summer thunderstorms or winter storms, when airport  departures are halted. According to our analysis of DOT data from  January 2004 through September 2010, almost two-thirds of all tarmac  delays of more than 3 hours occurred from May through September. Also,  these tarmac delays tend to be clustered on a select number of days.  According to our analysis of DOT data, almost 74 percent of tarmac  delays of more than 3 hours, from January 2004 through September  2010, occurred on about 7 percent of the days during this time period. For  example, on July 23, 2008, 113 flights were delayed more than 3 hours  on the tarmac across the national airspace system during taxi-out.  Tarmac delays also tend to occur in the late afternoon, when summer  thunderstorms are most likely, and after delays from the morning and  early afternoon are compounded. For example, since 2004, about half of  all tarmac delays of more than 3 hours occurred between 3:00 p.m. and  6:00 p.m. local time. Tarmac delays are also most prevalent at airports  that have high rates of delays. For example, about 55 percent of tarmac  delays of more than 3 hours since 2004 occurred at just seven particularly  congested airports. See appendix III for more details on these trends.
section_title: Tarmac Delays More than 3 Hours Have Been Nearly Eliminated Since DOT Implemented Rule
paragraphs: DOT instituted new rules in 2010 in response to instances of passengers  subject to lengthy tarmac delays, among other consumer-related  problems. Since these rules took effect in April 2010, tarmac delays  greater than 4 hours have been eliminated, and tarmac delays of more  than 3 hours nearly eliminated, reducing the hardship of long on-board  delays for some passengers. As mentioned earlier, these new rules  require, among other things, that covered airlines’ contingency plans  provide for adequate food and water on all flights once a flight has been  on the tarmac for 2 hours, except when safety or security preclude such  services. Additionally, for domestic flights, the rule requires that covered  airlines should not remain on the tarmac for more than 3 hours, with  exceptions for safety, security, and disruption of airport operations.  Violation of these rules can result in a $27,500 per-violation fine. Since  the rule went into effect in late April 2010, tarmac delays of more than 3  hours (180 minutes) have been nearly eliminated (see fig. 8). In the first  12 months since the rule went into effect, airlines reported tarmac delays  of more than 3 hours for 20 flights, compared with 693 over the same  period prior to the rule. Airline consumer groups we spoke with strongly  support the tarmac delay rule instituted by DOT.
A small number of flights have sat on the tarmac for more than 3 hours  since the rule went into effect, including four that resulted in violations  where airlines were warned. In the first 12 months after the  implementation of the rule, DOT identified 20 incidents where flights were  delayed on the tarmac more than 3 hours and determined that 11 of these  did not violate the tarmac rule, 4 were violations which resulted in a  warning to the airline, and 5 which are still under investigation (see app.
IV for a list of these flights). Twelve of these 20 flights were canceled  and none sat on the tarmac for more than 4 hours, according to DOT  data. DOT has not defined, in the regulation or elsewhere, what  constitutes a violation of the rule that warrants a fine, though DOT  enforcement officials told us that when determining whether to assess a  fine, as well as how much to assess, they consider, among other things,  the nature of the violation, the harm caused to passengers, whether the  delay was preventable, and the size and financial condition of the airline.  According to these officials, airlines are operating under the assumption  that a fine could be assessed at $27,500 per passenger because DOT’s  current authority allows for penalties at up to $27,500 “per violation,” a  phrase which is not defined in statute or regulation.
section_title: The Number of Flight Cancellations Have Increased Since DOT Implemented Rule
paragraphs: Overall, the number of flight cancellations have increased since the  tarmac delay rule was implemented, according to DOT data, though these  cancellations cannot be directly attributed to the rule. Our analysis of  cancellation trends examined flights during the last two summers, May  through September, 2009 and 2010 because they represent equivalent  periods of time before (2009) and after (2010) the implementation of the  rule. Furthermore, as noted previously, the summer historically accounts  for the majority of tarmac delays. While the number of scheduled flights  was similar in these time periods, total cancellations increased by 5,068  (see table 1). Total cancellations as a percentage of all flights increased  from 1 percent in 2009 to 1.2 percent in 2010, a 20 percent increase in  the rate of cancellations. Cancellation rates also increased for the subset  of flights that left the gate and then sat on the tarmac. For example, the  percentage of flights that were canceled after sitting on the tarmac for  between 2 and 3 hours (121 to 180 minutes) increased from 6.19 percent  in 2009 to 17.34 percent in 2010. As a result of challenges rebooking  passengers, such cancellations can lead to long overall delay times.
According to DOT, although cancellations have increased since the  tarmac delay rule was implemented, few, if any, additional cancellations  can be attributed to the introduction of the tarmac delay rule. DOT’s  analysis is limited, though, because it includes only a portion of all flights,  considers the total number of cancellations instead of the rate of  cancellation, and does not control for other factors that can affect  cancellations. In a March 2011 analysis of flight cancellations from 2009  and 2010, DOT found that, for the period from May through October, the  number of flights canceled after sitting on the tarmac for 2 hours or more  increased by six flights from 2009 to 2010. However, as indicated in  table 1, the number of flights that remained on the tarmac for more than 2  hours (121 or more minutes) declined by more than half—2,804 to  1,266—from 2009 to 2010. As a result, the rate of cancellation increased  from 2009 to 2010. DOT also did not control for the other factors, such as  weather, that can affect an airline’s decision to cancel a flight. When such  factors are not controlled for, the observed changes in cancellations, and  any associated costs, cannot be estimated. A complete consideration of  the costs and benefits of the tarmac delay rule cannot be conducted  without, at a minimum, controlling for these factors. Such a consideration  is important because, according to the Office of Management and Budget,  a fundamental indicator of a publicly acceptable rule is one in which  public benefits exceed public costs.
section_title: Airlines Maintain They Have Changed Decision Making in Response to Tarmac Delay Rule
paragraphs: Airline and other aviation industry stakeholders that we spoke with  maintained that the tarmac delay rule has changed how airlines balance  the trade-off between the extent to which flights are delayed and  canceled, and that this change has made flight cancellations more likely.  In particular, these officials told us airlines are more often taking actions  to avoid potential DOT fines, including returning flights to the gate after  taxi-out and, because of crew hour limits, limited gate availability, or the  severity in the underlying cause of delay, some of these flights may then  be canceled. Furthermore, when flights are delayed on the tarmac, airline  officials told us they are now deciding sooner than they did in the past  whether to taxi back in to the gate. A majority of the U.S. airline officials  we spoke with said that, once a flight is delayed on the tarmac,  communications between airline officials and air traffic control officials on  how to handle the delay, such as whether to wait or return to the gate  now starts after about an hour (see fig. 9). According to airline officials we  spoke with, uncertain taxi times for take off and the potential for million- dollar fines have made early decision making necessary because it may  take a significant amount of time for a flight to return to the gate, if  necessary. Additionally, within 2 hours, airlines must provide food and  water. Airline officials also told us that when flights have been on the  tarmac for 2 hours, the pilots begin executing a plan for either takeoff or a  return to the gate within the hour. According to one airline official, this  plan must then be carried out unless they are told by air traffic control that  takeoff is imminent. Officials from one airline told us that their decision to  return to the gate is sometimes put into action before the flight has been  on the tarmac for 2 hours. As a result, airlines are returning more flights to  the gate prior to takeoff. Our analysis of DOT data found that the number  of flights returning to the gate after waiting on the tarmac for at least an  hour has increased by almost 9 percent from May through September  2009 to May through September 2010, although it is not possible to  definitively attribute these changes solely to the tarmac delay rule.
In addition to stating that the tarmac delay rule is altering their decision  making during a tarmac delay, airlines maintain that the rule has  increased the likelihood that they will cancel a flight before it ever leaves  the gate. For instance, airline officials told us that they are precanceling  more flights prior to the scheduled departure time when long tarmac  delays are possible, such as during severe weather, than they did in the  past. According to an official from one airline, its precancellations have  increased by 10 percent since late April 2010, when the rule went into  effect. When canceling a flight before passengers have boarded the  plane, airlines have more control over where they position crew and  aircraft to resume normal operations the following day. According to one  major airline, precanceling also benefits flight crews and airport  employees because it gives airlines, airports, and passengers greater  flexibility in rescheduling flights, work, and personal activities.
section_title: Our Analysis Finds That the Tarmac Delay Rule is Correlated with an Increased Likelihood of Flight Cancellations
paragraphs: Since a variety of factors in addition to the tarmac delay rule may be  correlated with airline cancellation decisions, we developed logistic  regression models that control for several factors that are likely to be  associated with these decisions in order to measure the likely effect of the  tarmac delay rule. We used two models to analyze cancellations. In the  first (the tarmac-cancellation model), we assessed the likelihood of  cancellation for all flights that taxi-out from the gate. In the second (the  gate-cancellation model), we assessed the likelihood of cancellation for  flights before they leave the gate. Our analysis examined flights during  the last two summers (May through September 2009 and 2010) because  DOT began collecting more extensive data on tarmac delays that is  necessary for this analysis in October 2008 and, historically, the majority  of tarmac delays occur in the summer. Both models control for several  factors that are likely to influence airlines’ decisions about whether to  cancel flights, including weather at the origin and destination airport,  airline characteristics, and specific details of individual flights.  Nevertheless, other factors related to cancellations may not have been  fully controlled for. Additionally, since we used a variable indicating the  year as a proxy for the implementation of the rule in late April 2010, other  general changes in the environment across these two years which affect  how airlines decide whether to cancel a flight may not be fully reflected in  our model. See appendix V for a detailed discussion of the model  structure, a full list of independent variables, and our full results.
