INTERVIEW: Delay? Repay!

By Reuvain Borchardt

Dr. Tolga Turgut and Dr. William Rankin discuss recently proposed federal rules to mandate compensation to consumers for flight delays.

Dr. Tolga Turgut has decades of experience managing airports and consulting for airlines.

Dr. Turgut is an Associate Professor at Florida Tech College of Aeronautics, from which he has received his B.S., M.B.A., and Ph.D. He also has an Associate Degree in Tourism Business Administration from Bospohorus University, in his native Istanbul.

Dr. Turgut also teaches Air Transportation Management, Airline Management, and Aviation Business Simulation courses at the Florida Institute of Technology and the University of Technology Panama.

Dr. William Rankin has three decades of airport management experience — as director of airports in Cedar Rapids, Iowa, and El Paso, Texas; and deputy director of Reagan Airport in Washington, D.C., and Fort Lauderdale Hollywood International Airport in Florida.

He has a B.S. in Aviation Management; an M.A.S. in Aeronautical Sciences; and a Ph.D. in Aviation/Aerospace Business Administration.

Dr. Rankin is an adjunct professor at the Florida Tech College of Aeronautics. He has over 20 journal publications, and researches Multi-Airport Logistics Systems and Aviation Security. As an ambassador to NASA and Jet Propulsion Laboratories, he also researches the future of space flight and colonizing the moon and Mars.

**

Tell us about these new regulations that were proposed by President Biden.

Turgut: Actually, what he’s proposing is something that is already law in the EU and Canada — mandatory reimbursements by the airlines for delayed flights. In the U.S., unfortunately, passengers’ consumer rights are not as advanced as they should be.

Obviously, airlines don’t like to be late; that affects them negatively in many aspects as well. It’s a burden on the economy in general when people have delayed flights or canceled flights, because people miss connections, meetings, and conferences, causing a decline in productivity as well as economic losses.

In the EU, according to the number of hours of delay, they have different compensation rates that passengers receive. But, unfortunately, in the U.S., the passengers do not have many rights that they can claim. It’s basically, as I tell my students, the more noise you make the more you get, like, you know, a free ticket or a voucher or something else. That’s not the way things should be.

I’m anticipating more flight delays this summer as air travel continues to grow following the pandemic. We still haven’t returned to the 2018-2019 air travel levels; we are approximately 10 to 20% below that because there’s an understaffing issue, especially in the U.S., because a lot of people left the industry. So the airlines are burdened with the staffing issues, which is propagating these delays.

Demand is coming up a bit slower than forecasted. The U.S. domestic traffic came back, but the long-haul flights didn’t come back right away, because the business travel takes much longer to recover after a pandemic. I’m anticipating more flight delays this summer, and that’s why I think President Biden and his administration are advocating for this.

What specifically would be given to the customers under these rules?

Turgut: Nothing specific has been announced yet, but they want some form of compensation. It can be vouchers for food and beverages at the airports, hotel accommodations, or monetary compensation depending on the hours of delay, as they have in the EU; for example, where if you are delayed between three to four hours for a flight of under 1,500 kilometers, which is like a three-hour flight, you are eligible to be reimbursed 250 euros. If it’s more than a 1,500-kilometer flight, then you’re looking at 400 euros, which is around $435.

These vouchers would only be mandatory if the delay is the fault of the airline.

Turgut: The FAA categorizes the causes of flight delays: Number one is airline issues, number two is late-arriving aircraft, number three is airspace issues, and number four is extreme weather.

In 2022, 40% of the delays were related to airline issues. In 2018, airline issues were 30% of the delays. So the share has increased significantly. And late-arriving aircraft, which is mostly an airline issue, was 38%, at number two. So 78% of the delays had to do directly with the airlines. That’s why Biden is making this suggestion.

Currently, if there’s a delay, it’s just up to the airline to decide to give you whatever they want to?

Turgut: Yeah, there’s nothing you’re entitled to.

The other reason for these delays is that now the airlines are challenged with high load factor pressures. So, if you are delayed, and there’s a backlog of passengers at the airports, the next flights will be full as well; there aren’t too many empty seats, so they cannot work down the backlogged traffic. Thirty years ago, the load factor pressure of the airlines was not this high, so it was easier to work through the backlogs via the subsequent flights.

Why were there more seats available then?

Turgut: Back then they could get by without filling up the planes; a 60-70% load factor could be enough to break even. Now, with the increased costs, they can’t do that. The break-even threshold for airlines is within the range of 75-85% load factors. They deliberately overbook now, counting on missed connections and no-show passengers, which they didn’t do in the past.

Profit margins are very small. People have a misunderstanding about airline economics. The airline industry is revenue-rich, but not profit-rich.

What do you think prompted the Biden administration to do this now? Was it a response to the Southwest Airlines fiasco at the end of last year?

Turgut: I think that made it more obvious, yes. Because Southwest is the number- one domestic airline in the U.S.

Do you think these new rules, which would necessarily increase costs for airlines, will raise prices of airline tickets?

Turgut: Of course, it would have economic implications, and it may raise the ticket prices as well.

It feels like recently we’ve seen a lot of stories of problems with airlines. Does the data show that this issue is actually getting worse?

Turgut: In the first quarter of this year, 21% of U.S. flights were delayed. That’s a high number compared to previous years. And delays averaged 50 minutes.

Do you attribute that to the problem of staffing up after COVID?

Turgut: Yes, but it’s not just one reason. There are a number of reasons. There are staffing issues on the ground and on the flight crew. There are aircraft issues: Airlines are operating with fewer spare aircraft. There are resource-allocation issues as well: The flights are fuller than before, because if you have fewer resources, you need to fill up the planes more. That’s what’s happening.

