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August 07, 2009

Priorities, Power and Connections:
Eliminating Delays at JFK, EWR, LGA

A Question of Priorities

I'd like to ask an existential question, if I may:
Why do we have airports at JFK, EWR, and LGA? What's their purpose?
Why do they exist?

To serve the people in the NY metro area
To serve the NY metro economy
To make money for the Port Authority of NY-NJ
To serve the greater good of global aviation

Delays, a Dirty Secret, and a Solution.

I believe that these three airports exist to serve the people and the economy of the metropolitan area. So I'd like to ask on a macro level, Who are the three airports actually serving? And on a micro level, I'd like to ask: If an opportunity to sit in a airplane at LGA, JFK, EWR is precious, limited, and in demand, who are the people sitting in those airplanes? — because from that micro answer, maybe we can work back to the macro answer.

The dirty micro secret is that not all of those passengers are trying to get into (or out of) the metropolitan area. The people who are interesting in getting into or out of the local area are called O&D (origin and destination) passengers. If the airport is overcrowded, certainly the Port Authority should emphasize O&D passengers over connections. Because the Port Authority exists to support the metro area, right?

These are 2007 numbers for the percentage of passengers at these airports who are making connections to other cities:
   JFK 31% connecting, 69% O&D
   EWR 30% connecting, 70% O&D
   LGA 13% connecting, 87% O&D
This is significant. One-third (31%) of the passengers at gridlocked Kennedy and Newark have no desire to be there; they started off in Syracuse and want to go to Miami.



If landing and takeoff slots at JFK, EWR, and LGA are a precious commodity, why should a person from Syracuse who wants to be in Miami get to jam up the New York airports?

At the macro level: Why does the Port Authority let the airlines overcrowd New York airports to provide connecting flights to people who live elsewhere? Because it's a lucrative cash-cow for the Port Authority and the airlines, and they prioritize their money over local passenger's time and comfort.

At the risk of beating an already dead horse, let me say it this way: The Port Authority is using these airports for the good of the Port Authrority and the airlines (mostly Continental and JetBlue), to the detriment of the metropolitan population. That is corrupt and un-American. Perhaps I've been naive.

Sidebar: I like how the Chinese deal with corrupt Airport officials such as Li Peiying, former head of the Beijing Port Authority. (kudos to B.!)

The 30% Solution

If you remove all connecting passengers from the Port Authority's airports, you reduce their passenger traffic by 31%, 30%, and 13% respectively. Instantly, the number of passengers fits within the airport's capacity. The only reason these airports are overscheduled is so the airlines can sell connecting flights to other cities — most notably, Continental's hub operation at Newark and JetBlue's hub at Kennedy.

If you want to dramatically improve the delay posture of EWR, LGA, and JFK next month, just prohibit the sale of connecting flights. Shazam! Problem Solved.

What About the Connecting People in Podunk and Springfield?

Before taking action, the WWVB staff always tries to consider Kant's Categorical Imperative. Would it be all right if airports everywhere shunned connecting passengers? No. So, to be morally justified, we should also offer an accommodation to meet the needs of those people who are connecting.

Fortunately, this problem has been solved before.

In 1989 the manager of the FAA Airports District Office in Orlando, Florida (Jim Sheppard) realized that the airport congestion problem was due to connecting flights at airports which were approaching their capacity with local passengers. He published a position paper that led to an article in Aviation Week magazine.

Sheppard was driven into retirement because of the politics of the situation. He is currently a senior manager at the Orlando airport, which notably has no connecting flights. The Orlando airport focuses on serving local people and the local economy, and is not interested in supporting a hub operation. There are no delays at the Orlando airport.

Sheppard argued that the key to avoiding delays in major cities was to move the connecting activity away from busy urban airports. He suggested building "connecting airports" out in the boonies, removed from metropolitan areas. He faced two problems: the airlines and airports strongly resisted his challenge to their existing dominance, and Congress was unwilling to spend the $300 million to build a major airport to evaluate the concept. His concept remains unused.