Results from the tarmac-cancellation model suggest that the  implementation of the tarmac delay rule is associated with a greater  likelihood of cancellation for flights that taxi-out onto the tarmac.  Furthermore, our results suggest that the greater likelihood of cancellation  increases with the time a plane stays on the tarmac. As shown in table 2,  we grouped flights into hour-long intervals, and for each group the  likelihood of cancellation has increased since the rule went into effect.
This correlation of the rule’s implementation with increased cancellations  appears consistent with what airlines have told us has happened.
Results from the gate-cancellation model also indicate that the tarmac  delay rule is associated with a higher rate of flight cancellation. In  particular, when the model controlled for other factors that may be  associated with an airline’s decision to cancel a flight, the likelihood of a  gate cancellation was 24 percent higher during May through September  2010 than it was for the same months in 2009 (see table 2). The gate- cancellation model also controlled for the same factors as the tarmac  model except for minutes on the tarmac. For both models, the tarmac  delay rule as well as the other factors we included generally had the  expected, and statistically significant, association with cancellations.
section_title: EU Requirements Provide More Comprehensive Passenger Protections, but May Also Increase Costs for Airlines and Passengers
subsections: section_title: Passenger Protections Requirements Are More Extensive in the EU than in the United States or Canada
paragraphs: Passenger protections requirements for flight delays, cancellations, and  denied boarding are overall more extensive in the EU than they are in the  United States or Canada. While all three regions have enhanced  passenger protections in recent years, EU care and compensation  guarantees are generally more extensive than those in the United States  or Canada. (Table 3 summarizes what airlines are required to provide  passengers for flight delays, cancellations, and denied boardings in the  three regions.) In April 2011, U.S. DOT further enhanced its airline  passenger protections by, among other things, increasing financial  compensation in the event of an involuntary denied boarding. The  Canadian Minister of Transport, Infrastructure and Communities launched  “Flight Rights Canada” in September 2008 to increase air passenger’s  awareness of their rights, which includes a voluntary “Code of Conduct of  Canada’s Airlines” which, among other things, recommends Canadian  airlines adopt specific provisions related to flight disruptions in their  contracts of carriage. In the EU, a regulation enacted in 2004 entitles  passengers to care and compensation, under specific circumstances, for  all three types of disruptions. Officials from the European Commission  (Commission) told us that these rules harmonized levels of customer  service across all EU member states and airlines, ensuring that  passengers can expect to be cared for and compensated if their flight is  canceled or seriously delayed or if the passenger is denied boarding.  Before the current regulation was put into place, according to these  European officials, some airlines were increasingly overbooking flights,  while providing little care or compensation to those inconvenienced  passengers who were denied boarding. The officials said that the goal of  the regulation was not to punish airlines for delays or cancellations, or  even necessarily reduce the number of disruptions, but rather to make  passengers “whole” when flights are disrupted.
In the event of a flight delay, the EU regulation requires that airlines offer  passengers care and, under certain circumstances, the option of  reimbursement or a return flight to the first point of departure, while there  are no U.S. and Canadian requirements with similar levels of care or  compensation. Under EU regulation, when a flight is delayed at least 2,  but less than 5 hours (depending on the distance of the flight), airlines are  required to provide passengers with certain types of care, including meals  and communication services, and if the delay requires an overnight stay  passengers must be offered hotel accommodations and transportation  between the airport and hotel. Furthermore, if the delay is at least 5  hours, passengers must also be offered reimbursement for the unused  portion of their ticket (and for the part of the journey already made if the  flight no longer serves its original purpose) and, if necessary, a return  flight to the point of departure. They must also be given written notice of  the rules for care and compensation. By comparison, passengers on  delayed flights in the United States and Canada are not entitled to care or  compensation by law.
In the EU, when a flight is canceled, the EU regulation requires that  passengers receive care in certain circumstances, compensation, and the  option of being rerouted or reimbursed (with a return flight to the point of  departure), while passengers in the United States and Canada do not  have such extensive rights. Passengers on canceled flights covered by  the EU regulation are entitled to the same rights as those passengers on  delayed flights (as described previously) and, additionally must be offered  the choice between being rerouted or reimbursed for part or all of their  ticket, depending on the circumstances along with a return flight to the  first point of departure at the earliest opportunity. In addition,  passengers on such flights are entitled to financial compensation, the  amount of which depends on the length of the canceled flight and may be  reduced by 50 percent if the passenger is rerouted, under certain  circumstances. An airline may be exempt from the obligation to pay  compensation if it can prove the cancellation was caused by an  extraordinary circumstance that could not have been avoided even if all  reasonable measures had been taken. At the time a flight is canceled,  the airline must provide passengers written notice of the rules for  compensation and assistance. By contrast, U.S. rules do not require  care and compensation in the event of a cancellation, but do, require  airlines to offer passengers a refund if they do not wish to accept and  travel alternative routes to their destinations. In Canada, passengers are  not entitled to care or compensation in the event of a cancellation, nor is  there a specific requirement that an airline refund a passenger their ticket  price, in whole or in part.
If a passenger is involuntarily denied boarding—generally because an  airline has oversold seats on a flight and cannot find enough volunteers  willing to take another flight—the passenger may be entitled to benefits,  depending on the region. Passengers on flights covered by the EU  regulation have a right to care and financial compensation.  Comparatively, passengers covered under U.S. regulations are entitled to  financial compensation and passengers in Canada are entitled to neither  care nor compensation except as provided under their contracts of  carriage. To limit the number of passengers who are involuntarily denied  boarding when a flight is oversold, airlines in the United States and the  EU are required to first request volunteers to relinquish their confirmed  space in exchange for benefits, such as credit for future travel, before  selecting passengers for denied boarding. When selecting passengers  for denied boarding, U.S. airlines are required to use boarding priority  rules that are in compliance with DOT regulations. Under both U.S. and  EU requirements, those passengers selected for denied boarding must be  offered financial compensation. Passengers in the EU also are  guaranteed the same care offered to passengers whose flights are  delayed or canceled and must also be offered the option of  reimbursement, in whole or in part, dependent upon the circumstances,  and a return flight to the first point of departure or rerouting the final  destination. In both regions, airlines must notify passengers in writing of  their rights.
Some airlines in the United States and Canada, as described earlier,  voluntarily include provisions in their contracts of carriage for care and  compensation beyond what is legally required for delays, cancellations,  and denied boarding. These provisions are enforceable as a legal  contract between the airline and the ticket holder. The airlines we spoke  with in the EU do not include any additional care or compensation beyond  the EU requirements discussed previously and the EU regulation does  not require airlines to include those requirements in their contracts of  carriage. We examined the contracts of the seven largest airlines in the  United States and found that five of these airlines may, in certain  circumstances, provide certain types of care, such as meal vouchers and  free phone calls, for delays and cancellations that extend beyond a  certain time (see table 4). Certain airlines also state in their contracts of  carriage that they must also provide hotel accommodations and ground  transportation, under certain circumstances, when an overnight stay is  required. The circumstances under which airlines provide these amenities  vary and may depend on a number of factors, such as the cause, length,  and timing of the flight disruption. All four of Canada’s major airlines have  added passenger protections for delays, cancellations, and denied  boarding in response to the 2008 federal government initiative mentioned  above, according to airline officials in Canada. Although airlines are not  required to adhere to passenger protection provisions outlined in the  initiative’s Code of Conduct, because all four of Canada’s major airlines  have added its provisions to their contracts of carriage, these become  part of the binding contract between the airline and the passenger. As a  result, these airlines now guarantee in their contracts of carriage that they  will provide passengers with a meal voucher if a flight delay exceeds 4  hours, as well as hotel accommodations and ground transportation if a  flight delay exceeds 8 hours and requires an overnight stay. If a flight is  canceled or a passenger is denied boarding, the airlines will rebook  passengers or refund the unused portion of the ticket. Flight Rights  Canada’s Code of Conduct does not make the airline responsible for acts  of nature or the acts of third parties.
