Impact of the DOT delay rule on flight cancellations

An article in ( describes the impact of the new Department of Transportation rile that penalizes airlines up to $ 27,500 per passenger for ground delays of more than three hours.  The result was a drop in such delays from 693 in 2009-2010 to 20 in 2010-2011. The number of cancelled flights associated with tarmac delays changed from 336 to 387, which seems minor.  But, with the new penalties, the number of flights with a two hour delay dropped from 5328 to 3386. Thus the number of cancelled flights were 11.4 % of the delayed flights as against 6.3 % earlier. The upshot – aggressive cancellation of flights by airlines in advance of impending delays.  The question – is cancelling in advance a benefit to customers ? How should one evaluate the overall system wide benefit of the additional penalties levied by the DOT ?

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