delays at logan airport case study

DelaysatLoganAirport

MasterofGlobalManagement MichaelCalo IlyasCagarOperationsManagementandResearch Anne-ClaireDeBrieyProfessorOcampoyVilas MargauxLonbois LauraValkiers

WilliamVermeulen

TheCurrentSituationatLoganAirport

Ourcaseanalysistakesanin-depthlookatthecausesandplausiblesolutionsforthedelays

experienced at Logan Airport in Boston, Massachusetts. The data used to analyze the delays fall

beforeanduntil theyear,2000.Theproblemswithin LoganAirport’sefficiencyarepredominantly

duetothehighdegreeofdelaysduringpeakperiodsthroughouteachday.In2000morethanonein

four flights were delayed, a total of 27% of the flights. As forecasted, Logan Airport expects the

passenger volume to rise in the upcoming years,making the search for a solution to the delays a

pressingconcernfortheorganization’slong-termefficiencyandsuccess

Oneprimarycause fordelaysare theadverseweatherconditions that frequentlyvisits the

NewEngland region.Boston’sharsh climateand severewintersmake theairport very sensitive to

weather fluctuations. In cases of adverse weather conditions, the amount of planes delayed

dramaticallyincreasesfrom5%to12%.Normaloperationsentailtheuseofthreerunways,butwith

adverseweatherconditionstheamountsofrunwaysinusecanbelimitedtotwooronedependent

ontheseverityoftheweatherconditions.Duringaverageinclementweather,arrivalanddeparture

operationsareusually limitedtotheuseoftworunways.Theuseofonlytworunwaysresults ina

dropintheamountofoperationsfromanormal118–126toamuchlower78–88operationsper

hour. Incomparisonto theaverage inclementweatherevent, severeweatherconditionsareoften

due to intensenorthwestwinds thatare frequentlyaccompaniedbyhigh levelsof snowfallduring

thewintermonths.Duringtheseconditions,operationsarelimitedtoonerunway,creatingmassive

delaysforpassengers.Operationsdroptolowerthan50%ofnormaloperationsatabout40to60per

hour.

Another source of the delays, originate from Logan Airport’s complex interactive queuing system.

ThefleetsthatoperateontherunwaysatLoganAirportconsistof3maincategoriesofaircrafts.The

largest planes at this airport are the Conventional Jets, which have an on-board capacity of 150

passengers.ThesecondaircraftthatusestherunwaysatLoganAirportaretheRegionalJets,witha

maximum capacity of 50 seats. The last and smallest aircraftmodel to utilize LoganAirport is the

Turboprop,whichareplanesthatcanholdupto19passengers.Theuseof threedifferentsizesof

aircraftson the same runwaysat LoganAirport is a sourceofmassivedelayson flight turnaround

time. This is primarily caused by the differing amounts of time and space needed for takeoff,

dependentonthesizeoftheaircraft.

As previously stated, Logan Airport forecasts that there will be influential increases in

passengersthatwillutilizetheairportinupcomingyears.Tocopewithandprofitfromthisincrease,

a solution must be found that solves or at least minimizes the delays. One of these proposed

solutionsistheconstructionofanadditionalrunwaythatwouldalleviatethedependencyonlimited

runwaysduring inclementweather conditions.Due to severalenvironmental andpolitical reasons,

numerous groups, with notable representation in the city, oppose the construction of the new

runwayandultimatelydoubtifthenewrunwaywouldbeaneffectivesolutiontothedelays.Another

solutionthathasbeenproposedistheuseofdemandmanagementthroughtheinstallmentofpeak-

period pricing. This strategy assists in determiningwhich aircrafts can operate on each runway at

givenpoints intimeand limitsthedelaysthatare influencedbythecomplexmixofdifferentsized

aircraftsutilizingthesamerunways.

