THE INFLUENCE of FLIGHT DELAYS on BUSINESS TRAVELLERS by COLETTE VICTOR Student Number

THE INFLUENCE OF FLIGHT DELAYS ON BUSINESS TRAVELLERS by COLETTE VICTOR Student Number: 21048691 Submitted in partial fulfilment of the requirements for the degree MAGISTER COMMERCII in Tourism Management in the FACULTY OF ECONOMIC AND MANAGEMENT SCIENCES at the UNIVERSITY OF PRETORIA SUPERVISOR: PROF. B.A. LUBBE 2010-03-17 © University of Pretoria DECLARATION I declare that the Master’s script, which I hereby submit for the degree MCom Tourism Management at the University of Pretoria, is my own work and has not previously been submitted by me for a degree at another university. i ACKNOWLEDGEMENTS I wish to extend my sincere gratitude to the following people and institutions for their contribution to this research script: I would first like to express my greatest gratitude to my advisor, Professor Berendien Lubbe, for her constant mentorship, guidance and encouragement during my three years MCom in Tourism Management at the University of Pretoria. Thank you for your time and willingness to work with me, for your patience and understanding during the hard times and most importantly for your friendship. Many thanks to Ms Jaqui Sommerville and Ms Loina bodenstein, statisticians at the University of Pretoria who helped in the statistical analysis of the data. Thank you for your dedication, sacrifices and advice concerning the methodology used in the empirical research. I would like to thanks Philips SA (Pty) Ltd for providing the six months of travel data without which this research would not have been possible. Thank you for your assistance in compiling and providing the data, as well as your patience in answering my many questions. I am deeply indebted to Stuart Ratcliffe and Vincent Lessing from ATNS for providing the necessary flight data to enable the accurate identification and testing of flight delays. Thank you for your patience and advice in helping me gather the information and find solutions for the various obstacles I encountered. I truly thank Rudie du Preez for his expertise and dedication in scripting the IT programme to accurately match the flights from the two data sets provided by ATNS and Philips. Thank you for the many nights and weekends spent working together. I would like to thank Cecily for reading this thesis and for her valuable suggestions and advice. Thank you for everything, your input was invaluable. Finally, I would like to thank my family for their constant love, support and encouragement. Without you I wouldn’t be where I am today. Thank you. ii FINANCIAL ASSISTANCE Financial assistance provided by the National Research Foundation (NRF) in respect of the costs of this study is hereby acknowledged. Opinions or conclusions that have been expressed in this study are those of the writer and must not be seen to represent the views, opinions or conclusions of the NRF. iii ABSTRACT The main aim of the study was to assess the influence of flight delays on business travellers. Studies on flight delays have been done from a number of perspectives; these include the reasons for flights delays, the costs to airlines and airports, the effect on airline scheduling and the impact on airline market share. An area that has received little, if any, attention is the impact of flight delays on business travellers, one of the most lucrative markets for airlines. This study empirically researches the direct cost of flight delays to travellers of a specific corporation. In addition, the use of mobile technology in communicating the occurrence of flight delays to business travellers, and how this could alleviate traveller frustrations, are discussed from a theoretical perspective. The study followed a quantitative methodology to determine man-hours lost and the direct costs of flight delays to travellers from a selected corporation. Two data sets were used, one provided by the corporation on flights undertaken by their corporate travellers over a predetermined period, the other by the Air Traffic and Navigation Services (ATNS) on all flights over the same period. The two sets of data were matched and analysed to determine which flights undertaken by the corporate travellers were delayed, based on actual arrival times, and if any significant relationships could be determined between flight delays and types of traveller (frequent versus infrequent) or specific time periods (time of day, day, week and month). The results indicated that frequent travellers experienced the majority of flight delays, and consequently represented the greatest cost to the corporation. The study also found significant relationships