Estimation of Flight Delay Costs for U.S. Domestic Air Passengers

Abstract

Evaluating the economic value of flight delays has always been a keen interest of research groups as well as of federal agencies such as the U.S. Department of Transportation and FAA. However, because of the complexity of the question as well as the incompleteness of available data sets, the estimation of flight delay costs is considered a challenging task in practice. This paper presents a method for estimating domestic air passengers' delay costs incurred by flight delays in U.S. airports. A unique feature of the method is that the costs incurred by flight delays relative to the original flight schedules are imposed at passengers' final destination airports. The underlying assumption of this idea is that the opportunity costs (incurred from compromised business opportunities or personal affairs due to the delayed flights) happen at the destination airports, not at the transfer airports. To reflect the variability of flight delays, both average and 95th percentile flight delays are calculated at each airport and applied to estimate corresponding delay costs. In 2007, total domestic passenger delay cost was estimated at $5.2 billion and $8.7 billion for, respectively, average and 95th percentile gate arrival delays. Assumptions, data sets, and results from this study are summarized and compared with those from previous studies.