Calculating the costs of flight delays

Marketplace Staff Oct 19, 2010
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Calculating the costs of flight delays

Marketplace Staff Oct 19, 2010
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JEREMY HOBSON: So, the other day when I flew from my home in New York
out here to Marketplace Headquarters in L.A. We got stuck on the tarmac for a while at JFK. Big surprise. But it turns out we can now put a price tag on flight delays. The cost is more than $32 billion dollars a year. Marketplace’s Mitchell Hartman joins us now live with the details. Good morning, Mitchell.

MITCHELL HARTMAN: Good morning, Jeremy.

HOBSON: So who came up with this and how did they come up with this precise figure — $32.9 billion?

HARTMAN: Researchers at U.C. Berkeley working for the Federal Aviation Administration added up all the costs that pile on with a flight delay. So let’s say you’re sitting on the tarmac, you’re not flying to O’Hare or LAX. There’s the value of your time — you’re waiting, you’re not working. There’s more time wasted if you miss a connection, let’s say buying an expensive airport lunch, maybe a hotel room. The cost just to passengers totals nearly $17 billion.

HOBSON: So that’s $17 billion. We talked about that $32 billion. Where does the rest of it come from?

HARTMAN: Airlines lose about $8 billion a year — that’s extra fuel, paying the crew, wear-and-tear on their equipment. They also don’t schedule as many flights because they know that some airports and some routes are prone to delays. Then there’s another $4 billion in lost demand — this is people deciding to drive, maybe take the train, not go anywhere at all because airport delays are such a hassle. All this delay makes business less efficient. It shaves about $4 billion off of Gross Domestic Product. May sound like a lot, though U.S. GDP totals more than $14 trillion.

HOBSON: All right. Marketplace’s Mitchell Hartman, thanks so much.

HARTMAN: You’re welcome.

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