Care and compensation requirements provide protections and benefits for  passengers whose flights are disrupted, but they also increase costs to  airlines and could increase passengers’ fares. Airline officials we spoke  with in the EU and the United States maintained that passenger  protections increase their costs, though they did not provide  documentation of specific cost increases because they consider the  information to be confidential. While data from airlines on these costs  are unavailable, a February 2010 study of the EU passenger protection  requirements noted that airlines the study authors spoke with reported the  cost of compliance for EU airlines ranges from 0.1 to 0.5 percent of  airlines’ annual revenue. However, officials from one European airline,  as well as officials from an airline association, maintained that airlines’  cost of compliance exceeds this estimate. Increases in required  compensation for passengers denied boarding have also increased costs  for both U.S. and EU airlines, according to airline officials we spoke with.  In the United States, officials with some U.S. airlines told us that  complying with the requirements to better inform passengers about  routinely delayed and canceled flights and to post information such as  flight on-time performance data on airline Web sites costs hundreds of  thousands of dollars. Officials with one of these airlines estimated that  airline personnel spent about 3 months adding the information at the  airline’s Web site. Some airlines in the United States and the EU told us  that compliance costs such as these can lead to higher fares. However, it  is very difficult to isolate the impact of compliance on fares because they  are set based on demand in competitive markets as well as other  factors.
Passenger protections can create financial burdens on airlines for major  events outside their control. For example, as noted above, airlines subject  to EU regulations are required to provide certain care in the event of a  delay or cancellation, regardless of whether the disruption was within the  airline’s control. These regulations require an airline to provide  passengers with food, lodging, and other care, dependent on the  circumstances, during short-term disruptions in travel plans. However,  when major disruptions to the airspace system occur, this requirement  can obligate airlines to provide passengers with lodging and other care for  extended periods of time at great cost. Such a situation occurred in  2010 when the European air transport industry was significantly affected  by the consequences of the Eyjafjallajökull volcanic eruption in Iceland.  The volcano, which erupted on April 14, 2010, created a cloud of volcanic  ash that drifted through large sections of European airspace. Volcanic  ash contains substances that may harm aircraft, so national authorities  decided to close affected airspace. As a result, more than 100,000 flights  were canceled and millions of passengers were unable to fly. In many  cases, the passengers were stranded in a foreign country without any  immediate possibility to go back home. Representatives of one EU airline  told us that when the eruption occurred, they booked more than 100,000  hotel rooms for their scheduled passengers and eventually chartered  aircraft to get passengers to their destinations. The airline’s  representatives estimated that the incident cost the airline about $4.5  million. Major disruptions generally result from unsafe flying conditions.  According to airline officials in both the United States and EU, the  possibility of large monetary claims as a result of such incidents could  pressure airlines to operate in conditions they would otherwise deem  unsafe for flight in order to avoid high costs, but according to Commission  officials there are no available data on the existence or extent of this  issue.
While increasing the compensation for denied boarding will increase  airline’s costs if airlines don’t change their booking policies, reducing  overbooking reduces revenues because fewer seats can be sold,  according to airlines officials we interviewed. Overbooking is a revenue- producing strategy for many airlines, without which some would raise  fares to offset their losses. Additionally, airline officials said that  reductions in overbooking could also limit the flexibility of passengers  when choosing flights, as seat availability would be reduced and airline  policies governing how and when passengers change their flights could  become more restrictive. However, we found little evidence that increases  in denied boarding compensation in the United States resulted in reduced  overbooking. According to airline officials we spoke with, the 2008  compensation increase in the United States was not large enough to  cause airlines to reduce their overbooking of flights. Additionally, from  2004 through 2010, the number of voluntary denied boardings in the  United States was less than 0.1 percent of all U.S. passengers boarded  annually, while the number of involuntary denied boardings rose slightly  but remained rare in relation to the total number of U.S. passengers, at  0.01 percent of all U.S. passengers (see fig. 9). In contrast, EU denied  boarding compensation, though in some cases less than U.S. levels, has  been significant enough to cause at least two EU airlines to reduce  overbooking of flights, according to officials from these airlines.  According to these officials, this reduction in overbooking has adversely  affected consumers through higher average ticket costs designed to  offset the increased number of unused seats on each flight. However,  data showing whether any such reductions in overbooking have caused  EU airlines to increase their fares are not available.
Extensive passenger protections, while providing benefits and guarantees  to passengers, can create challenges for the government entities  responsible for enforcing the requirements and for passengers in  obtaining benefits due to them. These challenges include difficulties  enforcing unclear requirements and ineffective passenger complaint  processes. Such challenges can limit the potential for the requirements to  mitigate hardships for airline passengers.
Government enforcement bodies in each region are responsible for  ensuring that airlines comply with their region’s requirements. DOT and  the Canadian Transportation Agency (CTA) serve as the enforcement  bodies for the United States and Canada, respectively. In the EU, each of  its 27 member states, and other countries that joined the EU aviation  market (such as Iceland, Norway, and Switzerland), establishes its own  body responsible for enforcing the EU regulation, which is typically the  agency responsible for aviation oversight. These enforcement bodies use  similar activities to monitor airline compliance, including investigating  passenger complaints and issuing penalties against airlines for  noncompliance. Enforcement bodies in each region receive passenger  complaints or information (for example, through a media report) about a  possible violation of passenger protections and decide whether to  investigate. DOT officials told us they will investigate any case alleging  a violation of a DOT rule, but will generally only pursue an enforcement  action against airlines if they discover a pattern or practice of violations or  the incident is particularly egregious. CTA officials and an enforcement  body official from one EU member state told us they investigate and may  pursue enforcement actions against an airline based on an individual’s  complaint. If officials determine that an airline has violated passenger  protections, they may fine the airline, depending on the region or the  member state. In addition to conducting investigations based on  passenger complaints, enforcement bodies in each region initiate  investigations. For example, DOT officials told us they routinely  investigate each major airline and their investigations have resulted in the  collection of fines. In two EU member states, officials from the  enforcement bodies told us they visit airports to see if airlines are  displaying required information about passenger protections, but have not  issued fines.
The first challenge to the effective application of passenger protections  arises when there is a lack of clarity in regulations. In the EU, where  passenger protection regulations are more extensive than in the United  States or Canada, officials from the Commission told us that different  interpretations of these regulations by enforcement bodies in different  member states have made it challenging to ensure successful  implementation of the regulation. A 2010 study for the Commission about  the impact of the EU passenger protection regulation found that more  needs to be done to ensure that passengers’ rights are properly  protected. In particular, the study noted that in some areas the rights  granted by the regulation can lead to different understandings. The  Commission also recently reported that “the novelty of some provisions of  the Regulation has led to different interpretations, and thus varied  application, among airlines and national enforcement authorities,  rendering it difficult for passengers and stakeholders to understand the  scope and limits of the rights set out.” Stakeholders told us, for  example, that the following two provisions were unclear and confusing to  implement, respectively:    Unclear definition of extraordinary circumstances. According to some  airlines, airline associations, and consumer groups we spoke with in  the EU, the definition of this term—which refers to situations in which  airlines are exempt from the passenger compensation requirement  when a flight is canceled—has left room for confusion. A recent  ruling by the European Court of Justice (ECJ) provided some  clarification for enforcement bodies when it ruled that technical issues,  such as an airplane malfunction, may constitute an extraordinary  circumstance only when these issues stem from events outside the  normal activities of the airline and are beyond its control. Even so,  some enforcement bodies are interpreting this ruling differently. For  example, officials from one enforcement body told us that even if a  technical issue is routine, they may still consider it an extraordinary  circumstance if they believe the safety risks were too great, whereas  other enforcement bodies in the EU have interpreted the ECJ’s ruling  more strictly.
