DOT TO AUDIT IMPACT OF TARMAC DELAY RULE
February 27, 2015
In accordance with a Congressional mandate included in the Federal Aviation Administration (FAA) Modernization and Reform Act of 2012, the Department of Transportation’s (DOT) Assistant Inspector General for Surface Transportation Audits will conduct an intensive audit of DOT’s tarmac delay rule. The audit, scheduled to commence in late February, will last an undetermined amount of time and assess the following: (1) the rule’s effect on carriers’ decisions to delay or cancel flights; and (2) OST’s independent analysis of how flights have been impacted by the rule.
The tarmac delay rule, which prohibits domestic and international carriers from allowing an aircraft to remain on the tarmac without offering passengers an opportunity to deplane for three or four hours, respectively, has been in effect for several years. While evidence exists that the rule has reduced the number of tarmac delays – in the 12 months following the introduction of the rule, the number of tarmac delays exceeding 3 hours decreased from 693 to 20 – skepticism remains that these reductions are largely the result of increased cancellations. This is the issue on which DOT’s audit will focus.
The question of increased cancellations was addressed in a recent study commissioned by DOT, which determined that while the tarmac delay rule did adversely impact cancellations in summer 2011, similar impacts were not seen in 2010 and 2012. Independent research, however, suggests that the industry has seen a strong surge in the number of flight cancellations under the current tarmac delay regulatory interpretation. One particular study noted that after accounting for the cost of hotel and airport fees lost, rebookings, crew accommodations, and offset fuel costs, compliance with the tarmac delay rule has been estimated to cost international carriers approximately $80 million each year, and approximately $907 million over the 10-year period from 2011-2020. Losses suffered by domestic carriers could potentially be much higher.
Coincidentally, in 2014, carriers reported the lowest number of tarmac delays longer than three hours on record. According to the Department’s most recent Air Travel Consumer Report, 2014 saw 30 tarmac delays of more than three hours for domestic flights and nine tarmac delays of four hours or more on international service. This is down from the 2013 figures of 84 domestic flight delays and 55 international flight delays. U.S. airlines canceled approximately 1.5% of scheduled domestic flights in the last month of 2014, up from .9% in November 2014.
We will continue to keep our readers updated on this issue and provide a summary of the findings of the Department’s audit as soon as they become available.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).