Impact of cost approximation on the efficiency of collaborative regulation resolution mechanisms

Air Traffic Flow Management (ATFM) measures are often used to alleviate capacity demand imbalances. Usually, these measures impose a departure delay on flights crossing the airspace in question, where delay is assigned on a "First Planned First Served"(FPFS) base, which minimises total delay. Since delays typically have a different impact on individual flights in terms of cost, a procedure based on cost minimisation could reduce delay-related costs. User-Driven Prioritisation Process (UDPP) is developing a set of solutions aimed at allowing airlines to rearrange their flights within their own slots assigned by the FPFS rule. Inter-airline cost reducing approaches are still missing, but several works have been launched in this direction, using either central optimisations or market-based mechanisms. We analyse the impact of cost approximations procedures, integral part of certain inter-airline mechanisms, overall likely to be used by airlines or the Network Manager (that manages ATFM measures). Using cost models and simulations to collect the true cost of delay profiles, we show that the impact of cost approximations have been severely underestimated, leaving little room for new mechanisms to improve over UDPP. Moreover, we show that the errors made by the airlines on their own costs, expected at least for some airlines, further deteriorate the situation, including UDPP. However, we find that approximation procedures create a strong resilience to these errors, showing how both UDPP and inter-airline procedures may benefit from not having the airlines communicate their detailed costs. Thus, we find that any design of new mechanisms could include a cost approximation procedure in order to increase its resilience.