New report finds flight disruption costs travel industry $60bn annually
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New report finds flight disruption costs travel industry $60bn annually

20 Oct 2016

A new report from Spanish travel technology provider Amadeus and global airline information technology (IT) consultancy T2RL has shown that flight disruption costs the travel industry $60bn annually.

A new report from Spanish travel technology provider Amadeus and global airline information technology (IT) consultancy T2RL has shown that flight disruption costs the travel industry $60bn annually.

The amount equates to around 8% of global industry revenues per year.

Entitled ‘Shaping the Future of Airline Disruption Management’, the report found that factors such as bad weather, natural disasters, strike action, and planes and crews arriving late contribute to delayed and cancelled flights.

T2RL principal consultant Ira Gershkoff said: “There is every reason to believe the historic challenge of re-routing planes, crew and passengers during disruption will finally be addressed over the next several years.

“After a period of limited investment, the will has once again returned across airline boardrooms, driven in large part by the need to deliver reliably on ancillary product sales.

"What’s important is that service providers across the entire industry are collaborating to mitigate the impact on the traveller."

“What’s important is that service providers across the entire industry are collaborating to mitigate the impact on the traveller.”

The report added that industry regulations, such as the tarmac delay rule in the US and mandatory compensation for delays across the European Union (EU), help airlines to create standard procedures for handling disruption.

It has also urged operation managers, airports and airlines to develop an integrated approach in order to address flight disruption issues.

Additionally, the growing motivation of air-line boardrooms to invest in addressing disruption management could mitigate problems in the future.

For the report, T2RL interviewed several organisations across the travel industry, including American Express, Gatwick Airport, the International Air Transport Association (IATA), Southwest Airlines, Star Alliance, Swiss International Airlines and the Yas Viceroy Hotel.


Image: Bad weather, natural disasters and strike action cost the travel industry up to an estimated $60bn annually. Photo: courtesy of Amadeus IT Group.