The manner in which changes in the performance of the U.S. National Airspace System (NAS) affect carrier costs is examined. The methodology includes estimation of airline cost functions that contain NAS performance metrics as arguments, using quarterly data for 10 U.S. domestic airlines. The primary interest is in the impact of delay on cost performance, and performance metrics that vary by airline and quarter are developed. The potentially large number of metrics are reduced by applying factor analysis to seven underlying variables, including average delay, delay variance, and the proportion...