After the American Airlines fourth quarter earnings call on Thursday, CEO Robert Isom met with employees for a ‘State of the Airline’ conversation. In his remarks, a recording of which was reviewed by View From The Wing, he recapped the strong operational performance of the airline over the holidays. While Southwest and even Delta struggled, American operated their schedules normally.
And, he says, their strong performance has continued into January. In fact he says that other airlines making strong claims being the best in performance are making it up.
I heard others claim that they may be the most on time so far this year, or had the highest completion factor, that’s all B.S. We are! … Through the first three and a half weeks of January, tough operating conditions, American Airlines has the highest completion factor in the business, the highest arrival performance in the business.
This got me thinking about why we trust the statistics that are reported by airlines. We take on-time percentage, and number of cancelled flights, at face value.
- We do see in real time when a flight cancels, it’s hard to fake completing a flight.
- These are statistics reported to the government and there are consequences for intentional fraud. Moreover there’s securities fraud if false statements induce investments. Yet there’s fraud and corner cutting all around us!
On the other hand Delta is known for refusing to classify a flight as cancelled, even when the flight doesn’t operate the same day or with the same aircraft as planned. When they want to report a zero cancellation day, they just don’t cancel flights. A flight might simply be delayed 24 hours, and operate even if all passengers were rebooked on other flights. That’s certainly juking the stats.
A new paper in the Review of Accounting Studies takes advantage of the increased scrutiny of former Arthur Anderson clients who moved to new auditors in the aftermath of Enron’s collapse to estimate corporate fraud, and finds that only one-third of frauds come to light. 40% of companies are committing accounting violations, and 10% major frauds.
The airline industry – and airline reports to the government – are not immune. In 2021 United Airlines paid $49 million to resolve criminal fraud charges in which the federal government accused them of “providing falsified parcel delivery information over a period of years and accepting millions of dollars of payments to which the company was not entitled.” And there was a coverup: “individuals at United worked to conceal United’s automation efforts from the USPS, as they knew that the data being transmitted was fabricated.”
Meanwhile last year Delta Air Lines paid $10.5 million for “allegedly falsif[ying] barcode scans of mail containers delivered to Postal Service facilities or federal facilities to make it appear it was meeting requirements for on-time delivery, and ensure full payment.” American Airlines settled similar charges for $22 million.
The good new is that – for now at least – American Airlines does appear to be running better than it has been in four years. But I’ve heard flight attendants talking about ‘work to rule’ and they and pilots are facing protracted contract negotiations. Hopefully this lasts.
With the way airlines “pad” their schedules it’s hard to believe any flight is ever late. I don’t know the algorithm carriers use to calculate this but routinely what the public sees as the flight time between A and B is anywhere from 5 to 20+ minutes longer than what is actually takes. Since on time percentages are calculated on arrival times a flight could be 20 mins or more late leaving and still arrive “on-time”.
AA is running better but on a flight out or ORD for SNA recently the F/A welcomed everyone on board American flight xxxx operating non stop to Orange County Airport with “continuing service to John Wayne airport”. Huh….Well….OK!
Picard
Tim Dunn with cherry picked DOT stats in 3,2,1….
The DOT statistics are not cherrypicked. They are the same for every US airline AND, for airlines that operate regional airlines under their mainline code, it includes them.
The DOT has reported on-time performance for flights through October 22. On-time performance reporting by the DOT is 2 months delayed and their report for January 2023 which includes on-time through November 2022 should be out by now – but it is not.
For the month of Oct 2022 and YTD 2022, DL has the highest on-time. UA has the #2 highest OT for Oct but they are #3 for YTD through Oct while the reverse is true for AS which is #3 for Oct but #2 YTD. AA was #4 in Oct and #5 YTD. AA’s performance in June at #7 and July at #6 pulls down its performance – but we get to exclude whole months only when we cherrypick data.
Picking any random 3 weeks and proclaiming that someone is on top IS cherrypicking because DOT statistics aren’t measured that way; not many data points are measured by a random collection of 3 weeks when we measure time by weeks, months, quarters and years.
The real surprise is how B6 can consistently end up near the bottom of the industry in on-time – so far in 2022 beat only by Allegiant.
The anomaly with OT data is that AA and AS mainline performs worse than their regional partners while for DL and UA, mainline performs better and the gap between mainline and regional performance – positive or negative – is widest with American. Maybe Mr. Isom can explain to us why DOT data is wrong – when the standards are applied the same for every carrier – and why AA regional partners do better than AA mainline before telling us that competitors are spewing BS.
You, too, can read the DOT Air Travel Consumer Report by googling it.
If the DOT is seriously considering new consumer-protection regulations on commercial airlines, then I feel like changing the definition of cancellation for statistical purposes would be an easy win. If a flight’s estimated arrival time changes by more than 4 hours, then it should count as effectively cancelled. At that point if the airline wants to pad their statistics, they can eat the cancellation and create a new flight number using the updated departure time, if they think they can hit that new target. But doing so would force them to cancel the original flight number, and therefore open them up for refund liability. It becomes a serious business decision at that point, whether they want to prioritize their stats at the risk of revenue.
Luke
Gary and others vastly overstate Delta’s lengthy delays but it amounts to a handful of flights per week. And it isn’t like other airlines don’t have lengthy delays. The DOT doesn’t report average delay but they do track it and Delta’s average delay is still at or near the lowest. The longest average delay comes from JetBlue. And even when Delta does have long delays they often move passengers to earlier flights
The DOT really does track and report the stats that matter the most.
Things could only improve at American Airlines since Parker (former American Airlines CEO) is gone.
The airline need to allow a much longer turnaround time to allow for delays. They planes are barely cleaned with the vet short turnaround time and often run late if ideal conditions don’t prevail. I’ve found United is the word on some routes..SFO-MEX… This flight is always late due to incoming aircraft coming in late.. often hours behind schedule… They need extra standby planes to avoid this.. But it’s always profits at the expense of customers.. If they had compensation like Europe then it would be different. Our government is in cahoots with Big business
You mean AA’s hubs in Phoenix, Dallas, and Charlotte all avoided the worst of Winter Storm Elliott, which caused about 20,000 cancellations and twice as many delays?
Whatever American Airlines says, they are still a crappy airline. CEO Robert Isom of American Airlines likes to talk. He has a long way to go to even come close to United or Delta but he will continue to talk. At least, with the airlines padding their schedules, we know that they are going to get us there pretty close to the published arrival time. Usually before, thus arriving on time. American is no different.