Airlines compete, in part, by offering lots of origin-destination pairs. Not matter in which backwater burg you reside, they strive to get you to every equally lonely outpost. That might overstate the case, but most airlines try to offer options that connect most reasonably sized cities. Most airlines consequently favor hub-and-spoke configurations for their networks that funnel passengers from all over into a limited set of points (like Chicago and Houston) before heading back out to a range of cities.
But how should an airline arrange its flight into a hub? One option is to bunch arrivals closely together so that departures can similarly be bunched together. Call that peaked scheduling. Alternatively, the airline can have a smoother flow of planes coming in. Arrivals to a hub are spread across the morning as opposed to, say, having a large number of planes land between 9:00 and 10:00.
Peaked scheduling was used by most airlines for many years but has been on the outs for the last decade or so. Now, however, it is making a comeback (Airlines Create Rush Hours, Crowds and Full Flights, Sep 10, Wall Street Journal).
Instead of spacing flights evenly throughout the day, American in August started bunching them together. The change restores an old format of “peak” scheduling, grouping flights into busy flying times followed by lulls when gates are nearly empty. After Miami International, American next year will “re-peak” schedules at its largest hubs in Chicago and Dallas-Fort Worth. …
In Miami on a typical weekday, 42 flights depart between 9 and 10 a.m. Then between 10 and 11 a.m., only a handful are scheduled to take off. The process repeats during the day with 10 “banks” of flights that fill about 45 gates at a time.
The interesting part of this is that a peaked versus non-peaked schedule is really a trade off between customer service and operating cost. Let’s face it, 45 gates is a lot of gates. Plus all of those planes require crews to clean and load. American has had to spend a bunch to be able to handle its revised schedule.
There are added costs to re-peaking. American hired 67 more gate agents and 150 baggage handlers and other ground workers before the August change. It had to purchase more belt-loaders, dollies and tugs that push planes out from gates.
Beyond that, a peaked schedule increases the amount of time a plane is on the ground between flights. In principle, that means that an airline needs more planes to execute a given number of flights.
But there is a positive side to having planes wait longer between flights: Customers have to wait less. Arranging flights in a set of banks means that a customer searching for a trip sees more itineraries with reasonable, short layovers. They find themselves with undignified dashes across the airport (if you’ve never flown into Miami, let me assure you that the airport is fairly described as “sprawling”) but they will not have to find some way to kill three hours before a connection.
According to the article, American claims to have fuller Miami flights since the change and expects an extra $200 million in revenue once it re-peaks all its hubs.
The first thing to wonder here is whether it is actually possible to put more people on planes in the current market. Airlines have already been operating at historic (or near historic) levels of utilization. That is one of the reasons why fares have generally been robust. That probably suggests what is really going on here. Given that tickets prices are high and industry consolidation has helped keep the players from launching into price wars, a few empty seats is a real missed opportunity. If shortening layovers fills those seats at a high price, then it is worth the extra operational expense. That leads to a reasonable prediction: If air travel goes into a slump, airlines will back off of peaked schedules. If planes are going to have empty seats with a peaked scheduled (or airlines need to severely discount), it will not be worth the cost and airlines will once again spread out their schedules.
A final point, American is not bearing the full cost of its peaked schedule. Passengers with shorter layovers are less inclined to hang out in bars. Restaurants in the airport have seen their business drop. Further, Miami serves a lot of international flights and now more of passengers arrive to immigration queues all at once. Customs and Border Protection had cuts its Miami wait times significantly before American mucked with its schedule. Clearly further improvements are going to be harder to come by.