AVIATION INFRASTRUCTURE PERFORMANCE AND AIRLINE COST: A STATISTICAL COST ESTIMATION APPROACH

The relationship between the performance of the U.S. National Airspace System (NAS) and airline costs is examined by estimating airline cost functions which include NAS performance metrics as arguments, using quarterly data for 10 U.S. airlines. Performance metrics that vary by airline and quarter are developed by applying factor analysis to seven underlying variables, including average delay, delay variance, and the proportion of flights which are cancelled.