Followingthisbrief introduction intothecurrentsituationatLoganAirport,wewillanalyze

theeffectofPeakPeriodPricingondelay costs, theeffectofPPPondifferentmixturesofaircraft

typesandontheirrevenuesandfinally,thearrivalandserviceratesandtheresultsfromarrivalrates

exceeding service rates. From the data collected, conclusions will be made and we will provide

recommendation pertaining to the use of Demand Management and/or the construction of an

additional runway to curtail the delays caused by a growing amount of passengers forecasted to

utilizeLoganAirportintheupcomingyears.Asthiscaseisadepictionofanauthenticevent,wewill

also use the data collected to reflect on the actual decisions and developments made by Logan

Airport.Wewill includeasmallcomparisonwiththereal lifedecisionsmadeandfromthiswewill

recommendouropinionsonwhethercorrectdecisionsweremadeandhowourdecisionsmayhave

differedgiventhe20/20hindsightwehaveregardingLoganAirport’sapproachtoagrowingvolume

ofpassengers.

PeakPeriodPricing’sImpactonDelayTimesandCosts

In the 2000s, Logan Airport in Boston has faced various problems regarding plane delays.

Severalmethodshavebeenproposedinordertoreducecongestionandaircraftdelays.Oneofthe

solutionscouldbe touseapeak-periodpricingmethod,whichwouldcharge theaircraftsahigher

rate during period of high capacity utilization in order to reduce runway traffic at that time, and

therefore,delays.Duringpeakperiods,thearrivalratesrangefrom45toalittleover60planesper

hour.Wehaveanalyzedthedelaytimesandassociatedcostsduringpeakperiodforthreetypesof

planes.(Turboprop,RegionaljetandConventionaljet)Foreachaircrafttype,wehaveanalyzeddelay

costsatthreelevelsofserviceat50,55and59planesperhourtogaugetheimpact.Werealizedthat

thetotaldelaytimeinthecaseof50planesperhourwouldbe6,55min.Then12,52minofdelays

wouldberegisteredfor55planesperhourandmorethan1hour(60,50min)foranarrivalrateof59

planesperhour.Moreover,allthesedelayswouldleadtosignificantcosts.Thetablebelowindicates

thecosts(in$)ofbothoperationalandpassengerdelaycosts.

Turboprop Regionaljet Conventionaljet

50planes/hour 75,25199999

167,9454545

467,2909091


321,2869565

893,9478261


1552,436975

4319,495798

Figure1:Delaycostsperaircraftperservicerate

The Federal Aviation Administration (FAA) estimated that a flight delayed would be only

takenintoconsiderationifithasadelayofmorethanfifteenminutespastschedule.LoganAirport

couldbenefit fromthisdefinition in termsof costs.Theoperational costswould remain thesame.

Whether thedelay is taken into considerationor not, theoperational costs (fuel, pilot,workers…)

wouldremainthesame.However,itcouldbeinterestingforLoganairporttotakeintoconsideration

theFAA’sdefinitionofdelayregardingthepassengercosts.Indeed,thesecostswouldnotbepaidfor

anarrival rateof50and55planesperhourbecausethedelayestimatedperplane is less than15

minutesandarethereforenotdeemedasflightdelay.Givenourfindings,wecanseethatreducing

thearrivalrates leadstocostreduction. Inouranalysis inthetableabove,datashowsthatapeak

with59planeshaswayhighercoststhanforexample50planesperhour.Thedelaycostsassociated

with50Turboprop’sarealmost11timeslessthantheTurbopropof59planesperhour(thisisalso

applicablefortheotherplanetypes).

PeakPeriodPricingandtheAirplaneMix

Our analysis of the operational inefficiencies at Logan Airport will now be examined by

incorporatingthe impactofpeak-period landing feesonthethreedifferenttypesofairplanes. It is

stated that airlines are only willing to shift flights to off-peak periods if costs of incurring peak

chargesoutweighthecostsofshiftingflightstooff-peakperiods.Thishesitancyismostlyduetothe

airlines’ fears of angering their customers, possibly resulting in a significant loss in revenue and

returningcustomers.

Peak-period landing fees have an immense impact on revenues and profits of specifically

smalleraircrafts incomparisontothemoreconventionalaircraftsduetothefees’negative impact

ontheprofitabilityofeachflight.Inresponsetotheselandingfees,someairlineswillfaceadifficult

decisiontochangetheirflightstooff-peakperiods,raisepricesorevencanceloperations.Giventhis

general information, we will now investigate how differently priced landing fees impact the

profitabilityofeachtypeofaircraftutilizingLoganAirport.