Dr. William Rankin: Tolga, how does the pilot shortage factor into this?

Turgut: It does factor in because they gave the option of early retirement to some of the pilots, and some of the pilots took that and left the industry. Now there’s a pilot shortage in general. So that is propagating the issue as well. And many airlines are scrambling to make more agreements with universities to have more pilots coming in from the pipeline.

And the cost of human resources has gone up. So the airlines are very challenged. I see where President Biden is coming from; he’s trying to protect the consumers as well. And the government is asking for this because governments helped the airlines survive during the pandemic. Otherwise, most of the airlines were technically bankrupt.

As to all those pilots who took early retirement, can the airlines try to get them back? Are they just enjoying retirement too much?

Turgut: Flying planes is not like driving a car. You need to continuously do refresher trainings. So you can’t just jump back in.

You need to put them on the simulator training, and the simulators are filled up as well.

Rankin: There’s also a mandatory retirement age for pilots. There is a push to raise the mandatory retirement age to 67 from 65. And prior to that it was 60. You have a lot of the baby boomers that came up through the system, like me, who aged out of the system.

Turgut: One thing that the Congress can do to help airlines is increase the age of retirement to 67 or 68.

Some people think that one thing Congress can do to help the country would be to make a mandatory retirement age on themselves!

Turgut: [Laughs] If we have presidents above 70, we can surely have pilots at 67!

Dr. Rankin, can you tell us a little about life as an airport manager.

Rankin: It’s crisis management, responding from one thing to another, depending upon the daily operations of the airport.

What is the craziest story you had?

Rankin: The craziest story at any airport is when you have an actual aircraft crash. I’ve experienced a number of those, and it disrupts the entire operation.

But I did have one particularly unusual story. When I was at Reagan Airport in Washington, D.C., when Bill Clinton was president-elect, instead of going into the Air Force base at Andrews as presidents typically do, Clinton once landed at Reagan Airport — which closed the airspace. According to what air traffic control told me, something like 8,000 flights had to be diverted over the East Coast because of that. We handled a little over 1,000 flights a day at the 49 gates at the airport — it’s basically a one-runway operation. But when you close airspace for a president, it has a ripple effect up and down the East Coast.

When he got off the airplane, I informed him that we had the right to issue a civil-penalty violation of $10,000 for violation of our noise curfews. And I told him and the pilot, “If you plan to stay past 10 p.m., then you really need to move the airplane to Dulles, because if you violate the noise curfew, then we’ll assess a $10,000 penalty.”

That’s probably the craziest delay I’ve ever seen. Clinton never did that again.

And no sitting president has actually gone into Reagan, right?

Rankin: Not that I’m aware of.

What about you, Dr. Turgut — any interesting stories?

Turgut: When I was in the airport management part of my career working at Istanbul Ataturk Airport, I was the head of air service development and business development. It was one of the top 50 airports in the world.

We had the bird flu and SARS back to back a few years after 9/11. So we struggled a lot to maintain our international traffic coming from Asia during that time. When you have the traffic numbers declining, you try to compensate by increasing the revenue you make on the land side of the airports, where the passengers do the shopping, like duty-free food and beverage. So I studied with my team at the time how to change the traffic flow within the terminal building, considering the screening areas. If you change the traffic flow, you can increase the shopping dwelling time within the terminal building where the passengers may have more shopping opportunities. And I worked on a project to displace a few screening areas from one section to another section. It took me six months to get all the security clearances, because it’s not an easy process. Dr. Rankin knows this: We must get the approval from all the governing authorities, security, police, the governor and everything. And then I managed it after six months. And as soon as we changed the screening process and redirected the traffic more to the duty-free section, the per-head spending went up one euro. We had about 20 million passengers departing per year at that time from Istanbul Ataturk Airport. So that was 20 million euros of extra income for the airport just by making that change.

Rankin: In the U.S., we had an issue when 9/11 occurred and airlines were ramping back up: We had designed a number of our airports for more people in the public areas. But after 9/11, people wanted to come to the airport, get through security screening, and go straight to the gates. And so we had to completely rethink the design of where to put the concessions on those concourses in order to increase revenues again.

Do you have any tips for the best time to book airline tickets, to get cheap prices, and ensure that you’re less likely to get bumped?

Turgut: If you’re a leisure traveler and not particular about when you travel, look for tickets on Tuesdays and Wednesdays; those are the two days that the business travelers do not like to travel, because it breaks the week. Also look for flights between 10 a.m. and 4 p.m. Those are usually the off-peak hours in the terminal buildings. I used to give extra discounts to airlines to put flights during those times.

Because there’s less demand during these days and times, these flights may be cheaper and have a lower likelihood of being bumped.

What do you think of the TSA? A few years ago there were a lot of stories about how a high number of weapons were snuck through their screening. People are annoyed and delayed by TSA screening, and more than two decades since 9/11, TSA is not very beloved by the traveling public. What do you feel about the TSA?

Rankin: I’ll answer your question with a question: How would you like to be on an airplane that gets hijacked and is used as a missile to fly into a building? The fact that we haven’t had these instances since TSA ramped up speaks for itself, I believe.

Turgut: I think TSA needs a bigger budget and better training of their staff. I think that would help the process as well, to make it more smooth, more passenger-friendly. And I think the airports would be happy about that, because the faster the security lines progress, it’s better for the airports and airlines as well, because they don’t like delays, either.

TSA is necessary. Prior to 9/11, I remember flying into the U.S., and the security was like a joke. I did business with many different airports around the world, and the U.S. airports were the most loose and relaxed prior to 9/11. So, there was a need, I think, for more security anyway. But yes, it can be improved.

—

rborchardt@hamodia.com

This interview originally appeared in Hamodia Prime magazine.