Additionally, some stakeholders that we spoke with told us that the  extraordinary circumstance provision in the regulation should be  revised to restrict the amount of assistance an airline must provide to  passengers or to identify an extensive list of scenarios under which  the airline would be exempt from the passenger compensation  requirement. For example, officials from an airline and an airline  association told us that they believe the regulation should be  amended to exempt airlines from paying for weeks of hotel  accommodations and food (not just compensation) in response to  major disruptions, such as the Eyjafjallajökull volcanic eruption. In a  recent report, the Commision stated this incident illustrated the  structural limits of the regulation and that the “proportionality of some  current measures, like the unlimited liability regarding the right to care  under major natural disaster, may merit assessment.”    Confusion over definition of delay. Uncertainty about when  compensation is required for delays and cancellations has also  created enforcement challenges. In the EU, a November 2009 ruling  of the ECJ specified that passengers whose flights are delayed more  than 3 hours experience the same inconvenience as those whose  flights are canceled and therefore both should be entitled to the same  financial compensation payments from airlines. This ruling created  confusion in member states and within the industry as to when to  compensate passengers who have been delayed. Airline and some  airline association officials told us that this ruling contradicts the text of  the regulation, which, requires reimbursement (in part or in full), not  compensation, in the event of a delay of more than 5 hours. In the  United Kingdom (UK), according to Commission officials, the  International Air Transport Association, among others, filed a suit in  the UK Court of Justice against the UK’s enforcement body’s policy to  compensate passengers in line with the ECJ ruling. An official from  the UK’s enforcement body told us that the UK Court of Justice  submitted questions of law stemming from this case to the ECJ and  until the ECJ responds with further clarification, the enforcement body  has suspended all investigations into complaints on the topic.  Uncertainties over these provisions may make it difficult for airlines  and passengers to know when an airline must compensate its  passengers.
The challenges arising from the lack of clarity pertaining to passenger  protection regulations, such as the confusion about the definition of delay,  can be exacerbated when the EU requirement is applied unevenly across  jurisdictions. For instance, the enforcement of EU regulations has been  complicated because member states have flexibility in structuring their  enforcement to account for differences in their national laws and  policies. As a result, enforcement bodies in the Netherlands and  Germany, for example, use different sanction strategies for ensuring that  the airlines comply with the regulation, resulting in varying types and  amounts of penalties for airlines. In particular, the types of sanctions and  amounts of sanctions these enforcement bodies can impose differ  because of laws and policies specific to their member state. Officials from  the Netherlands’s enforcement body told us they can impose only  reparatory sanctions, which prevents them from collecting a fine if the  airline makes amends with the passenger, while the enforcement body in  Germany can issue repressive sanctions, which can be imposed  regardless of whether the airline makes amends with the passenger.  The amount of a sanction also differs between the two member states.  For example, the Dutch enforcement officials told us that there is no set  amount, but it must be reasonable and proportionate to the severity of the  violation, while in Germany, officials from the enforcement body told us  that the amount of a sanction is based on the seriousness of the  complaint. Different national laws affect the circumstances in which  sanctions can be issued. For example, the German officials told us that  German law prohibits them from considering ECJ decisions, such as the  ruling that passengers who are delayed more than 3 hours should receive  the same compensation as those whose flights are canceled, and  therefore the German enforcement body is not using the same standards  as other enforcement bodies to sanction airlines.
The second challenge to the application of passenger protections arises  when there is a lack of an effective passenger complaint process. The  enforcement processes of the EU, as well as those of the United States  and Canada, demonstrate challenges passengers can face obtaining  benefits due to them. When passengers in the United States, Canada, or  the EU do not receive benefits to which they believe they are entitled,  they can submit a complaint to any or all of three entities: the airline, the  national enforcement body, or the court system (see fig. 11). However,  according to government officials, passengers in the United States and  EU can receive financial compensation only through the airline or the  court. The enforcement bodies in these regions cannot award  passenger compensation because their authority does not extend to  enforcing payment by the airlines. The 2010 study for the Commission  of the regulation reported inconsistent implementation and enforcement of  the regulation across enforcement bodies and airlines. According to the  study, airlines and consumer groups reported that there are a number of  difficulties associated with passengers in the EU seeking compensation in  a court, including the costs, time burden, availability of small claims  courts, and limits on amounts awarded. In the EU, according to  Commission officials, passengers may pay for legal assistance when  pursuing compensation in the courts from a variety of sources, such as  from a consumer protection organization. In some member states,  passengers can also use the commercial claim service EU Claim, but  passengers must pay for these services with a percentage of what they  are awarded. Officials from one consumer group told us that when  barriers are imposed on passengers claiming their benefits for violations  of their rights, airlines may not comply with applicable requirements.  Furthermore, despite a number of EU government-sponsored campaigns  to inform passengers of their rights, several EU stakeholders told us  passengers may still not be aware of their rights and therefore may not  submit complaints if they believe their rights have been violated.
Additionally, officials from two consumer protection groups in the EU told  us that some passengers may be confused about their rights under the  EU regulation and some airlines may use that confusion to their  advantage.
section_title: Conclusions
paragraphs: Flight disruptions remain costly for passengers, airlines, and the  economy. DOT has responded by enacting regulations to protect  passengers in the event of tarmac delays and has enhanced involuntary  denied boarding protections. DOT’s tarmac delay rule has eliminated  delays greater than 4 hours and nearly eliminated tarmac delays of more  than 3 hours, thereby benefiting tens of thousands of passengers.  Increased compensation for involuntary denied boardings provides for  passengers in the event they are bumped from their reserved flight.
Although DOT’s rules have benefited some passengers, DOT’s current  flight performance data may not fully inform consumers of airlines’ quality  of service as intended. By collecting data only from the largest airlines,  DOT does not obtain and therefore cannot provide consumers with a  complete picture of flight performance, particularly at airports in rural  communities or among smaller airlines. Accurate flight performance  information is necessary for consumers to make informed decisions when  purchasing airline tickets.
Additional information and analysis are also needed to fully understand  the effects of the tarmac delay rule on passengers. Since the rule went  into effect, tarmac delays of more than 3 hours have been nearly  eliminated, with no delays of more than 4 hours, reducing the hardship for  numerous passengers. However, as our analysis has shown, the rule  appears to be associated with an increased number of cancellations for  thousands of additional passengers—far more than DOT initially  predicted—including some who might not have experienced a tarmac  delay. Though it is difficult to know how passengers might choose  between a long tarmac delay and a cancellation, and what costs and  burdens their choices would entail, determining the net benefit to airline  passengers resulting from the rule and assessing whether there is a  causal relationship between the rule and any changes in flight  cancellations will be critical to passengers and airlines. Additionally, our  analysis could only include data from the first summer of the rule’s  implementation, so using data through the summer of 2011 may yield  useful information for policymakers. In determining the impact of the rule,  it is important to include both the positive effects of reducing long on- board delays and the negative effects of flight cancellations on  passengers. Increases in cancellations may be at least partly due to  airlines’ assumptions about the significant enforcement penalties that  could result from a violation of the rule. Although DOT could issue  guidance on their penalty structure, it has chosen not to in order to  maintain flexibility under their current authority.
section_title: Recommendations for Executive Action
paragraphs: To enhance aviation consumers’ decision-making, we recommend that  the Secretary of Transportation take the following action:    Collect and publicize more comprehensive on-time performance data  to ensure that information on most flights, to airports of all sizes, is  included in the Bureau of Transportation Statistics’ database. DOT  could accomplish this by, for example, requiring airlines with a smaller  percentage of the total domestic scheduled passenger service  revenue, or airlines that operate flights for other airlines, to report  flight performance information.
To enhance DOT’s understanding of the impact of tarmac delays and  flight cancellations, we recommend that the Secretary of Transportation  take the following action:    Fully assess the impact of the tarmac delay rule, including the  relationship between the rule and any increase in cancellations and  how they effect passengers and, if warranted, refine the rule’s  requirements and implementation to maximize passenger welfare and  system efficiency.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a copy of the draft report to DOT for review and comment.  Senior officials at DOT, including the DOT assistant general counsel for  aviation enforcement proceedings, provided general comments in an e- mail representing DOT’s views on the benefits of the tarmac delay rule,  but did not provide written comments on the recommendations. In its  general comments, DOT stated that, in its view, available data  demonstrate that the tarmac delay rule provided effective consumer  protection for airline passengers. DOT officials believe that the rule made  clear to airlines that, whatever the rationale, it is not acceptable to leave  passengers in aircraft stranded on the ground for hours on end.  Specifically, DOT officials cited data that demonstrate the rule’s  effectiveness in preventing extended tarmac delays, including the  elimination of tarmac delays in excess of 4 hours, which dropped from  105 flights to zero for the year ending April 2011, completely eliminating  these most egregious of delays. Officials also highlighted the 98 percent  drop in 3-hour delays, from 693 flights to 20, during the same period.  DOT officials believe that these results demonstrate the positive impact of  the tarmac rule, and that without it, far more passengers would have been  subject to these extended delays. In response to DOT’s general  comments, we made changes to the report to better clarify our findings.