Westartouranalysisbycalculatingtherevenueperplaneforeachmodelgiventheseating

capacityandrevenueperperson.Givenourassumptionof70%loadfactor(seatsoccupied),wefind

total revenue per plane to be 70% of the plane’s total revenue. With the total revenue of each

aircraft,wecanthensubtracteachlandingfeeamountof$100,$150or$200.InTable2.1youcan

seeourcalculationsforeachkindofplaneandthedecrease inrevenueperplaneforeach landing

fee amount. With this data, it is already apparent that the per-flight revenue of the Turboprop

aircraftswillendurethemostsignificantdecreaseincomparisontotheotheraircraftmodels.

Plane Seating Revenue/person Total

Revenue

TR with

70%

load

minus

$100

minus

$150

minus

$200

Turboprop 19 230 4.370 3.059 2.959 2.909 2.859

Regionaljet 50 154 7.700 5.390 5.290 5.240 5.190

Conventional

jet

150 402 60.300 42.210 42.110 42.060 42.010

Figure2:Revenueperplanegivenaloadingfactorof70%andtheeffectofPPP

Beforewecanassesstheeconomic impactofthese landingfeeswillbe,wemustcalculate

themarginofoperatingprofit.Wedo this calculationby taking the totaloperatingprofit ($) from

eachplaneanddividing thiswith the total revenues ($)of eachplane. This givesus theoperating

profit margin of the planes. As you can see in Table 2.2 the Turboprop aircraft has an operating

marginof2,74%,theRegionalJethasan11%operatingprofitmarginandtheConventionalJethasa

margin of 12,22%. Given the drastic difference in operating margin between the Turboprop and

Regional Jet,we can already suggest that the Turbopropwill bemost significantly affected theby

demandmanagementthroughpeak-periodlandingfees.

Figure3:CalculationoftheOperatingProfitMargin

Plane OperatingProfit[$] TotalRevenues[$] OperatingMargin[%]

Turboprop 4.000 146.000 2,74%

RegionalJet 52.821 480.021 11,00%

ConventionalJet 2.365.000 19.352.000 12,22%

Withtheoperatingprofitmarginknown,wecannowcomparethisvaluewiththeeffectof

thelandingfeesonthetotalrevenueperplane.AsyoucanseeinTable2.3,ourcalculationsofthe

landing fees impacton total revenue represents thedebilitatingeffect these feeswill haveon the

profitabilityof theTurbojet.Atall three levelsof landingfees, theoperatingmargin (2.74%) is less

than the landing fees impact on revenues. Given this observation, Turboprop flightswill never be

abletoturnaprofitduringpeakperiods.InthecaseofRegionalJets,thefeeswillhaveareasonably

significanteffectontheflightprofitability(dependingonwhichfeeisused),butprofitsarestillthere

tobemade.Additionally,wecanseethatevery landingfee for theConventional Jetsbarelyaffect

theiroperatingprofitmargin,representingtheirabilitytowithstandpeakperiodpricingandcontinue

normalflightoperationswithinLoganAirport.

Plane DecreaseinRevenue(%)

$100fee

$150Fee $200Fee Operating Margin

(%)

Turboprop 3,27% 4,90% 6,54% 2,74%

RegionalJet 1,86% 2,78% 3,71% 11,00%

ConventionalJet 0,24% 0,36% 0,47% 12,22%

Figure 4: Comparison between the effects of landing fees on the revenue per plane with the

OperatingProfitMargin

Givenourpreviousanalysis,wecanconcludethatpeak-periodpricingwillhaveasignificant

effect on themix of airplane classes utilizing Logan Airport during peak periods. For instance, an

airplanemodelmixof40%Turboprop,18%RegionalJetsand42%ConventionalJets,willbehighly

impactedbytheimplementationofpeakperiodpricing.Thisisduetothe40%ofTurbopropmodels

thatwillcanceloperationsduetotheir inabilitytomaintainprofitabilityduringthesepeakperiods.

This 40%of Turboprop flightswill bedistributedbetween theRegional Jets andConventional Jets

duringpeakperiods inhopesofminimizingdelay costs causedby amixof aircrafts attempting to

utilizethesamerunwaysduringthesameperiods.Duringpeakperiodpricing,wecanseethatthe

operatingprofitmargin for theConventional Jets isminimally affected. Therefore,wepredict that

therewillbealargerincreaseinConventionalJetaircraftsatLoganAirport,whichwillbecapableof

withstandingthenegativeeffectsofpeakperiodpricinguntilahigherfeeisestablished.

