Abstract
In the context of the SESAR (Single European Sky Air traffic management Research) Joint Undertaking, the role that the air navigation service provider (ANSP) could play has been reconsidered. ANSP manages traffic and deals with potential conflict situations and external events, which have led to the reorganization of the air traffic. The modification of traffic inevitably leads to delays for airlines, which is costly. In this study, we suggest that ANSP could provide a costly delay reduction service to airlines. Indeed, if ANSP has several solutions for traffic conflict resolution or reorganization, there is room for a choice between these solutions using additional criteria. Our study thus proposes an original model in which we determine the optimal design of a delay reduction contract signed between welfare- or profit-maximizing ANSPs and a monopoly airline. We give some comparative statics, in particular, the evaluation of the impact of a modification in safety standards on the contract.
Highlights
Aviation in Europe is expected to experience rapid growth and more delays in the future
In the context of SESAR, various propositions to reduce delays have been made, such as increasing the quality of air transport services. ese propositions are mainly technical; a delay reduction service has been considered. is service corresponds to an evolution in the role of the air navigation service provider (ANSP), which was initially established to be in charge of air traffic management
We propose to complete this analysis by allowing for the possibility of selecting particular solutions among those available, in which some airlines could choose the maximum amount by which they will be delayed. en, we model the ANSP as a strategic agent and propose to assess the performance of the ATM system while introducing the opportunity to propose a delay reduction service
Summary
Aviation in Europe is expected to experience rapid growth and more delays in the future. Incentives from the demand side (reputation and quality of service) and the supply side (network effect and cost of fuel) may explain why airlines value as little delay as possible We consider that this information is private and that the design of the optimal contract is an adverse selection problem, which results in the well-known trade-off between efficiency and rent extraction. We use numerical examples to study when a welfare-maximizing ANSP has to use public funds to provide the delay reduction service. En, we model the ANSP as a strategic agent and propose to assess the performance of the ATM system while introducing the opportunity to propose a delay reduction service.
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