DOT officials said that the information in our report, in their view, further  demonstrates that airlines have gotten the basic message of the rule and  that it has been effective at putting consumers first when it comes to  avoiding lengthy tarmac delays. They cited our discussion of actions  airlines are taking to avoid tarmac rule violations, including acting more  quickly to address delayed flights and moving more quickly back to gates,  affording passengers the freedom to access the amenities of air  terminals. They were also pleased to see our finding that air carriers are  working to comply with DOT requirements to provide food and water to  passengers delayed on the tarmac for extended periods of time.
Finally, DOT reinforced its commitment to monitor the effects of the  tarmac delay rule to ensure it is achieving intended outcomes and to  address any significant unintended outcomes. DOT initially focused on  comparing the number of flights with 2-hour tarmac delays that are  eventually canceled because in its view this was the best measure of the  effect on cancellations from the rule. According to DOT, they recently  selected a contractor to conduct a comprehensive independent review  and analysis of the impact of the tarmac delay rule now that a full year of  data is available. DOT believes that, at minimum, one year of data is  necessary to assess the rule’s effects. DOT’s review will consider on-time  performance, cancellations, benefits to consumers, and other relevant  information covering the period back to 2000, to assess the rule’s impact  on flight delays, cancellations, and consumers. DOT also provided  technical comments, which were incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 7 days from the  report date. At that time, we will send copies to interested congressional  committees and the Secretary of Transportation. In addition, this report  will be available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or flemings@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: In this report, we examined how (1) trends in and reasons for flight delays  and cancellations in the United States differ for smaller and larger  communities; (2) the Department of Transportation’s (DOT) tarmac delay  rule has affected passengers and airlines; and (3) requirements and  practices for protecting passengers from flight delays, cancellations, and  denied boardings in the United States, Canada, and the European Union  (EU) have affected passengers and airlines.
To identify and compare the trends in and reasons for flight delays and  cancellations in different-sized U.S. communities, we examined trends at  airports designated as primary in fiscal year 2009. From this group of  367 airports, we excluded the 12 primary airports in U.S. terrorities  because they operate in different operational environments than other  U.S. airports. We then categorized the 355 airports by the size of their  surrounding community. We used geographic information system data on  the airports’ location and surrounding population. Airports were mapped  by the county they are located in and grouped into one of four categories  based on population: 1,000,000 or greater (large metropolitan), 250,000  to 999,999 (midsized metropolitan), 50,000 to 249,999 (small  metropolitan), and less than 50,000 (rural). This approach controls for the  fact that some small or medium airports—generally secondary airports  such as Hobby Airport in Houston—are actually in large metropolitan  regions. Using these categories, 78 airports were in large metropolitan  communities, 100 were in midsized metropolitan communities, 122 were  in small metropolitan communities, and 55 were in rural communities.
To analyze flight delay, cancellation, and diversion trends for these  different airport community size categories, we first obtained data from  DOT. These data were drawn from the Airline Service Quality  Performance System (ASQP), which includes information about flight  delays, cancellations, and diversions. ASQP data are based on  information filed by airlines each month with DOT’s Bureau of  Transportation Statistics (Office of Airline Information). Airlines with 1  percent or more of total domestic scheduled passenger service revenue  are required to report data for their flights involving any airport in the 48  contiguous states that account for one percent or more of domestic  scheduled service passenger enplanements. We then compared the  percentage of flights that were delayed, canceled, and diverted by  community size, by year.
Since DOT does not require all airlines to report on-time performance  information, we also purchased data from FlightStats, a private data  source from Conducive Technology that records flight performance  information for nearly all airlines and airports. We then conducted the  same analysis of delay, cancellation, and diversion trends by airport  community size as we did with ASQP data. We also verified DOT and  FlightStats data as comparable for similar categories of flights.
ASQP and FlightStats did not have data for all 355 primary airports  subject to our examination, because some airports may not have been  considered primary in other years of our analysis (very small airports may  drop below or rise above the 10,000 enplanements threshold year to  year). Furthermore, some airports may have more than 10,000  enplanements annually but generally not be commercial-service airports.  For instance, some military airports may have commercial flights diverted  to them on occasion. As a result, our analysis of the year 2010, for  example, included data for 281 airports using ASQP data and for 344  airports using FlightStats data. Using our community size categories, 76  airports were in large metropolitan communities, 99 were in midsized  metropolitan communities, 117 were in small metropolitan communities,  and 52 were in rural communities when using FlightStats data.
We also examined trends in sources of delay and cancellation, based on  DOT’s ASQP data as previously described, and compared these trends  by airport community size. FlightStats does not record the sources or  reasons for delays or cancellations.
To assess the reliability of ASQP and FlightStats data, we reviewed  documentation related to both data sources, and interviewed  knowledgeable officials at DOT and Conducive Technology about the  data. We also compared data for the same categories of flights in both  DOT and FlightStats databases, where possible, and found that they  were similar. After excluding certain ASQP flight records for our analysis  of tarmac delay trends, we determined that both ASQP and FlightStats  data were sufficiently reliable for the purposes of this report.
To better understand the reasons for any differing trends in and sources  of flight delays and cancellations, we reviewed a DOT Office of Inspector  General report and interviewed aviation industry experts, consumer  groups, industry associations, and representatives of three U.S. legacy  airlines and three low-cost airlines. For the U.S. airlines, we selected  three legacy airlines that served more than two-thirds of all legacy airline  passengers from 2004 through June 2010 and three low-cost airlines that  served more than 80 percent of all low-cost airline passengers from 2004  through June 2010. These six airlines served about half of all passengers  enplaned on U.S. airlines from 2004 through June 2010. See table 5 for a  list of aviation industry stakeholders, including airlines, interviewed for this  report.
To assess how DOT’s tarmac delay rule has affected passengers and  airlines, we first examined DOT data on tarmac delay and cancellation  trends since 2004. In order to identify the frequency of tarmac delays over  time, we used DOT’s ASQP data to identify all flights with tarmac delays  greater than 3 hours from January 2004 through September 2010. We  then analyzed these flights by year; month; time of day; and type of  tarmac delay, such as taxi-in and taxi-out delays (see app. III for more  information on these trends since 2004).
To better understand the effect of the tarmac delay rule on the likelihood  of flight cancellations, we assessed cancellations in two contexts. In the  first, we assessed the odds of a flight being canceled after it leaves the  gate. In the second, we assessed the odds of a flight being canceled  before it leaves the gate. In order to isolate the effect of the tarmac delay  rule, we analyzed flight data using models that controlled for a variety of  factors that can affect an airline’s decision to cancel a flight. Specifically,  we used logistic regression models to estimate the impact of the tarmac  delay rule on cancellations. Using these models, we were able to control  for other factors that may affect the likelihood of a cancellation, including  weather at the origin and destination airport, airport and airline  characteristics, and specific details of individual flights. Disruptive weather  is a major cause of cancellations, so by including variables in our model  for severe weather events, we were better able to isolate the rule’s  correlation with cancellations. Further, the size of the particular airport, as  well as the size and business practices of airlines, influence cancellation  decisions, so we controlled for certain characteristics of airports and  airlines. (See app. V for more details on our models.) To verify the  strength of our model, we discussed the models’ design and preliminary  results with aviation experts Professor Mark Hansen of the University of  California and Professor Lance Sherry of George Mason University. We  also spoke with representatives of U.S. airlines, industry associations,  consumer groups, and DOT about the impact of the tarmac delay rule,  including changes to airline practices.
