DEVI Seminar – Nicole Adler


10h30 - 11h30


ENAC, Building Breguet, Amphi Breguet
7 avenue Edouard Belin, Toulouse, 31055

Event Type

Introducing Competition in European Air Traffic Control Provision using Game Theoretic Principles

The overall goal of the research is to investigate how to
introduce competitive incentives in the air traffic management sector so
as to best contribute to the European high-level policy objectives for
aviation. We develop a two-stage, network congestion game in which
multiple air navigation service providers bid to serve Member State
airspace. The individual Member States set up an auction in which they
specify minimum service levels and the rules of the auction, such as the
right to increase charges as a function of air service levels. Airlines
subsequently choose their optimal flight paths such that they minimize
their operating costs. We test the likely equilibria outcome if the
companies are for-profit or non-profit air navigation service providers.
The results suggest that introducing competition for the market via
outsourcing service provision may reduce charges by up to half the current
levels. It would also appear that auctioning the service is likely to
defragment the European air traffic control system as companies win more
than one auction in neighboring countries. Finally, it would appear that
for-profit companies are highly likely to invest in new technologies thus
encouraging technology adoption faster than appears to be occurring today.