Cross-Border Capacity Planning in Air Traffic Management Under Uncertainty

34 Pages Posted: 18 Nov 2021 Last revised: 10 Jan 2023

See all articles by Jan-Rasmus Künnen

Jan-Rasmus Künnen

WHU Otto Beisheim School of Management

Nikola Ivanov

affiliation not provided to SSRN

Arne Strauss

WHU - Otto Beisheim School of Management

Radosav Jovanovic

affiliation not provided to SSRN

Frank Fichert

affiliation not provided to SSRN

Stefano Starita

affiliation not provided to SSRN

Date Written: September 1, 2021

Abstract

In European air traffic management (ATM), it is an important decision how much capacity to provide for each airspace, and it has to be made months in advance of the departure day. Given the uncertainty in demand that may materialize until then along with variability in capacity provision (e.g., due to weather), a wrong decision can create high cost on the network in terms of necessary displacements (re-routings or delays). We propose a new cross-border capacity provision scheme in which some proportion of overall capacities can be flexibly deployed in any of the airspaces of the same alliance (at an increased unit cost). This allows us to hedge against the risk of capacity underprovision. Given this scheme, we seek to determine the optimum budget for capacities provided both locally and in cross-border sharing that results in the lowest expected network cost (i.e., capacity and displacement cost).

To determine optimum capacity levels, we need to solve a two-stage newsvendor problem: We first decide on capacities to provide for each airspace, and after uncertain demand and capacity provision disruptions have materialized, we need to decide on the routings of flights (including delays) and the sector opening scheme of each airspace to minimize cost. We propose a framework that balances exploration with exploitation in searching the most cost-efficient capacity levels (in the first stage), and use a heuristic to solve the routing and sector opening problem (in the second stage), which is NP-hard.

We test our approach in a large-sized simulation study based on a real data covering around 2,800 flights across large parts of Western European airspace. We find that our approach significantly reduces network cost against a deterministic benchmark (using similar computational resources). Also, experiments on different setups for cross-border capacity sharing show that total cost can be reduced by 1.6%-2% if capacity is shared among neighboring airspaces - even though we require that each airspace has at least as much capacity under cross-border provision than without (this conservative assumption is to avoid substitution of expensive air traffic controllers with others from air navigation providers in countries with a lower wage level). In contrast, operating a central pool of air traffic controllers eligible to work across the network does not further improve performance since the higher capacity cost outweigh savings from delay and re-routings.

Keywords: air traffic management, capacity planning, simulation optimization

Suggested Citation

Künnen, Jan-Rasmus and Ivanov, Nikola and Strauss, Arne and Jovanovic, Radosav and Fichert, Frank and Starita, Stefano, Cross-Border Capacity Planning in Air Traffic Management Under Uncertainty (September 1, 2021). Available at SSRN: https://ssrn.com/abstract=3959818 or http://dx.doi.org/10.2139/ssrn.3959818

Jan-Rasmus Künnen (Contact Author)

WHU Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany
01753181202 (Phone)

Nikola Ivanov

affiliation not provided to SSRN

Arne Strauss

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Radosav Jovanovic

affiliation not provided to SSRN

Frank Fichert

affiliation not provided to SSRN

Stefano Starita

affiliation not provided to SSRN

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