Causes and Effects of Air Traffic Delays

This study uses aggregated data on concentration, delays, and airfares from the US airports to shed light on two issues. First, we examine the concentration-delays relationship to contribute to the airport-congestion self-internalisation debate. Our study is the first investigation of this issue that uses data on sources of delays. Second, we evaluate whether increases in flight delays result in lower airfares when travelling from an airport. Our empirical results are mixed: while total delays are positively correlated with airport-level concentration (contradicting the self-internalisation hypothesis), the variance of delays at large and medium hub airports does fall as concentration increases. We also find that an increase in airport concentration consistently decreases the share of delays that can be deemed endogenous to the airline. The negative relationship between delays and prices is confirmed, and estimates of this effect are similar to those found in the relevant literature. Of the various sources of delay, weather and late aircraft have the strongest negative impact on prices.