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Delays at Logan Airport Case Solution

Solution Id Length Case Author Case Publisher
2554 1487 Words (6 Pages) V.G. Narayanan, George Batta Harvard Business School : 102011
This solution includes: A Word File A Word File

The case demonstrates the serious predicament that exists at Logan Airport, where substantial problems with delays are having an effect. The delays, which were mostly brought on by the challenging weather conditions, have had a significant influence on the profitability of both the airport and the airlines that are affiliated with it. As a result, Logan Airport has become the fifth most delayed airport in the United States. The study is being conducted with the intention of lowering wait times and increasing profitability, with a particular emphasis on peak hours, which are when the majority of problems occur. Implementing a peak period pricing strategy in order to provide an incentive for airlines to reschedule their flights or divert their flights to smaller airports was determined to be the best option. This method was considered to be the best solution. The imposition of peak-period landing fees would benefit operations, particularly when unfavorable weather conditions are present since it would alleviate overcapacity concerns, considerably reduce delays, and help cut overall wait times.

Following questions are answered in this case study solution

  1. Which of the solutions explored in the case do you favor the most: peak period pricing, additional runway, developing other regional airports?

  2. Over scheduling problem happens only when scheduled number of operations (landing and take-off) exceeds the capacity.” True or False?

  3. What do you think about the landing fee approach that was implemented in 1988?

Case Analysis for Delays at Logan Airport Case Solution

1. Which of the solutions explored in the case do you favor the most: peak period pricing, additional runway, developing other regional airports?

Implementing peak-period pricing was determined to be the most effective strategy after keeping the primary objective of increasing profitability in mind throughout the investigation. Not only will this provide more cash for the airport, which can be utilised for future initiatives, but it will also provide an incentive for airlines to change their schedules in accordance with the new information. The current situation at Logan, where the split between turboprop, regional jet, and conventional jet is 40/18/42, led us to discover that setting a peak-period landing fee of $200 maximised profit, increasing it by 13.51 percent compared to the option of not charging a landing fee because the reduction in delays. Because a rise in the price to $250 results in a drop in overall profit for airlines of -0.05 percent, which is unproductive, we think that the best point for the fee is $200. When looking into the future, it appears that increasing the peak-period landing fee to $250 now maximised profit by increasing it by 13.29 percent. This was accomplished by using one of the possible outcomes for 2015 in which the split between turboprops, regional jets, and conventional jets goes to 10/30/60. This is probably because of the rise in the number of conventional planes, which are less affected by the rise in landing fees as a result of the greater operating expenses that are connected with delays and the larger passenger count. This is particularly pertinent since the peak-pricing system has the largest influence on turboprop flights, which are the slowest planes and cause the most delays. This is because having a huge impact on turboprop planes has a large impact on turboprop planes. In addition to this, this will encourage a sizeable number of passengers, particularly those travelling for leisure, to search for flight options during times of low demand so that they may avoid paying higher rates. Because of this, flights will be dispersed more equally during a 24-hour period, which will reduce demand and, as a result, congestion during peak hours. PPP and the accompanying fixed expenses have demonstrated to be inefficient for smaller aircraft, which discourages such aircraft from flying during peak hours, which would also reduce the amount of time that passengers are forced to wait for their flights. According to the findings of the study, the implementation of a peak-period pricing structure at Logan Airport is not only feasible for the airport if the existing aircraft split continues, but it would also be of tremendous advantage to the airport if the new split were to take place.

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