Logan Airport Case Study

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  • Topic: Runway, Delay, Airport
  • Pages : 5 (1522 words )
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  • Published : March 6, 2011
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Delays at Logan Airport
1. A) Delay in minutes per plane:
Λ = 50| Λ = 55| Λ = 59|
6.54 minutes| 12.52 minutes| 60.5 minutes|

Delay costs:
Turboprop:
Λ = 50 6.54min*($352 + 65%load*15passengers*$30.9)/60 = $71.20 Λ = 55 12.52min*($352 + 65%load*15passengers*$30.9)/60 = $136.31 Λ = 59 60.5min*($352 + 65%load*15passengers*$30.9)/60 = $658.72 Regional jet:

Λ = 50 6.54min*($672 + 65%*50passengers*$30.9)/60 = $182.71 Λ = 55 12.52min*($672 + 65%*50passengers*$30.9)/60 = $349.78 Λ = 59 60.5min*(672 + 65%*50passengers*$30.9)/60 = $1690.22 Conventional jet:

Λ = 50 6.54min*($1590 + 65%*150passengers*$30.9)/60 = $501.70 Λ = 55 12.52min*($1590 + 65%*150passengers*$30.9)/60 = $960.44 Λ = 59 60.5min*($1590 + 65%*150passengers*$30.9)/60 = $4641.11 B) According to the FAA definition a flight is delayed only if it arrives more than 15 minutes past schedule. Therefore, there are delay costs only in the case of an arrival rate of 59: Delay time = 60.5 – 15 = 45.5 minutes

Turboprop 45.5min*($352 + 65%load*15passengers*$30.9)/60 = $495.4 Regional jet 45.5min*($672 + 65%*50passengers*$30.9)/60 = $1271.16 Conventional jet 45.5min*($1590 + 65%*150passengers*$30.9)/60 = $3490.42 C) The FAA should have a more relaxed definition of delay.

D) Peak-period pricing does prove to be a potential solution to reduce the costs of over scheduling. As seen in our calculations, increasing the arrival rate per hour dramatically increases the costs incurred by the airport. Shown above, if peak-period pricing can even reduce the arrival rate from 55 to 50 during peak hours, hundreds of dollars can be saved as a result of reduced delays 2. A) Revenue per plane:

Turboprop: 15passengers*65%load*$230 = $2242.50
Regional jet: 50passengers*65%load*$154 = $5005
Conventional jet: 150passengers*65%load*$402 = $39195
| $150 landing fee| $200 landing fee| $250 landing fee| Turboprop| 6.69% of revenue| 8.92% of revenue| 11.15% of revenue| Regional jet| 3% of revenue| 4% of revenue| 5% of revenue| Conventional jet| 0.38% of revenue| 0.51% of revenue| 0.64% of revenue|

We believe a peak-period landing fee representing more than 3% of revenue would have a significant economic impact on airlines. Therefore, our analysis shows that for all landing fees: turboprobs would be the most affected; regional jets would feel a significant economic impact; and conventional jets would be barely affected. B) i. Delay in minutes per plane:

Λ = 55| Λ = 45| Λ = 40|
12.52 minutes| 4.57 minutes| 3.6 minutes|

The total cost airlines face = Delay costs + Peak-period landing fee Assuming a fee of $150 and a peak-period demand of 55 planes per hour: Turboprop 12.52min*($352 + 65%load*15passengers*$30.9)/60 + $150fee = $286.32 Conventional jet 12.52min*($1590 + 65%*150passengers*$30.9)/60 + 150fee = $1110.44 Assuming a fee of $200 and a peak-period demand of 45 planers per hour: Turboprop 4.57*($352 + 65%load*15passengers*$30.9)/60 + $200fee = $249.76 Conventional jet 4.57*($1590 + 65%*150passengers*$30.9)/60 +$200fee = $550.58 Assuming a fee of $250 and a peak-period demand of 40 planes per hour: Turboprop 3.6*($352 + 65%load*15passengers*$30.9)/60 + $250fee = $289.2 Conventional jet 3.6*($1590 + 65%*150passengers*$30.9)/60 + $250fee = $526.16 Thus, turboprop airplanes would prefer a landing fee of $200 and conventional jets would prefer a landing fee of $250. ii. To recall, our analysis in A) showed that whereas a peak-period pricing would significantly affect turboprops and regional jets, it would have very limited effect on conventional jets. Therefore, PPPs effect on delays would very much depend on the particular mix of airplane types using Logan during a peak hour. If the Logan is predominantly used by smaller airplanes, the peak-period landing fees would potentially solve the delay problem. On the other hand, if mostly conventional jets use the airport, the PPP would have an insignificant effect on...
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