Las Vegas Review-Journal (Sunday)
Airline on-time rates about to drop
Regional airlines’ stats to be included in 2017
In recent years, big U.S. airlines have touted their operational improvements to curb delays and make flight schedules more reliable.
Yet this crowing comes with a big caveat: Most of the monthly stats the large carriers report don’t include their regional operations, mostly smaller, 50- to 90-seat jets that funnel travelers to and from hubs. Regional flying now constitutes almost half of U.S. domestic air routes, and when bad weather strikes, those flights are often the first to be canceled.
Starting next year, the Department of Transportation is closing that hole by requiring performance information on flights operated by a half dozen regional airlines. Regulators are aiming to make monthly performance at the major carriers reflect how well their regional operations did.
Monthly on-time rankings “have a significant impact on a carrier’s image and brand identity, which in turn has a potential effect on the decision-making of many consumers when deciding to purchase air transportation,” the department said Tuesday as it issued a final rule on the issue.
Also, the change would more closely correlate the Big Three’s domestic on-time performance metrics with Southwest Airlines Co., JetBlue Airways Corp., and Virgin America Inc., which do nearly all their own flying. Unsurprisingly, not everyone is happy with this move toward greater transparency.
“Regional airlines remain committed to delivering safe and high-quality air service to our customers-both our airline partners and our passengers — and caution against regulations imposing increased costs without a recognized public benefit,” said Faye Black, the president of the Regional Airline Association, which represents 24 regional carriers.
The new mandate for a fuller picture of on-time performance encompasses carriers with at least 0.5 percent of domestic passenger revenue, instead of the prior 1 percent. It will cover six regional airlines that fly for the legacy carriers and Allegiant Travel Co., the Las Vegas-based lowcost carrier. The change to a 0.5 percent revenue threshold will cover 99.68 percent of flight performance data for scheduled domestic service, the government said. Seven airlines — six of them regional — remain exempt.
NEWER TECHNOLOGY
Historically, regulators haven’t required such data because of the time and cost of compiling and filing monthly records. But newer technology has rendered this concern moot, several parties told the department in comments about the rule.
As a result of the reporting gap, the Transportation Department’s monthly Air Travel Consumer Report portrayed on-time data for only 38 percent to 55 percent of domestic flights last year, the department said. The monthly release shows a variety of airline performance metrics, such as mishandled bags, flight delays, passengers who were “bumped” because of oversold flights, and pet injuries.
Amid poor weather or other constraints at an airport, regional flights are typically the first a carrier will sacrifice when it comes to deciding which to operate.
One example cited by regulators: United Airlines’ on-time arrival rate at its San Francisco hub in July 2014 would have been 6 percent lower if code-share flights were included.
That’s just one month and one airport — one in which fog and low clouds regularly befall several flights — but carried across the industry, the reporting change probably would dent the carriers’ current reliability measures. That also could pose some difficulties for the marketing at an airline such as Delta, which has been touting itself as “The On-Time Machine” given its strong performance in this metric relative to its large peers.
REGIONAL AIRLINES’ DISADVANTAGE
Robert Mann, an aviation consultant and former American Airlines executive, explained how regional airlines are at a disadvantage when it comes to maintaining good on-time rates.
“The majors would move the larger mainline metal (accommodating more customers) and ‘command’ the cancellation or delay of smaller regional departures (fewer customers affected),” Mann said in a Wednesday email. Because of this, mainline and regional airlines show “a wide disparity” when it comes to on-time arrivals and completion.
On the bright side, this regulatory maneuver could spur the type of improvements in regional operations that would benefit passengers and make a 10 p.m. regional flight out of O’Hare less dodgy for a business traveler desperate to get home.
A 2011 report by the Government Accounting Office found that the DOT had insufficient data to make significant conclusions about flight delays. One finding: Smaller communities suffer far more flight delays and cancellations than their larger peers.
Hackers who relentlessly pursue banks might run into tougher defenses as the Federal Reserve and other U.S. regulators force the biggest lenders to plug any vulnerabilities.
Banking agencies recently released a proposal for rules that would require lenders — and the outside companies that serve them — to better safeguard themselves and their customers. Banks with more than $50 billion in assets and other systemically significant companies would have to establish board-approved protections that make them more aware of what’s happening in their own systems. The proposal also aims to keep successful cyberattacks from spreading damage through the broader financial sector.
Affected companies “would be required to be capable of operating critical business functions in the face of cyberattacks and continuously enhance their cyber resilience,” the regulators said. The proposal also demands “secure, immutable, off-line storage of critical records.”
Digital breaches have cost the financial industry billions and prompted banks to hire armies of cyberdefenders in recent years. So, the Fed, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. devised a plan that sets the minimum each lender must do to show it’s protecting itself. The banks’ most critical systems that the wider financial system depend on would have to be able to recover from attacks within two hours.
In what could be a windfall for outside companies that provide cyber protection, those systems also would have to be shielded by “the most effective, commercially available controls,” but agency officials gave no details on how that would be defined.
The outside vendors are also getting more scrutiny. Consumer Financial Protection Bureau Director Richard Cordray, a member of the FDIC board, flagged the “utter dependence” of banks on their technology and outside service providers. Risks may develop in those firms, he said, meaning bank customers could have less control over emerging problems.
The agencies approved an advance notice of proposed rule-making, a preliminary step that means a final measure could still be many months in the making.
The banking industry has been stunned by recent computer muggings, including a February hack of Bangladesh’s central bank in which thieves made off with $81 million and the 2014 incursion of JPMorgan Chase that compromised information on millions of customers.
In recent years, regulators’ public responses to hacks have mostly consisted of issuing guidance and industry alerts. The escalating attacks have put pressure on them to do more, and a formal rule could give the government more power to crack down on lenders it thinks aren’t doing enough. New rules would update information-security standards that were issued before modern threats emerged.
In JPMorgan’s 2015 annual report, Chief Operating Officer Matt Zames said thousands of employees were working from three global security-operations centers to protect the bank. He said that every month they find more than 200 million malicious emails.
Cybersecurity breaches — including the routine hacking of emails of government, political and corporate officials — have been a factor in this year’s presidential election. Democratic officials have accused Russia of hacking emails and then providing WikiLeaks with sensitive documents aimed at undermining Hillary Clinton’s bid for the White House.
Clinton has said cyberwarfare is one of the biggest threats the next administration must deal with, especially those attacks supported by countries including Russia. While Republican candidate Donald Trump has cast some doubt on whether foreign nations may be involved in attacks, he said during a debate last month that “we are not doing the job we should be doing” and “we have to get very, very tough on cyber.”