R.W. Mann & Company, Inc.

Airline Industry Analysis and Consulting

Scheduling-Induced Congestion or "ATC Delay"?
Flight              Destination                            Status
1972  New York/LaGuardia Delayed
    98  Boston/Logan Intl. Delayed
1664  Providence/T.F. Green Delayed
    48  Paris/Charles DeGaulle, FR Delayed
    54  Sao Paulo/Guarhulos, BR Delayed

[original article published 09/03/1999 in Aviation Daily]

Opinions on Current Issues


The media's recent airline industry focus recounts what are now all-
too-familiar stories of congestion, rolling delays, air rage and strained
customer relations. Perhaps most disturbing, from the standpoint of
solving any of these problems, the media also report the industry's
penchant for laying blame elsewhere. While environmental and external
influences undoubtedly contribute to a lag in air traffic control
capacity growth, the airline industry has itself to blame for the majority of
today's "system" delays and resulting passenger anxiety and backlash.

Boiled down to basics, the media focus offers vignettes on the
extent to which post-deregulation airline industry profit optimization has
consistently hammered customer comfort, business consumers' wallets and
employee motivation, in the hopes of engorging option holders' (e.g.
executives') paper wealth.

To be sure, airline deregulation and the optimization it enabled
has offered leisure customers bargains and business customers network
growth, to and from hubs. The high price of this change, however, has been an
increase in customer and employee anxiety from higher load factors,
compounded by reduced aircraft size and related service demands, the
commoditization of coach service and substantial real-dollar air fare
increases for business consumers.

Add to this continuing job insecurity among many front-line
employees, due to more than a decade of outsourcing, downsizing and,
more recently, domestic and international code-sharing and alliance-related concerns.

Not that FAA is faultless. Sure, it's embarrassing in 1999 to see
vacuum tube failures strangle the ATC system. Greater airports would be
nice to have, as well. But let's face it, the congestion problem is
largely of the industry's own making, the result of a consistent
strategic push outside the capacity envelope.

The record shows:

-- unrealistic hub scheduling, designed for competitive advantage, demands
terminal airspace and airport capacity that does not exist;

-- slower en route cruise speeds, designed to reduce operating costs,
produce greater system dwell time;

-- increasing numbers of small jet-for-turboprop substitutions,
designed to produce competitive advantage and lower costs, generate increased en
route congestion above FL240 and terminal/transition airspace congestion where
delays already are endemic.

All of these measures are producing demand-side, airline-induced
delays everyday. They do not result from widely complained-about FAA
capacity contractions due to new system introduction, Y2K work, vacuum
tube or power supply failures. All of these measures are blindly designed to
reduce an individual operator's costs, maximize his revenue and improve
his profitability, with little consideration for the collective industry

Instead of laying blame elsewhere, the airline industry, individual
carriers and the Air Transport Association need to step up and tackle
aspects of travel - aspects they alone control - that create anxiety
among customers and employees. These include a coordinated, constructive,
self-examination of self-induced, scheduling-related delays, lengthier
passenger dwell times in terminals (origination, connection and baggage reclaim
on arrival), airport service staffing levels and use of less experienced
and motivated third-party employees in many sensitive customer contact areas
(e.g. security, airport service), and above all, rationalization of
ancient baggage separation/reclaim and boarding/deplaning processes.

Progress in these "final frontier" areas, and there is progress to
report by such innovators as Alaska Airlines, AMR and Southwest, will
allow airlines the luxury of further optimization without wholesale revolt on
the part of customers, employees and, ultimately, investors.

Sure, we - industry and passengers - would like to see more
capacity growth and fewer vacuum tube failures in the system, but let's not
blame FAA with congestion that airlines themselves cause and could rectify
through realistic and enlightened practices.

Problem Solving Requires Candor

Now, courtesy of the Air Transport Association, which ought to be
carving out a position as an independent problem solver, the ATC delay
"who dunnit" debate continues. While FAA has acknowledged it can
manage differently for greater efficiency and the industry will
eventually achieve a resolution, progress will only be facilitated when
parties to the debate do so with candor.

Airlines enjoy unprecedented immunity from anti-trust, despite this,
several carriers operate under consent decrees relating to pricing.

ATA's statements on carriers' inability to coordinate schedules, slots
and facilities in the planning process, to reduce delays are simply incorrect.

For example, since 1997, in the Collaborative Decision Making ("CDM")
project, ATA and eight major carriers' System Operations Centers
participate with FAA, DOT, NASA/Ames, the Volpe Center and
private industry in coordinating schedules in real-time to reduce delays.

