Silke J. Forbes

The Effect of Air Traffic Delays on Airline Prices

The relationship between air traffic delays and competition has received much attention recently. I estimate the price responses to longer flight delays in competitive and non-competitive markets, using a policy change to instrument for potentially endogenous flight delays in the price regressions. I find that prices fall substantially in competitive markets but not so in non-competitive markets. Quantile regressions on the price distribution imply that prices fall most for business travelers who have sufficient flexibility to switch to more restricted tickets while the price decrease is smallest for the least elastic travelers at the top of the price distribution.

Do Airlines Pad Their Schedules

Abstract We analyze how schedule times, actual flight times and on-time performance have changed in the U.S. airline industry between 1990 and 2016. We find schedule times have increased in most years, with the largest increases after 2008. Actual flight times and total travel times have also increased but by less than schedule times and the gap has grown over time. This has resulted in reduced arrival delays even though flights are, in fact, taking longer to complete. We discuss the implications of these findings for quality provision and information disclosure within the airline industry.