Originally Posted by
FlyerWx
There's no law, but keep in mind unnecessarily padding flight schedules actually costs the airline money. The airline typically also schedules airport operations such as gate utilization and ground crew work times based on scheduled time.
Yes, airlines are strongly incented
not to pad. Padding costs airlines a lot of money. More crew time, less aircraft utilization, and less predictable ops if "over" padded. But there is nothing stopping an airline from "having" a 95-99%+ on time percentage if they so chose (of course, their flights would be blocked so noncompetitively long that you would actually end up wasting more time on average if you have connections and not less).
That said, legacies are inherently going to target higher on-time rates than low cost point-to-point carriers (all other factors being equal - which oftentimes they are not because e.g., LCC are more likely to fly into less congested secondary airports) because they face higher secondary/indirect costs from delays (missed connections driving rebooking and potential hotel/meal vouchers depending on cause). So the marginal analysis where it makes "sense" to target an on-time rate varies depending on airlines, relative costs, c-sat objectives, and network structure.