Finally, to determine how the requirements and practices for protecting  passengers from flight delays, cancellations, and denied boardings in the  United States, Canada, and the EU have affected passengers and  airlines, we examined the laws, regulations, international agreements,  and voluntary commitments governing passenger protections in the three  regions. In particular, we reviewed applicable DOT regulations,  Regulation (EC) 261/2004, and relevant provisions of Canada’s Air  Transportation Regulations and the Montreal Convention. Additionally, we  examined government guidance and proposals for additional passenger  protections, including the Flight Rights Canada Initiative, European  Commission guidance for enforcement bodies, and Canada’s proposed  Air Passenger’s Bill of Rights. To describe voluntary passenger  protections offered by airlines, we reviewed the contracts of carriage for  nine largest U.S. airlines based on recent Federal Aviation Administration  (FAA) data on the number of available seat miles. We also spoke with  airline officials from three airlines in Canada and officials from three  European airlines. To further examine the affect that passenger protection  regulations have had on airlines and passengers, we interviewed airline,  industry association, consumer group, and government officials  throughout all three regions. We also assessed DOT data on denied  boardings from 2004 through 2010. To document how regions enforce  passenger protection requirements differently, we visited and spoke with  stakeholders in Canada and in the EU, which were selected based on  stakeholder comments and a review of a recent EC study on the  implementation of the EU regulation. In the EU, we selected The  Netherlands and Germany because each has a large aviation market as  well as active and effective enforcement practices, but which employ  different strategies. See tables 6 and 7 for a list of stakeholders we met  with in Canada and the EU.
section_title: Appendix II: Delay, Cancellation, and Diversion Trends
paragraphs: This appendix provides additional information and illustrations of flight  delay, cancellation, and diversion trends from 2005 to 2010, based on our  analysis of FlightStats data. It also provides information on airline- reported sources of delays and cancellations, based on our analysis of  DOT data.
section_title: Appendix III: Tarmac Delay Trends Since 2004
paragraphs: This appendix provides additional information and illustration of tarmac  delays of more than 3 hours, from January 2004 through September  2010, including how the tarmac delays that occurred during this period  were distributed by year, month, airport, day of the week, and hour. This  appendix also provides information on airline-reported sources of tarmac  delays. This information is based on our analysis of DOT data.
section_title: Appendix IV: Tarmac Delay Trends since October 2008
paragraphs: Beginning in October 2008, DOT required airlines to submit data on  flights with tarmac delays that were subsequently canceled, diverted, or  had multiple gate departures (see table 12). Previously, DOT had only  captured tarmac delays that occurred during taxi-out or during taxi-in.  While the majority of tarmac delays happen at taxi-out or taxi-in, the  change in reporting captured data for some additional tarmac delays of  more than 3 hours. As a result of these new reporting requirements,  tarmac delays are now captured    during taxi-out: the time between when a flight departs the gate at the  origin airport and when it lifts off from that airport (wheels-off);   during taxi-in: the time between a flight touching down at its  destination airport (wheels-on) and arriving at the gate;   prior to cancellation: flight left the gate but was canceled at the origin    during a diversion: the tarmac time experienced at an airport other  than the destination airport; or   as a result of a multiple gate departure: the flight left the gate, then  returned, and then left again; the tarmac time is the time before the  return to the gate.
section_title: Appendix V: Tarmac Delay Logistic Regression Analysis
paragraphs: This appendix describes two models that we designed to assess whether  DOT’s tarmac delay rule is correlated with an increase in airline  cancellations. Both models use data for the same months before and  after the rule went into effect to analyze whether and how a variety of  factors—including the imposition of the rule—are associated with the  likelihood (or odds) that a flight will be canceled. One model analyzes the  likelihood of cancellation after a flight has left the gate and gone onto the  tarmac; the other analyzes the likelihood of cancellation at the gate.  Specifically, this appendix discusses (1) the incidence of cancellations  since the rule’s implementation, (2) the conceptual framework for  examining these issues through modeling, (3) variable calculations and  data sources, and (4) the models’ results.
subsections: section_title: Incidence of Flight Cancellations in 2010 Relative to 2009
paragraphs: To examine the incidence of flight cancellations before and after the  tarmac rule’s implementation, we collected data on flights for May through  September in 2009—before the rule went into effect—and for the same  months in 2010, after the rule’s implementation. We examined the  incidence of cancellation for flights that were canceled after they left the  gate and went onto the tarmac, and for flights before they left the gate.  The data cover flights reported to the Bureau of Transportation Statistics  (BTS) at 70 airports in the continental United States.
Table 14 provides information, for the time frame of this analysis, on the  number of flights in each time period that left the gate and took off, and  the number of flights that left the gate but eventually were canceled. From  that information we calculate the odds of cancellation in each of the two  years. These odds equal the number of flights that were canceled divided  by the number of flights that were not canceled. For example, in 2009, the  odds of cancellation is (808/1,868,189), which equals 0.000433. Thus,  roughly 4 out of every 10,000 flights that exited the gate were ultimately  canceled in that year. Finally, we calculated the odds ratio of a flight being  canceled in 2010 compared with 2009, which is a ratio of the odds of  cancellation in 2010 to the odds of cancellation with 2009.
The data show that flights are rarely canceled after leaving the gate. In  both years, a very small fraction of flights that left the gate were ultimately  canceled. As noted, in 2009 roughly 4 flights (that left the gate) were  canceled for every 10,000 flights that took off. However, the odds of  cancellation for a flight that has left the gate did appear to rise in 2010  compared with 2009. The odds ratio is the odds of a tarmac cancellation  in 2010 divided by the odds of such a cancellation in 2009. The odds ratio  exceeds 1, indicating that cancellations were more likely to occur in 2010.  Specifically there was about a 24 percent increase in the odds of  cancellation in 2010 compared with a year earlier.
Because we hypothesized that the likelihood of cancellation for a flight  that has left the gate may be greater the longer it sits on the tarmac, we  assessed the odds of cancellation based on how long a flight sits on the  tarmac, as shown in table 15. These data reveal that in both 2009 and  2010, the odds of cancellation rise substantially for flights that have been  on the tarmac for longer periods of time. For example, in 2009 the odds of  cancellation for flights on the tarmac 60 minutes or less are only a small  fraction of a percent, but for flights on the tarmac for 121 to 180 minutes,  the odds rise substantially to 6 percent in that year. Using these odds, we  calculate odds ratios showing the relative odds of cancellation for each  hour category compared with the base hour (up to 1 hour of delay), within  each year. As shown, the odds ratios rise dramatically as more time  passes on the tarmac—a 42-fold increase in the odds of cancellation  when a plane has been sitting on the tarmac for 61 to 120 minutes  compared with a delay of 60 or less minutes in 2009.
These data provided in table 15 also reveal that for every “time-on-the- tarmac” category, the odds of cancellation in 2010 exceeded the odds of  cancellation in 2009 because all of the odds ratios (shown in the far right  column) exceed 1. We calculated these odds ratios by taking the odds of  cancellation in one tarmac time category in 2010 and dividing it by the  odds of cancellation for the same tarmac time category in 2009. These  data further show that the differential between the likelihood for  cancellation in 2010 over 2009 rose the longer a flight was on the tarmac.  While the odds of cancellation for flights on the tarmac for 60 or less  minutes were 25 percent greater in 2010 than in 2009, for flights on the  tarmac 121 to 180 minutes, there was a threefold greater odds of  cancellation in 2010 compared to 2009. Figure 20 shows how the relative  odds of flight cancellation in 2010 compared to 2009 increases the longer  a flight sits on the tarmac.
Finally, we calculated odds ratios to examine the relative odds of flight  cancellations at the gate in 2010 and 2009. Table 16 shows the odds of  cancellation each year and the odds ratio for gate cancellations in 2010  compared with 2009. The odds of a gate cancellation were 13 percent  greater in 2010 compared with 2009.
While the unadjusted odds ratios indicate that the likelihood of both  tarmac and gate cancellations increased in May through September 2010  relative to the same time period in 2009, this increase may or may not be  attributable to the tarmac delay rule in 2010. Many factors may contribute  to flight cancellations, and there could be an observed difference across  two years for a number of reasons. For example, weather events may  disrupt traffic more in one year than in another, or airline scheduling or  traffic patterns could change over time. To develop a model to examine  this issue, it is helpful to first consider whether there is any reason why  the tarmac rule might be correlated with flight cancellations. In particular,  what is it about airline behavior that could be influenced by the tarmac  delay rule?
When there are flight disruptions, airlines face a trade-off between the  consequences of delays they might incur and cancellations. For example,  when bad weather reduces airport capacity, thus slowing the rate at  which flights can take off or land at an airport, airlines must decide how to  ration their traffic. They can choose to hold to their schedule and fly all  their flights, but risk long delays. Alternatively, they can choose to cancel  some of their flights, thus mitigating the capacity constraint they face and  reducing the amount of delays for their remaining flights. Although airlines  have some control over these trade-offs, airport capacity—both in gate  space and on the tarmac—sometimes becomes so constrained that  cancellations are unavoidable. In managing these circumstances, airlines  attempt to minimize disruptions to passengers and costs to themselves.
How an airline makes decisions within the context of this trade-off will  vary among airlines depending on their business models and the  particular situation at hand.
