2002 Workshop on National Airspace System Resource Allocation: Economics and Equity

The 2002 Workshop on National Airspace System Resource Allocation: Economics and Equity was held March 19–20, 2002 at the Aspen Institute’s Wye Woods Conference Center in Queenstown, Md.

It has become increasingly apparent that demand for National Airspace System (NAS) resources has become very close to NAS capacity. Although measures are constantly being taken to increase capacity and, in spite of the recent demand decrease resulting from the events of September 11, it seems clear that demand and capacity will continue to remain very close into the foreseeable future. Consequently, it is imperative that a well-thought-out strategy and sound analytic principles be applied to NAS resource allocation.

Probably the most obvious resource is a fixed departure or arrival time slot at an airport. Each flight scheduled in the Official Airline Guide (OAG) requires two such slots. Most of these slots today are not formally allocated. Yet, increasingly it is clear that these slots represent a valuable limited resource that should be rationed in an intelligent manner. In the well-publicized case of LaGuardia Airport a lottery was used to carry out the allocation. Departure slots, on a given day, are subject to very different resource allocation mechanisms when a Ground Delay Program (GDP) is imposed on an airport. In such situations, the airport acceptance rate and, thus, the number of arrival slots are reduced so that special short term rationing techniques must be imposed. The newly developed Collaborative Decision Making (CDM) mechanisms, ration-by-schedule and compression, are now used to achieve this shorter term rationing. Resource rationing is carried out in many other contexts usually using informal criteria. For example, traffic flow management units very often must make decisions on which groups of flights get delayed, which get rerouted, etc. These decisions are typically made based on local, informal criteria.

As the NAS becomes more constrained and airspace congestion increases, more attention is being paid to how resources are allocated. The issue of insuring equity among NAS users has been recognized as vital. The possibility of using market mechanisms, e.g. slot auctions, to allocate resources is being discussed. It seems that there is a critical need to carefully study these issues and bring to bear knowledge obtained in other resource allocation contexts.

Organizers: Michael Ball, University of Maryland; George Donohue, George Mason University; Karla Hoffman, George Mason University

Sponsored by: George Mason University Foundation (with funding from the Logistics Management Institute and Metron Aviation); NEXTOR, the National Center of Excellence for Aviation Operations Research (with funding from the Federal Aviation Administration); and the University of Maryland.

Welcome Michael Ball, University of Maryland; George Donohue, George Mason University
NAS System Constraints and Evolving Capabilities
Capacity Limitations, Technical Constraints and Trends George Donohue, George Mason University
Lessons from Airport Gridlock: LaGuardia Airport Amedeo Odoni, MIT
An Economic Perspective on Collaborative Decision Making Mike Wambsganss, Metron Aviation
Discussant Louise Mallett, FAA
Economic Consequences of Congestion
Economic Costs of Delay Joseph Sinnott, MITRE
Airline Response to NAS Capacity Constraints Pete Kostiuk, Logistics Management Institute
Introducing Financial Compensation to the Benefit of Airlines Companies for Lack of Capacity Provision: First Insights Alain Jeunemaitre, Nuffield College, Oxford University
Discussants Arnie Barnett, MIT; Geoff Gosling, University of California, Berkeley; David Traynham, Boeing
Perspectives on Airport Slot Allocation
Markets and Information Vernon Smith, George Mason University
Property Rights and Allocation Mechanisms David Porter, George Mason University
Panel Larry Ausubel, University of Maryland; Ken Button, George Mason University; Nan Shellanbarger, FAA; Richard Steinberg, Cambridge University; Rich Vohra, Northwestern University
NAS Congestion: Carrier and Airport Impact and Response
Panel Robert Bott, Boeing; Jim Crites, Dallas Fort Worth Airport; Amr Elsawy, MITRE; Mark Hansen, University of California, Berkeley; Bob Windle, University of Maryland
Public Auctions: Background and Perspective from Other Industries
The FCC Auctions and Related Designs: An Economist’s View Paul Milgrom, Stanford University
Energy Auctions: a Federal View Richard P. O’Neill, Federal Energy Regulatory Commission
National Airspace System Resource Allocation: Market Design Issues Peter Cramton, University of Maryland
Panel Karla Hoffman, George Mason University; Evan Kwerel, Federal Communications Commission; Sasa Pekec, Duke University
Airspace System Resource Allocation: Operations Impact
NAS Resource Allocation and Reallocation on Day of Operations Michael Ball, University of Maryland
Equity: Uncertainty and Buying a Seat at the Poker Table Roger Beatty, American Airlines
Airspace Resource Allocation: Operations Impact John Hansman, MIT
Panel Norm Fujisaki, FAA; Patrick Ky, Eurocontrol; Bill Leber, Northwest Airlines
Closing Remarks  George Donohue, George Mason University