Flights delays have always been problems in Logan Airport that was ranked in 2001 as the
fifth most significantly delayed airport in the country. Massport has planned a $1 billion
Modernization Program to help mitigate delay problems.
Problem #1
The delay costs for 19-seat turboprop is around $348 per hour per plane, the delays cost for
50-seat regional jet is around $640 per hour per plane, and the delays cost for 150-seat
conventional jet is around $1585. Assuming the value of a passengers time is a $25.70 per
hour, and a 70% passenger load factor.
1. With arrival rate 50, delay times is 6.5454 minutes, the delay costs would be
With arrival rate 55, delay times is 12.52 minutes, the delay costs would be
With arrival rate 59, delay times is 60.5 minutes, the delay costs would be
1. The FAA also only deems a flight delayed if the flight arrives or departs more than
fifteen minutes past schedule. Therefore, with the arrival rate 50 and 55 there will
be no delay costs because the delay time will be in 15 minutes. Only with the
arrival rate 59, the delay time would be 60.5-15=45.5, the delay costs would be
From the exhibit 2, the estimated revenue per passenger for turboprop, regional jet and
conventional jet is $230, $154 and $402.Assuming the capacity is remain 70%, the
percentage of the delay costs of the planes would b
– 19-seat turboprop, 523.105/(19*0.7*230)=16.9%
– 50-seat regional jet, 1167.454/(50*0.7*154) =21.65%
– 150-seat conventional jet, 3248.32/(150*0.7*402)=7.69%
16.9%, 21.65% and 7.69% are all account for lot of the percentage of the revenue, the
FAAs definition of the delay is not reasonable.
1. The peak-period pricing will help to control the over scheduling because the delay
costs are too high over the arrive rate 55. With peak-period pricing, the arrival rate
probably could be control in a certain rate such as under the rate 55, and it would
help the over scheduling problems.
Problem #2
The estimated revenue per passenger for turboprop is $230, regional jet is $154, and
conventional jet $402. Assuming with 70% load factor. The revenue would be
– Turboprop 19*0.7*230=$3,095
– Regional jet 50*0.7*154=$5,390
– Conventional jet 150*0.7*402=$42,210
a. With $100 peak-period landing fee,
– Turboprop, 100/3095=3.23%
– Regional jet, 100/5390=1.85%
– Conventional jet, 100/42210=0.23%
With $150 peak-period landing fee,
– Turboprop, 150/3095=4.84%
– Regional jet, 150/5390=2.78%
– Conventional jet, 150/42210=0.35%
With $200 peak-period landing fee,