The DOT’s tarmac delay rule requires airlines to limit the time flights  spend on the tarmac to less than 3 hours or face the possibility of a  substantial fine. Our hypothesis is that if the tarmac rule is associated  with a greater incidence of flight cancellations, this may occur because  the rule may have altered airlines’ calculus in analyzing the trade-off  between delay and cancellation. According to airline representatives we  spoke with, flights that sit on the tarmac for a significant period of time  may have to return to the gate to avoid a fine and, because of crew hour  limits or because of the severity of the underlying cause of the delay,  these flights may be canceled. In addition, airline officials and aviation  stakeholders told us that the rule has increased the likelihood that they  will precancel a flight—that is, cancel a flight before it ever leaves the  gate. First, if a flight is returning to the terminal to avoid a tarmac fine, a  flight that has not yet left the gate might need to be canceled to free gate  space for the returning flight. Airline officials also told us that they are  precanceling more flights before their scheduled departure time when  weather or other factors indicate that long tarmac delays are possible. We  were also told by one airline official that precancelations may be  preferable if a long tarmac delay seems likely because passengers are  likely to have more rebooking options if they are precanceled than if they  wait for some time on the tarmac and attempt to rebook later in the day.
There are several limitations to this analysis. First, important factors  related to cancellations may not be controlled for. For example, we do not  have information on flights that were canceled for mechanical problems.  This, along with other factors that might be relevant, could not be  controlled for because we do not have adequate data to assess all factors  that could be associated with cancellations. Also, the analysis provides a  suggestion as to the factors that are correlated with cancellations, but  does not necessarily suggest a causal relationship.
To isolate the correlation between the rule and cancellations, as well as to  better understand what other key factors are associated with the rate of  cancellations, we developed two models to examine whether the rule may  be correlated with a change in the incidence of flight cancellations.  Because we are estimating the likelihood of a discreet event—whether a  given flight is canceled—we applied a logistic regression (or logit method)  for the estimation. This method enables us to assess how each of a set of  independent factors correlates with the odds of a binary event—in this  case the cancellation or noncancellation of an airline flight. We examined  two contexts in which a flight may be canceled, after some time on the  tarmac or at the gate.
Tarmac-cancellation model. In the first model, we assessed whether  flights that left the gate were more likely to be canceled during May  through September 2010 than during the same time period in 2009.  Although the tarmac rule considers fines only for flights on the tarmac  more than 3 hours, our discussions with airline officials and experts  suggested that airlines begin to assess the risk of tarmac violation well  before prolonged tarmac delay begins. We grouped flights into hour-long  categories based on the amount of time a flight sat on the tarmac in order  to assess whether the length of time on the tarmac is associated with the  odds of cancellation. For example, if a flight sat on the tarmac for 72  minutes, we placed it in the 60 to 121 minutes tarmac time category. For  the tarmac-cancellation model, we assessed 3,715,219 flight records for  the 10 months included in the model; 1,799 of these were ultimately  canceled.
Gate-cancellation model. In the second model, we examined whether  flights were more likely to be precanceled after the rule went into effect. A  precancellation occurs when a scheduled flight is canceled before it ever  leaves the gate. Thus, even a flight that goes onto the tarmac but is later  canceled is treated as a flight that was not canceled at the gate in this  analysis. This model included 3,750,868 flight records, of which 35,649  were precanceled at the gate.
Many factors affect the possibility of a flight’s cancellation and, therefore,  we attempted to account for these other factors in the model. By  controlling for this array of other influences on cancellations, the model is  designed to determine whether the tarmac rule is independently  correlated with the odds of a flight being canceled. Based on our research  and discussions with airline representatives and academic experts, we  identified factors that contribute to flight cancellations, including factors  related to (1) the origin and destination airports, including circumstances  at those airports at the time a flight is scheduled to depart, such as  weather conditions; (2) characteristics of specific airlines and their  operations; and (3) the scheduled city-pair route and the individual flight.  Our hypothesis is that these same factors contribute to both types of  cancellations, although we do not expect that the relationship between  any of the factors and the odds of cancellation will necessarily be exactly  the same in the two models. Each specific variable and its data source  are discussed below.
The primary source of data for the model is flight level data from BTS’s  ASQP system. This system includes flight-level data, each record of  which provides an array of information about a single-leg flight, such as  the origin and destination airports, the date and time the flight was  scheduled to depart and arrive, the airline, the taxi-out time, cause of any  delay, and whether the flight was canceled. The BTS data form the level  of observation for the models—which is a given flight—and data from  other sources are merged into these observations. Airlines that account  for at least 1 percent of total domestic scheduled passenger service  revenue are required to file this flight information with BTS. Because this  required filing leaves out smaller airlines, not all flights are included in the  model. Moreover, our analysis includes data for 70 airports. The  remainder of this section describes the rationale for including each of the  variables in the model, how each is calculated, and the source of the  data.
The dependent variable. The dependent variable for the two models is a  dummy variable—that is a variable that takes a value of one or zero  depending on the presence or absence of some characteristic. For the  tarmac-cancellation model this variable takes a value of one if a flight that  left the gate returned to the gate after going onto the tarmac and then was  canceled, and otherwise takes a value of zero. For the gate-cancellation  model, the variable is set to one if the flight was canceled before taxiing  out from the gate and is otherwise set to zero.
Variable of interest: implementation of tarmac delay rule. In both  models, we include data on flights from May through September in 2009  and for the same months in 2010. Since the rule went into effect in late  April 2010, a dummy variable indicating whether a flight took place in  2010 is used. For the tarmac model we also include a set of dummy  variables indicating how long a flight was on the tarmac before taking off  or arriving back at the gate. We classify hour-long categories of tarmac  time: 0 to 60 minutes, 61 to 120 minutes, 121 to 180 minutes, and more  than 180 minutes, and include three dummy variables (using the 0 to 60  minute tarmac time as the reference category and therefore leaving it out  of the regression) to test whether cancellations become more likely with  longer tarmac times. Additionally, we multiply these three dummy  variables by the dummy variable indicating whether the flight took place in  2009 or 2010. Creating such interactions allows the measured impact of  the tarmac time on cancellation to be different before and after the  implementation of the tarmac delay rule. Thus, we include six time-on- tarmac dummy variables in the tarmac delay model.
Variables related to airports and conditions at airports. Several of the  independent factors that might affect the odds of a flight being canceled  are related to the airports at which a flight begins and ends and certain  conditions at those airports:    Dummy variables for congested airports. It is well known that certain  airports suffer more than others from congestion and delays. Because  some airports have more delay-related issues, we believe that flights  involving these airports may be more likely to be canceled, holding  other factors constant. In a previous report we found that, according to  FAA data, seven airports were the source of 80 percent of departure  delays. Because this issue could affect flights both on the tarmac and  at the gate, we use two dummy variables in both models to denote  whether a flight either started or ended at one of these seven airports.  We expect that flights involving these airports are more likely to be  canceled.   Endpoint airport weather conditions. One of the factors likely to  influence flight cancellations is the weather. Certain weather  conditions can disrupt an airport’s realized capacity level and cause  traffic to flow more slowly or even halt for a time. We obtained data  from the FAA for the National Oceanic and Atmospheric  Administration’s reporting of weather conditions for each hour at each  of the airports included in our model. The data source provided  information on the incidence of 32 types of weather conditions, such  as fog, snow, thunderstorms, and hail. Additionally, FAA ranks each of  the 32 weather conditions from 1 to 3 to indicate the impact of that  particular weather condition on aviation activity. For example,  thunderstorms can be highly disruptive to air traffic and is assigned a  value of 3, while rain is assigned a value of 2, and haze a value of 1,  indicating that haze usually presents only minor problems for air  traffic. Using these data, we developed two variables to denote the  occurrence of potentially disruptive weather conditions at the origin or  the destination airport around the time a flight was scheduled for  departure or arrival, respectively. In particular, to characterize the  weather at the origin airport, we designated the hour of scheduled  departure as the anchor timeframe, but we also took into account  weather conditions in the hour before and the hour after the  scheduled takeoff. This variable is set to 1 if a weather condition with  a value of 3 (a significant weather condition) existed at the origin  airport during the hour before, at the hour of, or the hour after the  scheduled departure time. Similarly, the second variable is set to 1 if a  weather event of value 3 occurred at the destination airport within the  3-hour window around the scheduled arrival time of the flight. Poor  weather is expected to be associated with a greater likelihood of  cancellation for flights already on the tarmac as well as those at the  gate.   Ground delays and ground stops. This variable considers whether  FAA has initiated programs to slow or stop traffic at an airport  because of weather conditions, congestion, or some other reason. We  obtained data on such programs—either ground stops or delays—at  all the airports in our sample, by hour, across the 10 months of our  analysis. Using the scheduled departure hour, we created two dummy  variables that were set equal to 1 if the origin or destination airports,  respectively, had any program in place to slow or stop traffic at the  hour that a flight was scheduled to depart. We expected that flights  affected by a ground stop or ground delay program would be  associated with greater odds of a flight cancellation both on the  tarmac and at the gate.   Airport on-time performance. A final measure that we included in the  model to capture how well each airport is handling its scheduled traffic  at a given point in time is the rate of the on-time performance. Data for  this analysis come from the Aviation System Performance Metrics  database maintained by FAA. We obtained on-time arrival and on- time departure performance information for the airports in the model  by hour. In the model, a variable for the on-time departure  performance for the origin airport is anchored at the hour of scheduled  departure. Similarly, another variable is constructed for the on-time  arrival performance at the destination airport. We expected that lower  on-time performance measures would indicate difficulties in flowing  the scheduled traffic and would thus be associated with a greater  odds of flight cancellation.