between substantial delays and the month of the year, day of the week, and the time of day flown. The identification of patterns could provide business travellers with the information to better manage their travel arrangements and optimise their travel times and costs. In calculating the direct monetary cost, the value of time lost was found not to constitute a substantial amount to the corporation, but this result must be viewed against the limitations of the study. iv This study serves to provide a foundation for future research into the cost of flight delays to business travellers. Future research should include larger samples (large global or multiple companies could be used) and extend the time periods for assessing delays. Future studies could also include other direct and indirect costs not covered here and the study could be replicated in different geographical areas, particularly areas with a high density of flights such as Asia, the United States of America and Europe. v TABLE OF CONTENTS 1. CHAPTER 1: THE PROBLEM STATEMENT AND RESEARCH OBJECTIVES 1 1.1. INTRODUCTION 1 1.2. PROBLEM STATEMENT 5 1.3. RESEARCH OBJECTIVES 7 1.4. HYPOTHESES 9 1.5. METHODOLOGY 10 1.6. IMPORTANCE AND BENEFITS OF THE STUDY 12 1.7. STRUCTURE OF THE STUDY 13 1.8. SUMMARY 14 2. CHAPTER 2: AN OVERVIEW OF THE AIR TRANSPORT INDUSTRY 15 2.1. INTRODUCTION 15 2.2. THE AIR TRANSPORT SYSTEM 15 2.3. THE ROLE OF AIRPORT OPERATIONS IN THE AIR TRANSPORT SYSTEM 22 2.4. AN OVERVIEW OF AIR TRANSPORT OPERATIONS IN SOUTH AFRICA 32 2.4.1. Airports Company of South Africa (ACSA) 33 2.4.2. Air Traffic and Navigation Services (ATNS) 35 2.4.3. South African Government 39 2.4.4. South African Weather Service 43 2.4.5. An Overview of Airline Operations in South Africa 45 2.5 CONCLUSION 49 3. CHAPTER 3: THE FLIGHT DELAY CHAIN 50 3.1. INTRODUCTION 50 3.2. THE FLIGHT DELAY CHAIN 50 3.3. WHAT CONSTITUTES A FLIGHT DELAY 52 3.4. THE REASONS FOR FLIGHT DELAYS 55 3.4.1. The Demand for Air Transport 57 3.4.2. Government Bureaucracy 61 3.4.3. Infrastructure Improvements 64 3.4.4. Airline Scheduling 67 3.4.5. Airport Inefficiency 69 3.4.6. Air Traffic Control 71 vi 3.4.7. Mechanical Problems 72 3.4.8. Environmental Impacts 73 3.4.9. New Smaller Jets in the System 75 3.4.10The Influence of Weather as a Flight Delay Factor 76 3.5 POSSIBLE SOLUTIONS FOR REDUCING THE IMPACT OF FLIGHT DELAYS 60 3.6 CONCLUSION 84 4. CHAPTER 4: THE CHARACTERISTICS AND TRAVEL PATTERNS OF BUSINESS AND CORPORATE TRAVELLERS IN SOUTH AFRICA 85 4.1 INTRODUCTION 85 4.2 THE SOUTH AFRICAN BUSINESS TRAVEL MARKET 85 4.2.1 The Size of the Business Travel Market 85 4.2.2 Corporate Travel Expenditure 87 4.3 THE INFLUENCE OF FLIGHT DELAYS ON BUSINESS AND CORPORATE TRAVELLERS 89 4.3.1 The Influence of Flight Delays on Corporate Travellers’ Costs and En-Route Productivity 91 4.3.2 The Influence of Flight Delays on Business Travellers’ Contract Negotiations with Airline Companies 95 4.4 THE USE OF MOBILE TECHNOLOGY IN COMMUNICATING WITH AIRLINE PASSENGERS 97 4.4.1 The Characteristics of Mobile Technology 97 4.4.2 Communicating Service Disruptions through Mobile Technology 101 4.4.3 The Future Use of Mobile Technology in the Airline Industry 103 4.5 CONCLUSION 105 5. CHAPTER 5: METHODOLOGY 106 5.1 INTRODUCTION 106 5.2 METHODOLOGY 108 5.3 RESEARCH DESIGN 108 5.4 POPULATION AND DATA 109 5.4.1 Editing the Data 111 5.4.2 Data Analysis 113 5.5 LIMITATIONS OF THE STUDY 115 5.6 ETHICAL CONSIDERATIONS 117 vii 5.7 CONCLUSION 117 6. CHAPTER 6: DISCUSSION OF THE CASE STUDY RESULTS 119 6.1 INTRODUCTION 119 6.2 FREQUENCY ANALYSIS OF FLIGHT DELAYS AND TIME LOST 119 6.2.1 Early, On-time and Late Arrivals 119 6.2.2 The Total Number of Flight Delays and Time Lost 120 6.2.3 Flight Delay Statistics per Airline 122 6.2.4 Flight Delays per Route Flown 126 6.2.5 Flight Delays per Month of the Year 128 6.2.6 Flight Delays per Day of the Week 129 6.2.7 Flight Delays per Time of Day 132 6.3 FREQUENT FLYERS 134 6.4 AN ANALYSIS OF THE COST OF FLIGHT DELAYS 136 6.5 HYPOTHESIS TESTING 138 6.5.1 Hypothesis 1 139 6.5.2 Hypothesis 2 139 6.5.3 Hypothesis 3 141 6.5.4 Hypothesis 4 143 6.5.5 Hypothesis 5 145 6.5.6 Hypothesis 6 146 6.6 CONCLUSION 148 7. CHAPTER 7: CONCLUSION AND RECOMMENDATIONS 149 7.1 INTRODUCTION 149 7.2 LIMITATIONS OF THE RESEARCH 152 7.3 INTERPRETATION OF THE RESULTS 153 7.4 AREAS FOR FUTURE RESEARCH 159 7.5 CONCLUSION 161 8. CHAPTER 8: REFERENCES 162 viii LIST OF FIGURES Figure 2.1 The Air Transport System 16 Figure 2.2 The Air Transport Environment System 18 Figure 2.3 The Airport System 24 Figure 2.4 Annual Passenger Growth: Constrained vs.

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