If you've ever been to an airport you know how crowded they are. If you've even been to an airport on a weekend, during a holiday or in the last 6 months you've seen these delays get longer. Right now from car to take off you have no less than 4 major unpredictable delays. First check in (which can sometimes be bypassed using online confirmation), then security, next the gate, and then on the plane. On a bad day each of these can take upwards of an hour.
Think about that. 4 hours or more waiting in lines just to take a flight that will likely not even take that long. Something seems of about that. Lets use an example to illustrate this point. Two college students are traveling from Atlanta to Orlando for spring break. The first (who we will call Jane) decides to fly and the second (who we will call Jim) will be driving. For the sake of simplicity we will say that both own their own car. We will also assume that their wage is the same and $10/hr.
Jim's trip is fairly simple. He gets in his car and drives the 440 miles down I-75 to Orlando. His costs (excluding wear and tear on the car) include gas and time. At an average of 30 miles/gal and a gas price of $2.75/gal he will spend $80.66 in gas round trip. He will also spend 6.5 hours on the road each way for a total of 13 hours in the car. This makes his opportunity cost $130. Added together his total costs for the trip is $210.66.
Jane's trip is more complex. Removing any time spend driving to and from the airport, most of her opportunity cost is spent on the plane and in the airport. Let's first take the 4 hour estimate for in Airport departure costs. Add to this the 1hr 20min flight time each way. Let's say she has not checked luggage so there is no delay to get bags. This makes her opportunity cost $66.66. Now, say she used a discount travel website to get her ticket. She will spend $230 for a non-stop ticket. This makes the total of her trip $299.66.
That's a small difference, but it does cost Jane more. Now let's look at the same problem if Jane uses electronic check in and there are flight departure controls. What this does is removes the time spent in line for check in, at the gate and on the tarmac. This can reduce her wait time by up to 2.5 hours. We now have a cost for the trip at $274.66 for Jane, $64 more than Jim's as compared to $89 before the time savings.
Not bad, but now let's look at what happens if we make their wages $25/hr (which is the going rate for Post-Doc students). Jim now spends $405.66 and Jane $396.5 before the time savings. For the sake of argument these prices are the same. Now when we save Jane that 2.5 hours her total cost drops by a whopping $62.50 or 16%. That's a big efficiency gain.
The easiest way to achieve this efficiency gain is to fix departure times, meaning if a plane is scheduled to depart at a certain time it must depart. Currently there is no punishment for a delayed flight above a slap on the wrist. If this were any deterrent flights would never run late. The FAA is currently looking into fining late flights. Useful, but not a solution that will fly in the real world (pardon the pun). Perhaps a trade able permit system is the best response to this situation. Take for example a flight delayed 30 min due to mechanical problems. As the window for that plane's takeoff will have closed by then the airline must trade for another slot or use one of it's own to put the plane in the air. Now, as with any permit system, these slots are sold at auction and thus have value. By not using a slot the airline has just lost a substantial amount of money, and now must pay for another slot to get the plane in the air.
Now there are several obvious solutions to prevent this problem. First a direct trade with another airline for their slot. This creates the issue of flights leaving before their scheduled departure time. The solution to this is obvious, a FAA regulation that planes can not leave before their scheduled departure time.
Next, flight bumping. Airlines who have delayed planes that are full may cancel or bump flights that are less full off their scheduled times. This causes a chain reaction effect of several flights delayed flights. The solution to this is the imposition of transaction costs. For example, if the FAA charges a fee for every change in schedule then airlines would be piling up fees by bumping flights. In the case of cancellations there should be reciprocity to the passengers on top of this fee.
Finally, there may be hording. That is airlines buying blocks of takeoff times so as to buffer losses from bumping and to reduce unexpected costs. While this is a possibility, it also causes ticket price inflation which is a bad thing for consumers. Fortunately, as I have shown above, most flights are substitutable, so if prices climb to high other transportation routs are employed. Thus there is no legislation needed for the market to correct. Well, long run at least.
Oh, and before you worry too much about ticket prices, Airlines currently pay a lot of money to use the skies. This permit system would allow government and airport fees to be lowered and thus little if any effect should be felt by consumers.
Tuesday, September 11, 2007
Wednesday, July 25, 2007
Temperature Trends
The BBC is a fabulous resource for anyone who likes things that range outside of the Americas. In the field of science I consider it one of the best general resources for the novice. In this particular article I perused most of the information from which you will likely garner "We don't know" and "It might happen" in regards to the link between the wild climatic changes we've seen in recent months and the ever present threat of global warming. What you might miss is at the bottom of the page.
"Water on the ground cools the atmosphere around it a lot, and once this has dried out, the temperatures just accelerate. So there is some concern that these hot days may become more frequent over the next decade, but that is still uncertain."
Dr Haylock, who works for re-insurer PartnerRe in Zurich, Switzerland, and is formerly of the University of East Anglia's Climatic Research Unit, UK was quoted as saying.
Welcome
If you're reading this you probably already know half of what i'm going to say. Fortunately the other half is quite interesting. Remember, every story that's news worthy hides an even bigger story that's developing. I write on everything but you may find my posts lean toward the scientific and athletic persuasions. If this isn't your cup of tea, don't fret, we can't all be perfect.
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