The economic value of additional airport departure capacity

TL;DR

This paper develops a data-driven model to evaluate the economic benefits of increasing airport departure capacity, considering delay costs, revenue impacts, and passenger behavior, revealing optimal capacity points and trade-offs.

Contribution

It introduces a novel, detailed model linking airport capacity, delay costs, and revenues, accounting for passenger behavior and delay distribution, to identify optimal capacity levels.

Findings

Optimal airport capacity maximizes operating profit.

Higher predictability improves profit but may reduce punctuality.

Complex passenger behavior models can lead to multiple local optima.

Abstract

This article presents a model for the economic value of extra capacity at an airport. The model is based on a series of functional relationships linking the benefits of extra capacity and the associated costs. It takes into account the cost of delay for airlines and its indirect consequences on the airport, through the loss or gain of aeronautical and non-aeronautical revenues. The model is highly data-driven and to this end a number of data sources have been used. In particular, special care has been used to take into account the full distribution of delay at the airports rather than its average only. The results with the simple version of the model show the existence of a unique maximum for the operating profit of the airport in terms of capacity. The position of this maximum is clearly dependent on the airport and also has an interesting behaviour with the average number of passenger per aircraft at the airport and the predictability of the flight departure times. In addition, we also show that there exists an important trade-off between an increased predictability and the punctuality at the airport. Finally, it is shown that a more complex behavioural model for passengers can introduce several local maxima in the airport profit and thus drive the airport towards suboptimal decisions.