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How do changes in time zones affect the airline industry?

Mar 22, 2016 11:00:00 AM
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How do changes in time zones affect the airline industry?

Unexpected time zone changes are common around the world. Authorities, when deciding on changing a time zone, don't seem to understand the holistic and negative impacts they cause. They disrupt our agendas at work, generating confusion and lost productivity for weeks and sometimes for months. Computer operating systems, smartphones, productivity software, etc, loose synchronization. Time zone changes also represent a challenge in the management of risk. In the airline indusrty, time zone changes have logistical, financial and commercial consequences, affecting airport operations, flight itineraries, distribution and, of course, passenger service and airlines' costs.

In March 2016, the Chilean government announced that they would reinstate daylight savings time (from UTC -3 to UTC -4) between May 14 and August 13, 2016. The winter savings time had been eliminated in Chile in 2015, with the corresponding disruptions at the time, but a year later everybody seemed to have adjusted already... According to Chilean airlines, this will cause important problems.

After a long period of deliberation, LATAM Airlines released a statement claiming that the change would affect over 550,000 people and 5,000 international flights. Its sales director affirmed that the company “wasn’t previously notified, and this should be done with a year notice to prevent problems with passengers”. In summary,  their flights will have to depart an hour earlier from Chilean airports.

At the same time, Sky Airline called its passengers to check their times and dates. Domestic flights would have no further changes, but international routes will have a series of changes. As soon as they heard the announcement the company began rescheduling flights to avoid inconveniences from passengers, such as connection disruptions, and began calling all of them to report the new departure times.

General Consequences for air travel 

In 2005, the United States Congress planned to extend the daylight-saving time for four weeks to save energy and prompted an outcry from the airline industry.  At the time, the Air Transport Association argued that it would throw U.S. international schedules further out of sync with Europe. It said a two-month extension, the initial proposal, would cost the U.S. airline industry U$147 million and disrupt overseas travel.

Let's imagine a nonstop flight New York (JFK)- London (Heathrow) at the time when DST was extended.  Normally, transatlantic flights from Eastern United States  to Europe tend to depart from 17.00 onwards, as passengers want to arrive no sooner than 06.00. The airline faced two choices:

  1. Re-schedule the flight to an hour earlier to arrive on time in London, avoiding inconveniences at Heahtrow airport -after all, all flights from New York are having the same problem. This choice would require contacting all affected passengers in the US to inform them about the new schedule time. This has some big inconveniences, like low contactability rate of foreign passengers returning to their origin, lack of necessary direct contact information of passengers sold through travel agencies, passengers that do not agree with the schedule change and request a different flight and a compensation, etc. Passengers that could not be contacted by the airline arrive at the airport too late and miss the flight; again, the airline would have to compensate and reschedule them
  2. Depart on the scheduled UTC time. This would mean that the flight would now arrive an hour earlier in London, causing a series of issues with connecting gates, docks, maintenance units and curfew times.

In March 2016, Azerbaijan canceled daylight savings times. This prompted local airline AZAL’s  international flight schedule to depart and arrive an hour before the time specified in their purchased airline tickets.  Furthermore, they appealed to "passengers who have purchased tickets for dates from March 26th, with a request to arrive for check-in at the airport 3 hours before departure time specified on the ticket."

Regulation calls for airlines to respect scheduled departure time and keep their commitments to customers, even though arrival times can change. If the airlines are forced to reschedule, they need to notify passengers and provide compensation for eventual delays or lost of connecting flights.

A time zone change is a grey area in airline regulation

Depending on the case,  airlines would have to compensate the passenger, book new flights and provide accommodations for the night, should they be needed. Then, the operator would have to find last minute seats at the earliest flight available, and compensate for fare changes. In the best cases, they can schedule a new flight at the last minute, incorporating all fare costs, airport fees, penalties and taxes for a last minute input into the system, for the passenger to keep the rate of an economy class ticket booked with months in advance.

Multiply this by the number of passengers affected and the airlines and airports are in a predicament. In summary, consequences are multifold and cumulative:  

  • Financial: passenger compensations; displacement costs of late passenger rebookings; payment of overtimes and penalties to airport maintenance; etc
  • Logistical: rebooking the right gates; advising passengers on time; recalculating time windows; etc
  • Commercial: negative customer perception (don't expect them to blame the government!); passengers' choices depend pretty much on the airline's capacity to react and promptly address their delay, large airlines having more options than smaller ones; instability of well established schedules damages service to business segments; etc

Stephen Holloway, author of Straight and Level: Practical Airline Economics, states that time zones constrain the deployment of capacity, and their impact on the commercial viability of arrival and departure times, curfews and noise quotas and the availability of take-off and landing slots, gate space and counters at congested airports, etc. Holloway also says that “seasonal time changes to and from daylight saving can also pose a challenge whenever they require a choice between maintaining year-round consistency of timings either at the point of departure or, alternatively, at the destination. The challenge is exacerbated where convenience relative to connecting series at one or both ends of the route is important to the maintenance of flow traffic”.

 

Conclusions

Time zone changes, especially when they are unexpected, are a big and costly headache for airline customers, for the airline business and for society in general. Authorities should take into account the holistic impacts they produce. The analysis, adjustments and actions required by airlines to deal with time zone contingencies are diverse, highly complex and costly. The help of powerful business intelligence tools, real time visibility and connectivity are critical in dealing with these kinds of contingencies.

Have you faced any concerning issues or contingencies with time zone changes? I'd appreciate your comments.

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