Here's Jim Sheppard's definition of the problem and proposed solution, from his website.

Economic developments in the last five years have made testing Sheppard's concept practical and inexpensive. Instead of building a new major airport to support connecting flights, there are now several existing, paid for, underutilized airports with parallel runways, modern terminals, and full instrument landing systems.

The highest capacity airports in the United States are called OEP Airports, for Operational Evolution Plan. These are the country's go-to airports. Some of these airports have been abandoned by their primary airlines and sit relatively unused. Pittsburgh and St. Louis come immediately to mind as once-busy OEP airports, sitting unutilized, that stand ready to support a connecting-flight hub.


Essentially, we can prohibit connecting flights at EWR, LGA, and JFK, and offer government subsidies to help airlines pay their costs for establishing hub operations at Pittsburgh, St. Louis, and other under-utilized airports. I estimate that $15 million over 5 years should be sufficient.

There is no way you could spend $15M over five years in the New York area and reduce delays. Paradoxically, you have to spend it somewhere else. The subsidy is not logically essential, but it's probably a requirement to make this politically palatable.

I think Adam Smith would agree that if we constrain connections in EWR-JFK-LGA, and subsidize connections elsewhere, the invisible hand of the marketplace will help the airlines see the wisdom of the change.
  • Delays are not caused by the ATC system.
  • NextGen will not resolve delays.
  • Runway capacity is the constraint.
  • Airlines and airports oversell flights, gates, runways, and cities.
  • The system is designed to cause delays, because the profits accrue to the airlines and the airports, and the costs are carried by the passengers and public.
  • Delays are not an aberration; they're the result of a cynical business model.

General Solution

These steps will eliminate most delays across the country:
  • Airline schedules must fit within (departure and destination) airport capacity.
  • Airport capacity is set as a federal standard.
  • The Port Authority allocates their slots at their airport, within the Fed standard. Revenues go to the Port Authority.
  • $5000 penalty for scheduling over capacity for both airport and airline, per plane per day.

New York Connections

Moving connecting passengers away from EWR-JFK-LGA to PIT or STL, by prohibiting connections at the New York airports and subsidizing the airline's opening a connection operation at the new location, will reduce passenger loads so that they easily fit within airport capacity.
I'm done. Thank you very much for reading. I'm sorry to be so long-winded.

9 comments:

Anonymous said...

Most top FAA positions are now held by ex-airline executives. Not a viable situation for implementing rules that could inconvenience airlines.

Yank Hank said...

"Most top FAA positions are now held by ex-airline executives. Not a viable situation for implementing rules that could inconvenience airlines."

These ex-airline individuals are responsible for the aircraft maintenance whistleblower fiasco, 300 hour airline pilots, and the decimation of the ATC system by forcing out retirement eligible controllers without hiring replacements in a timely manner. The ex-airline execs should be fired for these and a multitude of other reasons too many to list. This mindset must be changed before the FAA can be fully rehabilitated.

Anonymous said...

I believe that most informed people believe that the above proposed plan would work. I also believe that many, maybe most, do not want it to work. You missed, or maybe avoided, at least one very large obstacle.

That obstacle is The National Air raffic Controllers Association (NATCA). They would never let it happen! If EWR, LGA, JFK, and The Room lost 30% of their traffic, their facilities would be down-graded and the controllers would be forced to take a pay cut.

The New York area Controllers have a very strong and vocal presence in aviation that extends beyond the Metro area. Their greed and un-willingness to do what is right for the majority will prolong our nation's aviation delays indefinitely.

Anonymous said...

using under utilized airports is the exact thing that PATCO brought to the bargaining table, called the hub and spoke...the FAA took this to the airlines and came up with what we have today.

Anonymous said...

When all else fails blame the controllers. I think the NY controllers would welcome a decrease in traffic volume. Its the greedy airlines that cannot/will not reduce the volume.

Vannevar said...

