IS AIRLINE ON-TIME-PERFORMANCE IN FACT MORE IMPORTANT THAN PRICE?

The Australian business traveller is regularly confronted with decisions regarding timing vs. price. The price conscious traveller will typically purchase cheap, inflexible domestic tickets and will juggle the appointment diary to fit in with flights. All of this is based on the assumption that airlines will depart and arrive pretty much on time.

The question needs to be asked – if flights are chosen on the basis of price and business meetings are set-up around the presumption that airlines arrive on schedule, how do delays and cancellations affect the bottom line? Apart from anecdotal information, how much do we really know about airline on-time-performance in Australia?

By contrast, in the USA on-time-performance is viewed as key airline performance data and strong measures are in place to ensure that this is properly recorded and disseminated. The Department of Transport (DOT) requires that all carriers must disclose the on-time-performance of any flight to any consumer who asks for it “during the course of a reservation enquiry” so that consumers are able to make educated decisions about their purchases.  Jet Blue recently paid a fine of $30,000 after random tests conducted by DOT found that sales staff failed to provide information on on-time-performance on “numerous occasions”.  Hawaiian Airlines was fined $50,000 after it was found that some of its staff failed to provide the information or gave varying information on the same flight. All of this is in spite of the fact that for four consecutive years Hawaiian has produced the U.S. airline industry's best on-time record. It ranked number 1 in 2007 with 93.3 percent of its flights arriving on schedule. (To meet DOT standards, a flight must arrive within 15 minutes of schedule to be considered on time.)

In the USA, further consumer protection is provided by the Aviation Consumer Protections Division of the Department of Transport. Quite a mouthful, but its mandate is to publish monthly reports on “Flight Delays, Mishandled Baggage, Oversales, Consumer Complaints, Customer Service Reports to the Transportation Security Administration, and Airline Reports of the Loss, Injury, or Death of Animals during Air Transportation”. By way of interest “Oversales” are instances where a passenger holds a firm reservation and they are “bumped” for reasons other than cancelled, delayed or diverted flights. The latest statistic is 1.36 passengers per 10,000 (an improvement from last year at 1.46). If your pets wish to make educated decisions before choosing an airline, it will be in their best interests to know that in May 2008 Continental reported 3 animal deaths.

Recognising that delays are a real problem, a National Task Force has been established in the USA “To Develop Model Contingency Plans to Deal with Lengthy Airline On-Board Delays”. The task force meets regularly with about 70 attendees representing airlines, DOT, airports, Customs, FAA and a host of human rights associations. The task force is expected to complete its mandate by January 2009. It is no surprise that their meetings last eight hours, much of which seems to be taken up with member introductions, housekeeping and explanations from the chairman regarding the task force charter.

Getting back to Australia, we believe that on-time-performance expectations are largely taken for granted by Australian business travellers. Whilst the local airlines and The Bureau of Infrastructure, Transport and Regional Economics (BITRE) provide monthly statistics, very little filters through to the general media, travel press or consumers. Airservices Australia is predicting a doubling of passenger numbers over the next 20 years to about 228 million. With airports struggling to cope, airlines facing increasing costs and air traffic controllers demanding wage increases of between 32% and 63%, if we have a problem now its surely set to worsen.

BITRE’s reports are subject to internal audit by participating airlines, but there appears to be no independent verification of the data supplied by airlines and there is certainly no pressure on airlines to keep the travelling public informed. Should you care to wade through the statistics you will find that on-time-performance of all domestic carriers dropped from 89.6% in January 07 to 84.1% in Jan 2007. The chart below maps the performance of all domestic airlines across all ports in Australia for the 2007 calendar year. The trend line is self evident. Individual carrier performance makes more interesting reading.