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Airport Capacity Extension, Fleet Investment, and Optimal Aircraft Scheduling in a Multi-Level Market Model : Quantifying the Cost of Imperfect Markets

Title data

Coniglio, Stefano ; Sirvent, Mathias ; Weibelzahl, Martin:
Airport Capacity Extension, Fleet Investment, and Optimal Aircraft Scheduling in a Multi-Level Market Model : Quantifying the Cost of Imperfect Markets.
In: OR Spectrum. (2021) .
ISSN 1436-6304

Project information

Project title:
Project's official titleProject's id
Projektgruppe WI Energie und kritische InfrastrukturenNo information

Abstract in another language

We present a market model of a liberalized aviation market with independent decision makers. The model consists of a hierarchical, trilevel optimization problem where perfectly-competitive budget-constrained airports decide (in the first level) on optimal runway capacity extensions and airport charges by anticipating long-term fleet investment and medium-term aircraft scheduling decisions taken by a set of imperfectly-competitive airlines (in the second level). Both airports and airlines anticipate the short-term outcome of a perfectly-competitive ticket market (in the third level). We compare our trilevel model to an integrated single-level (benchmark) model in which investments, scheduling, and market-clearing decisions are simultaneously taken by a welfare-maximizing social planner. Using a simple six-airports example from the literature, we illustrate the inefficiency of long-run investments in both runway capacity and aircraft fleet which may be observed in aviation markets with imperfectly-competitive airlines.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: OR in Airlines; Mixed-Integer Optimization; Multilevel Optimization; Market Design; Long-Run Investments
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Research Institutions
Research Institutions > Research Centres > Forschungszentrum für Modellbildung und Simulation (MODUS)
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Result of work at the UBT: Yes
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 11 Mar 2021 10:29
Last Modified: 11 Mar 2021 10:29
URI: https://eref.uni-bayreuth.de/id/eprint/63846