Event Details

Professor Arne Strauss will present a seminar to the Management Science Department

Abstract: In European air traffic management (ATM), determining the right capacity for each airspace is crucial and is decided months ahead of the departure day. Incorrect decisions due to unpredictable demand and capacity factors, like weather, can lead to significant costs because of flight re-routings or delays. A new cross-border capacity provision scheme is suggested, allowing for a portion of capacities to be flexibly used across any airspace within an alliance, albeit at a higher unit cost. This flexibility helps safeguard against the risks of underprovisioning. The challenge is to find the perfect budget balance for both local and cross-border capacities to minimize network costs.

The solution involves a two-phase newsvendor problem. First, one decides the capacities for each airspace. Then, once demand and disruptions are known, decisions are made on flight routings, delays, and airspace sector schemes to minimize costs. The proposed framework balances exploration and exploitation to find the most cost-effective capacity levels, using a heuristic for the complex routing and sector opening issue.

A simulation study was conducted, using data from approximately 2,800 flights in Western European airspace. The results reveal that this approach considerably cuts down network costs compared to a deterministic method. When capacity is shared among neighbouring airspaces, there's a 1.6%-2% reduction in total cost. However, it's essential to ensure each airspace has at least as much capacity with cross-border provision to prevent replacing costlier air traffic controllers with lower-paid counterparts. Lastly, a centralized pool of air traffic controllers for the entire network doesn't provide additional benefits as the elevated capacity costs nullify the savings from reduced delays and re-routings.

This paper has recently been published in Transportation Science.

Bio: Arne is Professor for Demand Management & Sustainable Transport at WHU – Otto Beisheim School of Management. Previously, he held positions as Associate Professor of Operational Research in the Operations Group at Warwick Business School and as Turing Fellow at The Alan Turing Institute in London. He received his PhD in Management Science from Lancaster University. His research focusses on improving transportation systems, often through optimisation of demand management decisions.

He is a member of the Strategic Advisory Team (Mathematical Sciences) of the British Engineering and Physical Sciences Research Council and of the Research Panel of The Operational Research Society. He serves as referee for various international journals such as European Journal of Operational Research, Transportation Science, Transportation Research Part B, Production & Operations Management and Operations Research.