| Summary |
Serious flight delays have led the US Congress to pass the On-Time Disclosure Rule, hoping to incentivize airlines to improve delays by publishing on-time information of airlines, but it may cause airlines to use schedule padding to extend the scheduled block time. Related papers said the scheduled block time has an increasing trend after the promulgation, and nearly 50% of the increase is due to schedule padding, which brings billions of passenger welfare losses every year.
In the past, most of the literature related to schedule padding focused on discussing the factors that may affect schedule padding, and few measured the impact of schedule padding on passengers. In this study, the scheduled block time is divided into the actual block time and the actual block time variable to explain the impact of the two on the demand of travelers. Referring to Hsiao and Chen (2019), set the choice set as all the route-airline between the origin and destination "Metropolitan Areas (Cities)", establishes the traveler's choice of nest Logit model.
The results of the nested logit model using instrumental variables are more reasonable, the variables are all significant and meet the expected signs. The coefficients are calculated to time values. The time value of schedule padding time whose calculation standard is that the 20th percentile is 29.76 US dollars/hour, comparable to the median hourly wage in 2019 and the ratio is 106%.
Schedule padding time with the 20th percentile calculation standard measures the welfare, causing $400 million to $900 million welfare losses per quarter. However, the welfare loss due to the per-trip schedule padding for different calculation standard may range from $5.5 to $12.5/trip (30th percentile calculation standard), $7 to $9.5/trip (20th percentile calculation standard) or between $9.5 and $12.5 per trip (10th percentile calculation standard), which may be the estimated range of benefits due to schedule padding per trip.
Schedule padding will also vary according to the characteristics of the origin and dest city-pairs. The origin and destination city pairs are divided into short, medium and long-distance markets. The origin and dest city-pairs in the long-distance market will cause greater welfare losses to the per trip schedule padding, ranging from $20 to $42/trip. In the short-haul market, welfare losses to the per trip schedule padding ranges from $10 to $30/trip, and the medium-haul market ranges from $15 to $33/trip.
According to the number of effective competitors, the origin and destination city pairs are classified into different levels of competition, and the market with higher levels of competition has greater per trip schedule padding time welfare losses ranging from $8 to $17/trip. The market with medium levels of competition has $7 to $16 per trip schedule padding time welfare losses, and The market with lower levels of competition has $6 to $16 per trip schedule padding time welfare losses. |
