The Hidden Cost of Airline Unpunctuality

The 'soft' cost of delay - for example, loss of market share due to unpunctuality - is a dominant component in the economics of airline delay. Nevertheless, it remains poorly understood, with almost no quantitative costs published. Drawing on primary survey data and the literature, including Kano satisfaction factors, passenger airline-switching propensity is modelled. Using our peer-reviewed estimate of the average soft cost, we newly estimate its distribution as a function of delay duration. Policy implications emerging from the economics of punctuality target-setting and disruption management techniques are discussed. A shift in strategy from managing delay minutes to delay costs is proposed. © 2012 LSE and the University of Bath