How to eliminate flight delays, now

For the moment, the FAA is focused on airports in the North East. With a selective application, however, the cap-and-trade scheme would turn out a double-edged sword. On one hand, airlines could move operations from restricted to unrestricted airports; this would happen at fields that can function as substitutes of each other, such as Newark and JFK. On the other hand, the beneficial effect of unclogging one airport would ripple through the entire network: one fewer take-off in one place means one fewer landing somewhere else, less clustering at a few airports implies that landings are more spread out over the day at the rest. This would happen at airports that can complement, rather than substitute, each other.

So far the FAA has championed efforts to promote efficiency only at the La Guardia, JFK, O’Hare and Ronald Reagan airports. The agency requires companies to use their slots at least 80 percent of the time, or else surrender them. Unused slots are not sold to the highest bidder, unfortunately, but reassigned by lottery.

Got any other ideas?

The industry hates both caps and slot trading. They claim that variable prices won’t be effective. Bill DeCota, aviation director at the Port Authority of New York and New Jersey, told the Wall Street Journal “There is no price that you could put in effect that would impact demand.” I guess the fundamental laws of economics don’t apply to air travel.

Airlines clamor for an upgrade of navigation instruments instead. Satellite technology will let planes keep shorter distances from each other during take-off and landing, increasing the traffic volume that airports can handle. The diligent Federal Aviation Administration has already proposed a system, “NextGen.” The toy, alas, won’t be on the shelves for Christmas. Not until 2025.

So-called “demand management” would make air travel less appealing to consumers: tickets would be more expensive, layovers more frequent and longer. But consider the alternative: as airlines cram their schedules with more flights to keep up with rising demand, delays will become longer, cancellations more frequent. At some point travelers will not be able to plan their trips at all: planes will take-off, literally, whenever they can. That may suit college students going home for the summer just fine, but I can’t imagine whom else.

A cap-and-trade system should not be a substitute for increasing capacity. In fact, to resort to cutting out flights amounts to an admission of failure. The industry should (and will) invest in new airports, expand existing ones, and adopt technologies that increase the number of slots per airport. Unfortunately, for the next 20 years, efficient rationing is the best we can do.

*American Airlines, United Airways, Continental, Delta, Northwest Airlines and US Airways

Technorati tags: economics, flight delays, air travel, congestion, cap-and-trade