Variables related to airlines and their operations. Some factors that  might be correlated with the odds of a flight cancellation are related to the  airline that is operating the flight and how the flight fits into that airline’s  network:    Size of airline. Certain airlines may be more inclined to cancel flights  than other airlines. We separated airlines into three categories: the  legacy airlines, which are typically the larger networked airlines; low- cost airlines, which include Southwest and AirTran; and the smaller  airlines, such as regional airlines, that tend to fly shorter routes with  smaller aircraft and often operate flights for legacy airlines. We did not  include the third airline classification in the model; instead we use it as  the reference category against which the other two categories of  airlines are compared.   Airline hub. Many airlines operate a network through which particular  airports—called hubs—are used for the transfer of traffic so that a  larger number of routes can be served. Even though our model looks  at the odds of cancellation for a single leg flight and we do not  examine itineraries of more than one flight leg, an airline considers,  when deciding whether to cancel a flight, how its flights are  interrelated and how passengers transfer among them. If a flight takes  off from an airport that is a hub for the airline operating that flight, we  deemed this an origin/hub flight. Likewise, if a flight is destined to an  airport that the carrier of record states is one of its hubs, we  designated it as a destination/hub flight. If an airport is a hub for an  airline, we expect this could affect the decision about whether to  cancel a flight.   Average passengers per flight (on an airline-route basis). This  variable is designed to take into account the likelihood that airlines will  attempt to deliver as many passengers as possible to their destination  and so might be more inclined to cancel flights with fewer passengers  onboard when circumstances disrupt traffic flow. Because data were  not available on the number of passengers onboard each particular  flight, we used the average number of passengers for a particular  airline on a given route over the course of a month, divided by 10.  Thus, the results indicate the change in the odds of cancellation for  each additional 10 passengers on a given airline’s flight for that route.
Variable related to the route and flight. The following variables provide  information about the origin-to-destination route and the specific flight.    Route distance. Some past research has shown that airlines are less  likely to cancel longer distance flights. We placed routes in four  categories according to distance: less than 500 miles, and three  categories that were more than 750 miles. We did not include the  flights that fell into the 500 to 750 distance because it is the reference  category that other distance dummy variables are compared to.   Day of the week. Since traffic patterns vary across the days of the  week, particularly weekdays versus weekend days, we included a  dummy variable for flights that took place on the weekend. We  expected that weekend flights will be canceled less often than  weekday flights because less traffic is scheduled on the weekend  making a given set of circumstances on the weekend less likely to  disrupt traffic on these days.   Scheduled departure hour. Airlines may be more or less reluctant to  cancel flights at certain times of the day than at other times. For  example, canceling early flights may be less problematic because  there will be more options for rebooking passenger that day than there  would be later in the day. Additionally, airlines may need to consider  where an aircraft ends the day in preparation for the next day’s traffic,  and so may prefer not to cancel flights late in the day. We created four  categories for departure hours: overnight, morning, afternoon, or  evening. The afternoon category is not included in the model because  it is the reference group we compare the three other dummy variables  against.
Table 17 provides information on the source of data for each of the  variables.
This section provides results for both the tarmac-cancellation and gate- cancellation models.
We used output from the logistic regression model for the rule change  dummy variable and the six dummy variables related to time on the  tarmac to ascertain the relative odds of flight cancellations before and  after the implementation of the tarmac rule. Table 18 shows, based on the  model that controlled for other factors, how the odds of cancellation in  each tarmac time category in 2010 compared with the odds of  cancellation for the same tarmac time in 2009—specifically, we show the  ratio of those odds. In all hour categories of tarmac time, the odds of  cancellation were greater in 2010 than in 2009 because all of the odds  ratios exceed 1. Moreover, the differential in the odds ratio of  cancellations across the 2 years increased with the time a flight was on  the tarmac. For flights that were on the tarmac for less than an hour, the  odds of a cancellation were about one-third higher in 2010 than in 2009.  But the longer a flight remained on the tarmac the more the relative odds  of cancellation were greater in 2010 than in 2009. For flights with 61 to  120 minutes of tarmac delay, the odds ratio rose to 2.14, indicating that  the odds of a cancellation more than doubled in 2010 compared with  2009, and for flights with 121 to 180 minutes of tarmac delay, the odds of  cancellation more than tripled in that same time period. Finally, the odds  ratios in table 18 are very similar to those presented in table 15, indicating  that the inclusion of key variables to control for other factors did not have  much effect on our findings related to the tarmac rule.
Table 19 provides the odds ratios from the logistic regression model for  all other variables included in the tarmac-cancellation model. Some of the  key findings are:    Flights departing from or destined to an airline’s hub airport are less  likely to be canceled.   Flights in evening hours are less likely to be canceled than flights  departing in the afternoon.   Flights of greater than 750 miles are less likely to be canceled than  flights of 500 to 750 miles.   Flights are more likely to be canceled if the departure airport or arrival  airport is experiencing severe weather at or around the time of  scheduled departure or arrival, respectively.   Flights are more likely to be canceled if a ground stop or ground delay  was in effect at either the departure airport or the arrival airport at the  scheduled time of departure.
Table 20 provides the findings for the gate-cancellation model, which  assesses the likelihood of precancellations, adjusted to account for  factors other than the tarmac delay rule that may influence the incidence  of cancellation. One significant finding is that the odds ratio for the rule  change is substantially greater, when adjusted, than indicated by the  simple unadjusted odds ratio shown in table 16. The model results  indicate that the odds of gate cancellations rose by 24 percent after the  rule went into effect, whereas the simple result indicated only a 13  percent increase in those odds. This suggests that to understand the  independent correlation between the tarmac delay rule and likelihood of  gate cancellation, it is important to control for the other factors that are  likely correlated with such cancellations.
Findings from the gate-cancellation model suggest:    Gate cancellations are more common when a flight is departing from  or destined to one of the seven most congested airports in the U.S.   Gate cancellations are less common for flights scheduled to depart in  the evening, compared to flights departing in the afternoon.   Gate cancellations are more common when severe weather is  affecting either endpoint airport of a flight at the relevant hour.   Gate cancellations are more common for very short flights, compared  to flights of 500 to 750 miles in distance.   Gate cancellations are less common for flights of a more than 750  miles, compared to flights of 500 to 750 miles.   Gate cancellations are more common if a ground delay or ground stop  was in place at the origin or destination airport at the time of  scheduled departure.
In this case it appears that flights to an airline’s hub airport are more  likely to be canceled.
We ran the models using several other specifications, most of which  involved alternative variable specifications. These runs indicated that our  findings for the tarmac rule were robust across these specifications.  Alternatives included the following:    Variations on how the specific airlines were grouped. In the base case  we classified airlines into three categories: legacy airline, low-cost  airline, and all others. In an alternative specification, we classified  airline as large or small based on the number of enplanements.   Variations for characterization of origin and destination airports. In the  base case models, we included dummy variables to indicate that the  airport (origin or destination) was one of the seven most congested  airports in the United States. In an alternative specification, we used  62 dummy variables to indicate whether the airport (origin or  destination), was one of the 31 largest airports.   Alternative measure for poor weather conditions. In the base case, we  classified weather at endpoint airports as severe if a weather event  occurring around the time of the flight would be considered highly  disruptive to aviation activity. In an alternative specification we  included both severe and moderately disruptive weather conditions.   Alternative distance measure. In the base case, we classified distance  into broad mileage categories. In an alternative specification, we  entered distance divided by 100 as a continuous variable.   Elimination of flights that were canceled after a tarmac delay for the  gate model. For the gate model, we included flights that left the gate,  even if they were later canceled. We did so because the airlines were  attempting to get these flights off the ground when they were making  gate-cancellation decisions, and so we treated these flights as  nongate cancellations. In one sensitivity run, we eliminated any flights  that left the gate but were later canceled.
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Paul Aussendorf, Assistant  Director; Amy Abramowitz; Kyle Browning; Lauren Calhoun; Anne Doré;  Grant Mallie; Michael Mgebroff; Sara Ann Moessbauer; Josh Ormond;  and Melissa Swearingen made key contributions to this report.