Where Did the Time Go? On the Increase in Airline Schedule Padding Over 21 Years

27 Pages Posted: 3 Sep 2018

Date Written: August 24, 2018

Abstract

About 43 million US domestic flights operated on routes that were serviced consistently by the same airlines from 1997 to 2017. The scheduled duration of these flights, as posted on computerized reservation systems, increased on average by 8.1% over the 21-year span. Where did the time go? Building on Deshpande and Arkan (2012), we develop a multi-period newsvendor model of how airlines decide their posted duration and show that the model can be reduced to a series of single-period newsvendor problems. The model explains more than 99% of the variation among the 43,062,886 posted flight durations in our data. We use structural estimation and counterfactual analysis to establish that more than 45% of the increase in posted duration stems from airlines strategically padding their schedule to achieve higher on-time performance. We also provide evidence that decreased airline competition on a route is associated with increased strategic padding.

Keywords: Time, Empirical Newsvendor, Structural Estimation, Airline Operations

Suggested Citation

Zhang, Dennis and Salant, Yuval and Van Mieghem, Jan Albert, Where Did the Time Go? On the Increase in Airline Schedule Padding Over 21 Years (August 24, 2018). Available at SSRN: https://ssrn.com/abstract=3238457 or http://dx.doi.org/10.2139/ssrn.3238457

Dennis Zhang

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Yuval Salant

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Jan Albert Van Mieghem (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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