Air traffic network equilibrium: Toward frequency, price and slot priority analysis

Abstract

This paper presents a model which is aimed at developing an efficient air traffic system for given demand and airport capacity levels by the proper pricing of landing slots. A computable Nash equilibrium model is used in the context of a two-stage, game-theoretic representation of a market mechanism for slot allocation. A variational inequality formulation is then used to solve this oligopolistic air transport market model. The choice of travellers among competing airlines is represented by a logit model. Two models are proposed for pricing of landing slots: one with an exogenously determined allocation, and the second with an endogenous allocation. Each model derives the flight patterns, ticket prices, routes, and carrier choice for passengers, and landing fees. A small example is included to illustrate the properties of the models.