Givenadecrease inTurbopropsoperatingduringpeakhours, themagnitudeofdelayswill

alsosignificantlydecrease.IfrunwaysarelimitedtoRegionalandConventionalJets,therunwayscan

be used more effectively and efficiently for arrivals and departures. Given the fact that smaller

aircraft hold fewer passengers, flymore slowly and are required tomaintain greater distances to

avoidwindvortexesfromlargeraircraft,attemptingtomixthesemodelsintopeakperiodswillonly

servetoincreasedelaytimesandultimatelycosts.

Withtheseobservations,wecanassumethatamixofairplanescontaining20%Turboprops,

30% Regional jets and 50% Conventional jets, will have far less significant implications on the

magnitudeofdelaysatLoganAirport.DuetothefactthatTurbopropaircraftsonlyaccountfor20%

of flightsduringpeakperiods in thisexample, theuseofpeakperiodpricingand landing feeswill

significantly impact a smaller percentage of flights than in the previous scenario. Seeing as the

majorityof flightsduringpeakperiodsare largeraircrafts in this scenario,wecanassumethat the

magnitudeofdelayswillbe lesssignificant influencedwithpeakperiodpricing.Byonlyhavinghalf

theamountofTurbopropsflyingduringpeakperiods,delaytimesandcostsautomaticallydiminish,

makingtheuseofpeakperiodpricinglesssignificantwithinthismixofaircraftsthantheformermix.

Asa resultofdemandmanagementand theuseofpeakperiodpricing, smallerTurboprop

aircraftswillbeforcedtocanceloperationsduringpeakperiodsduetoaninabilitytocreateprofits.

Giventhischange,Turbopropaircraftswillbegintooperateduringoff-peakperiods,spreadingout

flightoptionsandminimizingcongestionduringpeakperiods.Duetotheamountofdelayscausedby

the inefficiencies and slow nature of the departure/arrival process for Turbojets, eliminating their

useduringpeakperiodswilldramaticallyincreasesavingsindelaycosts.Forthelarger,Regionaland

Conventional aircrafts, the absence of Turboprop aircrafts during peak periods will minimize the

delaycostsandimproveaircraftturnaroundtimeontherunwayandatthegate.Bylimitingtheidle

timeandwastedminuteswaiting forTurbojets to clear theway, the fees thatareassociatedwith

operatingduringthesepeakperiodswillultimatelybeoffset.

TheImpactofWeatherConditionsontheArrivalandServiceRates

Thecapacityof theairport ingoodweatherconditionsaverages60planesanhour.During

moderateweatherconditions,45planesanhour.Duringsevereweatherconditions,theairportonly

averages30planesanhour.TheservicerateofLoganAirport isdirectlycorrelatedtotheweather

conditions.Therefore,ifarrivalrateexceedstheweather-variablecapacity,waitinglineswilloccur.

TheLoganAirportcaseshowsthat90%ofallflightswerenon-transitionflights.Thismeans

thatflightsarrivemoreuniformlyovereachhourratherthanclusterinhourlylumps.Duetothis,the

airportonlyhasasmalltimeframetorecover,beforetheplanescomebackfromtheotherairportto

Logan.Thisdoesnotgivetheairportanytimetoreduceitspendingwaitingline,sincearrivalrates

are not expected to drop during the normal flight schedule. As long as the inclement weather

persists,thewaitinglineincreases.Moreover,thelongerthewaitinglinegets,thelargertheeffect

onthevariabilityofarrivaltimes.Keepingaircraftsinholdingpatternslongerthanplannedrequires

themtoburnmorefuelthaninitiallyanticipated,whichincreasescostsincurredbytheairline.

Bycalculatingthedelaysduringdifferentweatherconditions,somesevereproblemsbecame

clear.Wecalculatedthedelaytimeandcost forthreedifferentsituations.Thefirstsituation isthe

goodweathercondition.Inthisconditionthethreerunwaysareopenwhichmeansthattheairport

functionsatit’shighestcapacity.Duringgoodweatherconditions,delaytimesareminimalatmost.

