OM in the News: American Airlines Returns to “Peak” Scheduling
“American Airlines is making its Miami hub more hectic—on purpose,” writes The Wall Street Journal (Sept. 11, 2014). Instead of spacing flights evenly throughout the day, the airline just started bunching them together. The change restores an old format of “peak” scheduling, grouping flights into busy flying times followed by lulls when gates are nearly empty. American next year will “re-peak” schedules at its largest hubs in Chicago and Dallas-Fort Worth.
Airlines shunned peak schedules at hubs more than a decade ago because they meant higher costs such as more people and equipment, created too many delays and forced passengers to sprint through terminals to make connecting flights. Recently though, the industry has gravitated back to peaks and valleys as a way to fill seats and generate more revenue. “An additional person per flight will make a difference,” said American’s CEO. The company will gain $200 million more a year from re-peaking its schedules at hubs.
But travelers may have even less time to make flight connections or to eat. And airlines, airports and federal agencies are re-evaluating how they manage baggage, cleaning crews and security checkpoints with the new highs and lows in foot traffic. Peak scheduling packs planes better because it creates more possible itineraries, with shorter connection times. In Miami, 42 flights depart between 9 and 10 a.m. Then between 10 and 11 a.m., only a handful are scheduled to take off. The process repeats during the day with 10 “banks” of flights that fill about 45 gates at a time.
There are added costs to re-peaking. American hired 67 more gate agents and 150 baggage handlers and other ground workers. It had to purchase more belt-loaders, dollies and tugs that push planes out from gates. There are other pitfalls to airlines’ clumped schedules. If bad weather hits at the wrong time, diverted flights and missed connections can cause widespread delays.
Classroom discussion questions:
1. What are the advantages and disadvantages of this approach?
2. What other OM ideas could American use to increase efficiency?