A strategic prioritization approach to airline scheduling during disruptions

Air disruption scenarios due to inclement weather or air traffic congestion can result in significant imbalances in the demands and capacities of the affected airports. The Federal Aviation Administration (FAA) resolves these imbalances by implementing the Ground Delay Programs (GDP). In a GDP, the FAA first assigns new arrival slots to the airlines using the Ration By Schedule (RBS) approach, which is an allocation procedure that assigns slots to incoming flights based on a First-Scheduled, First-Served (FSFS) criterion. The FAA uses these new arrival slots to determine the expected delays and accommodates them as ground delays at departure airports. The notion of FSFS that forms the basis of RBS, is considered to be an industry standard of fairness. One of the major shortcomings of the RBS approach is that it does not distinguish flights based on factors like aircraft size, number of passengers, future aircraft schedules, etc. This results in an inefficient utilization of the airport capacities. To address this concern, Fearing and Kash proposed a two-stage, non-monetary strategic prioritization game in which airlines could participate and bid for priorities at different airports by taking into account their internal costs. This approach has several advantages over different market-based mechanisms like slot auctions, congestion pricing and slot exchanges. In this thesis, therefore, we develop their approach further both mathematically as well as empirically. Specifically, we prove that a pure strategy Nash equilibrium exists in the second stage of the game for the general multiple airlines and multiple airports case. In addition, by imposing the diagonal strict concavity conditions on the airlines' payoffs, we show that this pure strategy Nash equilibrium is unique for the two-airlines case. Our experimental simulations on historical data further show that this approach can achieve significant congestion cost benefits in comparison to the current RBS procedure.