Theonlydelayweobserveisat18.00handthisisadelayofonlyoneminute.Althoughthisminute

delaycanbesolvedquickly,wenotedthatitdoesresultinacostof39,20dollars,whichshowsthat

eventheslightestdelaysresultinhighcosts.

Thesecondsituationisthemoderateweathercondition.Thismeansthatonlytworunways

areusedandthatthecapacitydecreases.Atmoderateweatherconditionsalotofproblemsoccur.

Thedelaysalreadystartat8hwithadelayof12minutesanditquicklybuildsupuntiladelayof47

minutesat17h.Itisimportanttohighlighttheproblemofqueuing.Whenplanesarrivetoolate,they

create a waiting line, as explained above. Due to the fact that flights continue to arrive, the line

keeps expanding. Given the degree of delays, it takes several hours after the peak periods to get

resolvetheproblemsandeliminatethewaiting line.Thecostofsuchawaiting line ismassive.For

example,at17hawaitinglineof47minuteshasanaveragecostof$914.

Thelastsituationisthesevereweathercondition.Duringthiscondition,onlyonerunwayis

inoperationandcapacity isat its lowest.Delaysbegin to takeeffectat6hwithawaiting lineof4

minutes.Thewaitingperiodgrowsquicklytoalmosta7-hourwaitinglineat17handalmost9hours

at20h.Theproblemofqueuingoccurshereaswell.Thecostsaredramaticallyhighfrom7.762dollar

at17handeven10.271dollarsat20h. Inaddition, itmustbenotedthatflights,whicharedelayed

for more than 2 hours, will never depart, creating a huge impact on the overall operational and

passengercostsassociatedwiththeflight.

Apossible solution todecrease thedelay times isbybuildinganewrunway,whichcanbe

usedduringsevereweatherconditions.Withtheconstructionof this runway,minimalmajordelay

timeswouldberegistered.Addingatleastoneadditionalrunwaywouldpartiallyalleviatethedelay

concernsandminimizedelaycosts.

Figures5and6belowshowwhathappenswhenweaddanadditionalrunway.Wewillnot

do this whenweather conditions are good as this gaveminor delays.We assume three different

capacitiesof thisadditional runway.This is+10,+20or+30additionalarrivalsperhour.Thegraph

shows that during the moderate weather conditions, an additional 10 arrivals almost eliminates

delayproblems.Inthesecondgraphwecanseethatanadditional30arrivalsanhourduringsevere

weatherconditionsisneededtocopewiththedelayproblems.

RecommendationsonPeakPeriodPricingand/ortheAdditionofaNewRunway

Givenour findings in theanalysisabovewehavereachedaconclusiononwhatwebelieve

wouldbethebestapproachatLoganAirportinrelationtominimizingthemagnitudeofdelaysand

theoperationalandpassengercostsassociated.

First,wewouldrecommendtotheFFAinBostonthatwebelieveintheuseofanadditional

runwayandendorseMassport’s constructionof a runwayat LoganAirportdespitepushback from

severalgroups.Giventhecurrentmagnitudeofdelayscausedbythelimitationsofourrunways,we

believeanadditionalrunwaywouldalleviateseveraldelayissues.Forexample,anadditionalrunway,

0

10

20

30

40

50

60

0h

2h

4h

6h

8h

10h

12h

14h

16h

18h

20h

22h

Waitingline

Figure5:ModerateweathercondiQonswaiQngline/hour-capacity

MWCwaitingline

MWCwaitingline(+1runway+10)



0

50

100

150

200

250

300

0h

2h

4h

6h

8h

10h

12h

14h

16h

18h

20h

22h

Waitingline

Figure6:SevereweathercondiQonswaiQngline/hour-capacity

SWCwaitingline

SWCwaitingline(+1runway+10)



positionedinawaythatisresistanttosevereweatherconditionswillimproveLoganAirport’sability

to maintain a satisfactory turnaround time for all of its aircrafts during peak periods or times of

severe and inclementweather. Due to the fact thatwinds approaching from theNorthwest force

Logan to reduce operations down to one runway, creating the ability to better cope with these

weathereventswillgreatly reducedelaycosts.Additionally,webelieveMassport’sconstructionof

anotherrunwaycanassistinreducingdelaytimesrelatedtotheuseofafleetofaircraftsthatvaryin

size and turnaround time. If we were to assign a specific runway to just Turboprop aircrafts, we

wouldefficientlylimittheamountoftimethelargeraircraftsmustwaitfortheseTurbopropstoclear

the runway. By designating smaller aircraft to their own specific runway, we can resolve the

magnitudeofdelayscausedbyacomplexmixofaircraftsutilizingthesamerunwaysduringthesame

timeperiods.

