Simulation optimization of air traffic delay cost

The cost of delay is a serious and increasing problem in the airline industry. Air travel is increasing, and already domestic airports incur thousands of hours of delay daily, costing the industry $2 billion a year. One strategy for reducing total delay costs is to hold planes for a short time at the gate in order to reduce costly airborne congestion. In a network of airports involving thousands of flights, it is difficult to determine the amount to hold each flight at the gate. This paper discusses how the optimization procedure simultaneous perturbation stochastic approximation (SPSA) can be used to process delay cost measurements from air traffic simulation packages and produce an optimal gate holding strategy. As a test case, the SIMMOD air traffic simulation package was used to model a simple four-airport network