Airlines have fun with expectations and incentives

Like many people these days (especially since 9/11), I love to travel, but I hate to fly. I've had so many bad experiences with airlines (particularly when I was living in Chicago and New York) that I now drive whenever it is feasible to do so. Since I live in the Mid-Atlantic, anything on the east coast is now a drive--10 hours to Boston for a basketball game, 16 hours through a blizzard to get to Vero Beach, FL, I'll do anything to maintain control and avoid the headaches of flying.
That's why I just chuckled at this article in the Wall Street Journal, which detailed the creative ways in which airlines have managed to improve their percentage of "on-time arrivals"--not by improving operations and streamlining the process (which JetBlue and Southwest have attempted), but by "schedule padding".

Your airline seat may not have much padding, but the airline's schedule sure does.

Delta Air Lines Flight 715 from New York to Los Angeles now takes more than seven hours to fly across the country, according to the airline's March schedule. That's an hour longer than the same flight in the same type of aircraft took in 1996. A Phoenix-Las Vegas flight at Southwest Airlines that used to be scheduled at 60 minutes now gets 80 minutes. What was once a two-hour American Airlines trip from Chicago to Newark, N.J., now is two-and-a-half hours, according to the airline's schedule.

Across the airline industry, carriers have been adding minutes to "block times"—the scheduled durations—baking delays into trips so that late flights officially arrive "on-time" and operations run better because flights pull into gates more often on schedule. Even though the recession has led airlines to cut flights and reduce congestion at many airports and in the skies, the move to pump up schedules has continued: Last year, most airlines added padding to scores of flights.

The last line of the excerpt is the real key. Airlines will make excuses for their scheduling, claiming that greater congestion and "more variability" have led the trend toward schedule padding. But in reality, there is little to no correlation.

I've written before on expectations and incentives, and I think this is an interesting example of both. Airlines are incentivized by Wall Street to maximize on-time arrivals, so they do so by whatever means necessary. If they can't actually improve service, they game the system. Similarly, passengers are incensed by late-arriving flights, but will be pleasantly surprised by an on-time arrival--even if it comes only because of lowered initial expectations.

I don't think many passengers are ignorant enough to fall for the ruse, but the behavior goes on nonetheless. If we can't actually deliver good results, maybe we should just lower expectations. Great business model.

[Wall Street Journal]