A Multi-stakeholder Evaluation of Strategic Slot Allocation Schemes under Airline Frequency Competition

In addition to the increasing passenger demand, airline frequency competition is another reason for the growing demand for airport resources. By providing more flight frequency, an airline attracts more passengers. As a result, demand for flight operations often exceeds capacity at congested airports, resulting in delays and disruptions. At some congested airports, the limited airport capacity is allocated between different airlines using administrative slot controls. At a slot controlled airport, (a) the total number of allocated slots, and (b) the distribution of slots across different airlines, together determine the effectiveness of any slot control strategy. We propose a game-theoretic model of airline frequency competition under administrative slot controls. The model is based on the popular S-shaped relationship between market share and frequency share of an airline. The model is solved for a Nash equilibrium and the model predictions are validated against actual frequency data, with the results indicating a good fit. We describe two different schemes for distributing the available slots among different airlines. We evaluate the impact of varying the total number of allocated slots on the airlines and the passengers. The results from a case-study at the New York LaGuardia (LGA) airport suggest that a small reduction in the total number of allocated slots translates into a substantial reduction in flight and passenger delays, and a considerable improvement in airlines’ profits. Keywords-airline frequency competition; airline scheduling; airport slots; flight delays; administrative slot controls; S-curve; Nash equilibrium; game theory; slot reduction.