System Costs of Flight Delays

Flight delays, for example, can be caused by mechanical problems, gate occupancy, or crew’s legality. Flights can also be delayed if safety issues arise due to severe weather or other causes. In the industry there have been many discussions about how to reduce flight delays while maximizing the utilization of aircraft with very tight connections between flights. Flight delays can be divided into three phases: delays on the ground at gate, delays while taxiing at origin or destination airport, and delays while airborne (en-route and holding).

When an aircraft is delayed, the airline suffers system costs, which include delay costs and buffer costs. The delay cost is the cost for the delay incurred on the day of flight operations, and the buffer cost is the cost of adding buffer time to schedule, which is planned in advance in anticipation of delays (Cook and Tanner, 2011). It is in the sense that schedules are designed with buffer time built into the schedules to absorb the unpredictability of delays in day-to-day operations. However, the schedule buffer minutes may reduce the number of aircraft rotations in a given day, and are the ‘hidden costs’ associated with airline schedules no matter whether they are fully used or not (Cook et al., 2004). Wu and Caves (2002) developed a cost minimization model to optimize the scheduling of aircraft rotation by balancing the use of aircraft and delay costs. The regularity analysis of the optimized schedule also suggested that the robustness and reliability of schedule implementation can be improved after optimization. Thus, taking into account both the profitability of a schedule and the propagation of delays in operation presents an important opportunity and is

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also a challenge for airline planners.

The elements of system costs are shown in Table 2.2. The delay costs include ‘aircraft delay costs’, comprising of fuel costs, maintenance costs, crew costs, and aeronautical charges, and ‘passenger delay costs to airlines’. The buffer costs, on the other hand, include ‘aircraft delay costs’, summing only fuel costs, maintenance costs, and crew costs, and ‘fleet costs’.

Table 2.2 Elements of system costs

Cost Element Delay Cost Buffer Cost

Aircraft delay costs

Fuel costs  

Maintenance costs  

Crew costs  

Aeronautical charges 

Passenger delay costs to airlines 

Fleet costs (depreciation, rentals, and leases) 

2.4.1 Aircraft Delay Costs

The aircraft delay costs are the costs of an aircraft incurred during the delay of daily operations. The elements of the costs, following the studies of Wu and Caves (2000, 2002, 2004), are discussed as below.

● Fuel Costs

The fuel costs of delays depend on the fuel burn rates of aircraft types, the fuel price, and the phase where the flight is delayed. A flight delayed on the ground at gate (with APU and engines off for majority of time) is with fuel cost taken to be zero, while the fuel cost of delay per minute en-route and airborne holding is much higher than that at taxi. In calculation of fuel costs, the value of buffer costs is taken to be the same as that of delay costs (Cook et al., 2004).

●Maintenance Costs

The marginal maintenance costs incurred by delayed aircraft during operations relate to factors such as the mechanical attrition of aircraft waiting at gates or accepting longer re-routes to obtain a better departure slot (Cook and Tanner, 2011). As described in the report of Cook et al. (2004), Airbus

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indicates that 65% of the typical maintenance burden for short-haul operations can be allocated to airframe plus components and the rest of the burden can be allocated to powerplants. The phases, such as takeoffs and landings, are where there is a very high proportion of wear and tear on the airframe and powerplants. However, no delays will be experienced during a takeoff roll or landing. It also indicates that the maintenance cost per minute in airborne operation is approximately twice the value of the ground cost per minute because most of the time spent on the ground is at the gate with engines and auxiliary power unit (APU) off. There will be relatively little wear and tear on the airframe at this ground operation phase as well. Whereas the maintenance costs in delays are related to aircraft utilization and treated as marginal costs, the maintenance costs of using buffer minutes are treated as unit costs, including the costs related and unrelated to aircraft utilization.

●Crew Costs

The crew payment schemes vary greatly among airlines. It can be based on calculations taking into account total duty hours, flight duty hours, time spent at outstations (with corresponding allowances), overtime hours, experience and rating. Accordingly, it is a difficult matter to assign crew costs to particular incidences of delays (Cook et al., 2004). Airlines could suffer no additional cost for delays in some cases. For example, with payments made on a sector-flown basis, an airborne delay would have no effect on crew cost as this payment is based on cycles flown. Similarly, an at-gate delay would have no effect on crew cost paid by block-hours as this payment is based on the operational time between gates (Cook and Tanner, 2009). The marginal crew costs in delays can therefore range from zero extra costs to possibly substantial overtime payments.

On the other hand, the crew costs involved in scheduling of buffer minutes are treated as unit costs, which include the costs related and unrelated to aircraft utilization. Hence, the crew costs such as fixed salaries and pensions, amortization of training costs, and insurance, which do not change as a result of flying hours, can only be assigned as buffer costs.

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●Aeronautical Charges

The aeronautical charging systems are in many instances imposed and governed by the national authorities. These charges (e.g. landing charge, parking charge, aerobridge charge) are applied in different ways at different airports, depending on the facilities and services provided. Thus, a departure delay at one airport may increase an airline’s aeronautical charges, whilst it may not have an effect on the aeronautical charges at other airport. Taking parking charge as an example, it may be charged according to the length of time parked (per 15 minutes, per hour, or per 24 hours), with or without certain free-parking period. Under this circumstance, whether an airline has to pay more parking charge for a departure delay is subject to the length of time delayed and the free-parking period provided by the airport. Whereas the aeronautical charges of delays are calculated as marginal costs, it is assumed that there is no extra aeronautical cost to be incurred for buffer minutes.

2.4.2 Passenger Delay Costs to Airlines

Passenger delay costs to airlines are treated as marginal costs and comprise

‘hard’ and ‘soft’ costs. The hard costs are such as the costs for re-accommodation (rebooking/rerouting passengers, ticket reimbursements and compensation) and care (meal vouchers, hotel accommodation, frequent-flyer program miles) (Cook et al., 2009), and are difficult to fully ascribe to a given flight due to accounting complications (Cook and Tanner, 2009). The soft costs may incur on the occasion that a passenger is dissatisfied with a delayed flight originally booked and decides to take an on-time flight of another airline. Thus, soft costs can be considered as the potential loss of revenue in future market share as a result of unpunctuality (Cook et al., 2004; Cook and Tanner, 2011).

Passenger delay costs can also be estimated through the ‘value of time’ of passengers, which is considered as the opportunity costs to passengers.

However, this estimation is not addressed in this research.

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2.4.3 Fleet Costs

Fleet costs refer to the costs of depreciation, rentals, and leases of flight equipment, which are determined by service hours and are very weakly related to utilization. Therefore, these costs are wholly allocated to the costs of buffer time as unit costs, and are unchanged by the delay outcome. If an airline leases most of the fleet, there will be very low depreciation costs. Conversely, an airline will have relatively low rental costs if it owns most of the fleet (Cook et al., 2004; Cook and Tanner, 2011).

Using cost minimization model, the relationship between the use of buffer time to control schedule punctuality and the delay costs imposed on passengers and airlines was investigated in the studies of turnaround operations (Wu and Caves, 2000, 2004). On the other hand, the effect of using buffer time on the reliability of aircraft rotation schedule was explored by Wu and Caves (2002).

To manage flight delays, airlines are prepared for the unexpected stochastic events of turnaround and block operations. Nevertheless, there seems a lack of good tools to measure the effectiveness of the delay improvement schemes.