For some reason, until this issue was raised by this author, no airline had
attempted to coordinate schedules to reduce delays in the planning process.
In October 1998, American and United requested guidance from the U.S.
Department of Justice to coordinate their Chicago/O'Hare schedules for the
purpose of reducing delays.  In their filing, AA and UA acknowledged their
scheduling exceeded the airport's capacity.

A good start, even if it required some prodding...

Likewise, ATA statements that hub-and-spoke scheduling does not create
congestion and that 50-seat jets are replacing 19 seat turboprops, are
simply incorrect. Common sense, logic and the facts show otherwise.


ATA lacks candor when it suggests air carriers cannot coordinate
schedules. In fact, they have done so for decades and require no
regulatory imprimatur to do so, even if they have asked (above).

In 1985, FAA granted US air carriers airport operating slots at High
Density Rule airports based on what they then operated. Since then,
carriers have engaged in a private process of allocating those slots,
coordinating schedules. Outside of HDR, airlines routinely negotiate
for terminal facilities use, alter schedules and allocate scarce
resources without regulatory scrutiny.

That this is an airline-run process is criticized by new entrants, as
when Valujet was unable to secure LaGuardia slots to operate Atlanta
service, despite their initial availability from TWA. Congress
continues to legislate slots for new entrants and enhanced services,
precisely because of incumbent carriers' hammer lock on the slot and
facilities pools.

Outside the US, since 1946, under IATA cartel auspices, air carriers
have engaged in air carrier-coordinated scheduling exchanges, not to
mention pricing, direct with other airlines, facilitated by airline
member-led committees. These processes are so vetted that a segment of
the software industry serves schedule coordination interests.

The 104th IATA schedules coordinating meeting held in June 1999 in Miami
was overseen by air carrier representatives, including members from AA,
DL and UA. Far from an 'open meeting', attendance by other than
airlines and airport representatives is discouraged.

ATA asserts "the market defines schedules and the public expects to be
able to fly when they wish".  I have not once been asked by an airline
when I would like to fly, and I bet you haven't either -- even if you
work in Congress. I fly at times chosen by the airline, for the convenience
of meeting their hub schedules, and so do you, unless you have bought
into Warren Buffet's 'NetJets'  fractional jet ownership program.

The cause of delays is an airline industry scheduling outside available
system capacity, not as ATA has tortured the debate, the public's
expectation that FAA will create system capacity to satisfy every
possible demand, because in part, no one asks the public!


With the facts of air carrier schedule coordination now known, does
anyone believe ATA's assertion that hubs don't generate terminal
airspace congestion? I thought not.

Visualize a hub: multiple spokes, concentrating feed and flow traffic,
converging at a point in 4-D (four dimensions, time and space), a times
creating demand for airspace, runway and terminal capacity that does not exist.

And this assumes 'on time' operation.  The delay problem becomes much
worse in adverse weather and 'off schedule operations' (OSO).  Many
carriers devote substantial, unpublicized effort to managing OSO, because they
know that their ability to maintain schedules is marginal under anything but
ideal conditions.

In fact, a subset of Operations Research/Management Science and
simulation software industries serves the commercially-driven interests
of those carriers creating the congestion. Their objectives: trying to
reduce congestion costs, while maintaining or increasing traffic and
revenue. One can hardly imagine a commercially driven software industry
where no problem existed, but I suppose ATA would have us believe this.
Their endorsement of real-time CDM (above) and carrier participation suggests

Small Jets

And how about those 50 seat jets replacing 19 seat turboprops! Tripling
capacity and doubling trip operating costs in the thinnest of feed
markets? An unlikely formula for success at "Air ATA", wouldn't you say?

One would hope for greater candor, but ATA knows this is a hot potato
that requires lots of "spin" if not grease. Their posturing on this
issue strikes to the heart of ongoing debates on scope and industry
structure. In fact, the 19 seat business began to dry up in 1993 and
outside the big four major networks, completely dried up after 1995.
In fact, 50 seat small jets are replacing 30-68 seat turboprop equipment,
which often replaced 100 seat mainline jet equipment earlier in the decade.

Hence the scope and structure issues ATA hoped to avoid.

Candor, anyone?

I return to my original thesis: if we want the airspace/facilities
capacity and ATC delay problems resolved, airlines, their trade
association (in ATA's defense, they probably just do what the airline
management dues-payers tell them) and FAA must acknowledge their parts
in producing congestion.

FAA is doing their part. Failing participation by carriers, however,
we are doomed to live with a worsening delay problem.

So, candor anyone?

Let's solve the problem.

Or shall we just wait?  As we surely will, come Summer 2000.