Flight cancellation as a reaction to the tarmac delay rule: An unintended consequence of enhanced passenger protection

We examine the effects of the US DOT׳s tarmac delay rule (effective April 29, 2010) on flight cancellations and gate departure delays, using carrier-level panel data for the period between May 2008 and April 2012. Our results suggest the DOT׳s investigations of tarmac delay incidents triggered risk-averse behavior by investigated carriers, which increased flight cancellations and gate departure delays to avoid violating the rule. Carriers׳ preemptive flight cancellations are estimated to have affected about 308,900 passengers in 2011 alone. The results also suggest that these side effects persist for at least two years after the investigations, having larger adverse effects on passengers booked on the highest and lowest frequency routes. The costs and benefits of the rule need reevaluation.