Hello Anon Aug7th@2:21 and Yank-Hank: I think only a half-dozen honchos are ex-airline types. The bigger problem (imo) is Feds who want to work for the industry after retirement.

Hello Anon Aug11th@10:24: I disagree categorically (and respectfully). I bet those Towers and the Common-I would love to see a schedule that fits into capacity. NATCA is not the problem.

Cheers, V.

hhoran said...

I agree with your core point--these airports are not being managed for the benefit of the local economy/taxpayers/consumers--but the rest of your argument gets basic airline economics totally wrong. If you want to get mad at airline people for ignorance of ATC fundamentals, you can't turn around and make proposals that ignore airline fundamentals.

Airlines are a network business. Across the globe airline efficiency depends on combining local and connecting traffic on the same plane. If the government imposed your proposal, Delta, Continental and Jetblue would just shift to smaller planes, and then raise New York fares in order to cover the higher unit costs. Those people would pay more for parking and food at the airport as well, since the reduced throughput would reduce airport and concession revenues. You'd do nothing to reduce delays, you've made consumers, airports and airlines worse off, and you've done nothing to fix the screwed-up incentives that created the core problem.
Two of the most screwed-up incentives are weight-based landing fees and airline "ownership" of the publicly funded airport capacity represented by the slots they use. Airlines fill these airports because the slot "property rights" are much more valuable than the cashflow from the flights they operate, and it allows them to block lower cost competition that would bring New York fares down. Weight-based fees allows them to block competition and protect slot "assets" by flooding New York airspace with 30/50 seat planes. With flat fees you'd see bigger aircraft (supporting lower fares and more throughput) which would allow you to cut flight levels to more sensible levels without harming local consumers or Port Authority finances.

Vannevar said...

Hello HHoran,

First, thanks for your well-reasoned response, It was thought provoking. I enjoyed your website, very impressive CV.

May I ask some follow-ups? When you say, Airlines are a network business, how would you differentiate Southwest's network from the legacy-maintstream (Delta/Continental/USAir) network?

Why would the legacy carriers respond to capacity limits by using smaller planes and raising prices, in the face of competitive pressure?

And finally (and genuinely, I'm really interested) how do you feel about permitting airlines to overschedule runways and airports, which results in delays? How can it be practical to ignore known capacity limits?

We agree that airports are networks, and there's a whole body of crossover work between networks-qua-systems and airlines, health care providers, etc. None of the people in the Networks niche that I've read think it's practical to intentionally overload capacity.

And again, I don't want to lose the context, which is too easy to do in a text-mediated channel: I really appreciate your note, and I'd like to hear more from a person with your perspective.

Cheers and smooth landings,
Vannevar

hhoran said...

If you send me an email contact to horanaviation@gmail.com I can provide more detail, but very quick comments--
1. Four categories of airline networks--(a)domestic megahub (think ATL,DFW) feeding lots of little cities to bigger ones(b)international megahub (JFK,FRA,HKG)using regional feed to fill intercontinental widebodies (c)quasi-network(Southwest)connecting traffic still 20-25% but planes don't wait for pax in big connecting banks (d) pure point-to-point (Ryanair, charters) very rare in USA
2. Requires longer answer, but think about an airline losing money on flights at LGA. If they cancel flights,they lose slots forever, they lose NYC market share, and if slots are grabbed by low cost operator, it pushes down fares gnerally in the NY market. Weight-based fees allow them to "protect" slots at lowest possible cost, even though that screws local consumers, economy and airport.
3. Requires much longer answer--yes of course NY airports are overscheduled, every airline scheduler knows this. Lower caps would reduce delays. But delay costs are not the only important variable in play. Airport managers, local politicians, FAA bureacrats, FAA employee unions, ATC vendors, corporate aircraft operators, incumbent Legacy airlines, non-incumbent low-cost airlines, and other groups all have interests in stake. Any given "solution" might hugely benefit some while totally screwing others. It is not like there is anyone in Washington dispassionately looking out for the "greater good".

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