Due to the growth in the amount of passengers predicted to use Logan Airport in the

upcomingyears,wealsoseePeakPeriodPricingasausefulandnecessarytooltocopewiththehigh

magnitudeofdelaysbeingexperiencedatLogan.Webelievethatbyinstatingapeakperiodpricing

strategy,wewillencouragepassengerstoflyduringamorewidespreadrangeofflighttimes.Ifpeak

periods are associatedwith high landing fees, wewill discourage smaller aircrafts from operating

during these periods andwill either cancel operations ormove them to off-peak periods, both of

whichwillimprovedelaytimes.Webelievethatthelongtermeffectsofpeakperiodpricingwillbe

positive,asthegrowthinpassengersatLoganispredictedtocontinuouslyexpand.Withastrategy

thatencouragesTurbopropoperationsduringoff-peakperiods,LoganAirportwillbeabletobetter

utilize the runwaysduringpeakperiodsbypredominantlyusing theconventionaland regional jets

that require less turnaround time and space for takeoff, while also transporting a much higher

numberofpassengersperflight.

Sowhatreallyhappened?

Givenourfindingsandrecommendationstoaddbothpeakperiodpricingandanadditional

runway to cope with the magnitude of delays at Logan Airport, we will now divulge the actual

decisionsmadebytheofficialsinrelationtothesetopics.Oncebeingproposedin1973andenduring

40yearsofdelaysduetodisagreementsovertherunway’sfeasibility,finallyonNovember23,2006

runway 14/32 became operational. This runway is now used for both departures and arrivals. To

addressdelayscausedbyinclementweatherconditions,LoganAirporthasdesignatedtheuseofthis

runwaytoconditions thathaveaminimumwindthresholdof19km/h fromthenorthwest. In2009

theyalso finishedwith thebuildingofanewtaxiwayparallel to runways4R/22Land4L/22R.They

started constructing this taxiway in 2007 with approval of the FAA. Logan Airport in Boston now

operatessixrunwaysthatarealignedinthreedifferentdirectionsinordertosufficientlycopewith

windsandinclementweatherapproachingfromalldirections.Giventhisnewrunwayconfiguration,

Logan Airport can accommodate 120 operations per hour when the FAA can use a three-runway

system. In the event of poor weather conditions, the operations per hour can be reduced to 60

operations.

Given these decisionsmade by the FAA at Logan Airport regarding the expansion of their

runway configuration, we must also note that the officials didn’t see peak period pricing as the

primarysolutiontobeusedinresolvingtheirdelaydilemma.Throughoutthe2000’s,theuseofpeak

period pricing to cope with delays during peak periods was frequently considered. Due to Logan

Airport’spositioninginBostonasafarnortherncoastalcity,theyplacedahighlevelofimportance

ontherelationshipswithTurbojetpassengersthatoriginatedfromregionsthatwereusersofsmaller

aircrafts.LoganAirportofficialswerewaryofthedeterioratingeffectpeakperiodpricingmayhave

onthelongtermrelationshipsbetweenthemselvesandtheirTurbojetcustomers.

Figure7:NewRunwayConfigurationasof2006

Work(s)Cited

1. Andersson, Kari, Francis Carr, Eric Feron, and William D. Hall. "Analysis, Modeling, and

Control of Ground Operations at Hub Airports."Air Transportation Systems

Engineering(2001):305-41.MIT.edu.16June2000.Web.1Dec.2015.

2. Idris, Husni R., BertrandDelcaire,WilliamD. Hall, John-Paul Clarke, John R. Hansman, Eric

Feron, and Amedeo R. Odoni. "Observations of Departure Processes at Logan Airport to

Support the Development of Departure Planning Tools." (1998): n. pag.Atmseminar.org. 4

Dec.1998.Web.1Dec.2015.

3. Narayanan,V.G. "Delaysat LoganAirport."Review.HarvardBusinessReview13Dec.2001:

Print.

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