This is the last in a short series of blog posts that covers just a few of the business practices employed by the airlines. In the first two I discussed ticket pricing and oversold flights. In this one, we’re going to cover another headline-making topic. It happens every year with snow storms in the winter and thunderstorms (or worse) in the summer: Airline flights get cancelled by the hundreds. How do the decisions get made?

The process has changed a bit because of two relatively new rules. The first was the Airline Passenger Bill of Rights. This is the law that arose because of the JetBlue delayed-flight fiasco in 2007. Passengers were stuck on planes for more than 10 hours, and years of frustration finally bubbled over. The rule that was eventually passed assessed fines of as much as $27,500 per passenger for delays exceeding three hours for domestic flights and four hours for international flights. Many predicted that the new rule would lead to far greater numbers of flights being cancelled ahead of bad weather. Those predictions have been borne out.

The second rule that has changed the way airlines handle cancellations is FAR 117, the new airline pilot duty and rest limits that came out of the Colgan Air 3407 crash in Buffalo, New York. Pilots are much more limited in what they can legally do when delays begin to build up. Further, they are required to have more rest, and more importantly, more rest “behind the door”—that is, rest that is computed based on actually getting to the hotel. There is no more any resting during the van ride to the hotel. This has had huge implications on operational practices.

Taking into account these two rules, the airlines study a number of factors in determining which flights to cancel. Cost is always the bottom line.

“Cost” is measured several ways. High-revenue/high-value customers (or flights) are protected as much as possible, whether domestic or international. Airplane maintenance schedules play a much bigger role than most would imagine, whether it is schedule maintenance or getting the plane in place to fix a single item that needs repair (not every type of spare part is kept in every location). International flights also get a premium because of the expenses involved in accommodating so many people. Also, the rules for inconveniencing passengers vary by country, and in several, the rules are much more passenger-friendly than in the United States.

As you might imagine, having aircraft and crews out of position plays a major role the decision-making process. As weather changes and airlines are forced to deal with diversions, they are sometimes caught between the proverbial rock and a hard place because the weather frequently determines whether or not it is best to continue the flight to the original destination, or to move the airplane to another location to help recover the schedule.

A number of factors go into this kind of decision: airport curfews; crew legality; airplane legality (maintenance again); the availability of alternate transportation for passengers; the availability of hotel rooms; even the availability of fuel.

The overwhelming majority of these decisions are handled by sophisticated computer programs that automatically rebook passengers. However, sometimes the decisions are manually manipulated or controlled. Even when you work in such an environment, it’s easy to scratch your head and ask, “Why are they doing it this way?” Often, there is a big picture involved, and you have no idea how all of the pieces will fit together. You just find yourself hoping that your own inconveniences are minimized!—Chip Wright