04/27/2011 01:41 pm ET Updated Jun 27, 2011

DOT's Three-Hour Rule Works

April 29, 2011, marks the first anniversary of the DOT's Three-Hour Tarmac Rule. When the rule was implemented, the airlines, particularly the Airline Transport Association, predicted dire consequences. There was much wailing and gnashing of their collective teeth as they warned of massive cancellations to avoid the potential fines imposed by the rule.

Recently, a couple of newspaper articles -- a less generous person might suggest ATA-inspired articles -- asserted that the rule has, in fact, caused massive cancellations, and that its unintended consequences far outweigh the protections provided by the ruling. One was in the NJ Star-Ledger. They do note that the rule has been brilliantly successful. In the eight months following the rule's implementation, long tarmac delays totaled 16, as compared to 584 in the same period in 2009.

These articles looked at 2010 cancellations compared to those of 2009. For that period, proactive cancellations by the airlines are higher. They then contend that this is proof that airlines are cancelling revenue-generating flights, and that they are cancelling them either primarily to avoid the fines threatened by the DOT rule or as vindictive retaliation for imposition of the rule. contends that neither of those things is true. It looks to us (and to the DOT) like airlines are becoming more efficient (and thereby increasing profits), and are proactively cancelling flights to mitigate the effects of other factors -- mostly weather -- so that they can more efficiently reschedule crews and aircraft and better re-accommodate passengers.

It is much more productive to take a look at a bigger picture. While it's not easy to do that, the data is available on the DOT's Aviation Consumer Protection and Enforcement site. Last year's cancellations were actually below the 15-year average for cancellations, and by no means out of the normal range of the last 15 years' numbers.

Looking back at a shorter, five-year horizon, we still see nothing unusual. Each year, publishes an Airline Report Card, and this year's document included an analysis of the effects of the Three-Hour Tarmac Rule. Dr. Frederick Foreman, our Research Director, provided considerable evidence to support the point that last year was not a huge anomaly. He showed the following cancellations per 1,000 flights over the last five years:
• 2006--17.07
• 2007--21.57
• 2008--19.61
• 2009--13.86
• 2010--17.56

Clearly, while the 2010 cancellation rate was higher than the 2009 rate, it was actually the median rate for that five-year period.

In summary, we believe that the rule has not been in effect long enough to demonstrate anything more conclusive than the undeniable fact that it's working. However, past data does exist that illustrates the fact that cancellations vary widely over time because of the complex interactions between the many factors affecting airline operations, and that this data clearly demonstrate that last year's rate was not out of normal range.

The FAA Reauthorization and Reform Act of 2011 is headed for House/Senate Conference Committee action, the House having passed their version on April 1, 2011. The Senate version would turn the DOT's Three-Hour Tarmac Rule into a matter of public law, but the House version's language is much weaker, leaving the airlines free to decide on their own when passengers might be able to leave delayed aircraft. The conference committee must ensure that the Three-Hour Tarmac Rule becomes a part of the final bill.

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