Saturday, October 26, 2013

Tarmac delays cost United Airlines $1.1mm

It turns out that the Department of Transportation (DoT) really isn’t joking when it comes to penalizing airlines when passengers are stuck out on the tarmac. United Airlines was hit with a record $1.1 million fine this week based on just one day in July 2012, a day when thirteen flights were stuck on the ground for more than three hours at the carrier’s Chicago O’Hare hub affecting more than 900 passengers. The flights were impacted as major thunderstorms rolled through the Chicago area bringing heavy rains, limited visibility and lightning. Ultimately the airline had more planes on the ground at O’Hare than they had gates available to deplane passengers. This led to the flights exceeding the 3 hour limit by as much as 77 minutes. While there are carve-outs in the DoT regulations for “safety, security or air traffic control-related reasons” these delays were deemed outside those categories.


Perhaps most damning in the DoT report is the finding that United did not implement their delay mitigation plan during the storm. Every airline is required to have such a plan with specific actions which will help reduce passenger time on planes should extended delays appear likely. For United the plan includes options such as tandem parking of smaller regional jets at a gate or a “Deplane and Go” program which cycles planes through a gate without putting passengers back on, speeding the process. None of these actions were taken during the delays that day. At one point the airline even admits that their plan probably wouldn’t have worked had they implemented it, “United had several options contained in its plan to deal with a gate saturation event that, by United’s own admission, would not have worked in this case.” That’s not good.

United indicated in their response to the DoT that the congestion on the ramp was too great for those options to be considered and that the continuing rain and lightning made aircraft movements and deplaning unsafe for much of the afternoon. To that end the carrier appealed to the safety exception in the rule; the DoT disagreed overall. The DoT report notes that United did not contact other airlines or airport officials to inquire about other gate space to offload passengers and that the carrier chose to not divert inbound aircraft to other airports, even as they knew the operations at O’Hare were overwhelmed with the planes on the ground. The decision to not divert was based on reducing the inconvenience to passengers according to United’s response to the DoT.


A couple United jets on the ground at ORD on a much sunnier day

It is also interesting to note that 11 of the 13 planes were regional jets operated by other airlines under contract and as codeshare partners with United. A rule in place at ORD requires that a mechanic from the operating carrier be on-board a plane if it is being moved without the cockpit crew in place. This rule was particularly troubling for the 11 United Express flights from 5 different regional carriers as mechanics from each of those airlines were not necessarily available in Chicago to assist with moving the aircraft.

The $1.1 million penalty will be split in to three parts. The largest – $475,000 – is payable to the federal government. Another $185,000 is being credited back to United in lieu of refunds and compensation paid to the 939 affected passengers on the offending flights and also other flights which were affected that day. This part is already accounted for in terms of comp paid out; the DoT calculated the number based on 100% of airfare refunds issued, 80% of any TCVs and 2cpm on any goodwill miles issued, The balance – $440,000 – is being credited to United to offset the purchase and operation of a new aircraft monitoring system on the ground at O’Hare which the company believes will help reduce the risk of similar incidents in the future.

Historically I’ve been pretty cynical on the 3-hour rule based on the theory that that airlines should be able to put in place a program and manage it themselves rather than have a government-mandated version. It seems that United failed doubly in this case, both by not drawing up a feasible plan and then by not bothering to try once they realized the plan was failing. That’s not good at all and certainly won’t help as the carrier attempts to rebuild its image of operational reliability.

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