Flight Delays in Germany: a Model for Evaluation of Future Cost Risk

Abstract

Air traffic has been increasing in Germany over the last decades reaching in 2018 an all-time high with more than 3 million flights. This increase has led to a rise in delays, which generate different costs to airlines, passengers, and Air Navigation Service Providers. This paper focuses on understanding and predicting these costs. For this purpose, a stochastic modelling method is proposed to estimate future air traffic, delays and the cost of future delays. The model allows to better understand what the full distribution of the delay costs may look like. To that end, the paper analyses 1,826 daily items (from 1/1/2014 to 12/31/2018) with information of air traffic and delays for German airspace. Findings suggest that overall mean delay costs for 2019 may be up to 280 million €, while in the 5% worst cases this value could go up to an average of 319 million €.