Short-term Allocation of Time Windows to Flights through a Distributed Market-based Mechanism Andrea RANIERI Dipartimento di Elettrotecnica, Elettronica e Informatica, University of Trieste, Italy Advisors Lorenzo CASTELLI Dipartimento di Elettrotecnica, Elettronica e Informatica, University of Trieste, Italy Raffaele PESENTI Dipartimento di Matematica Applicata, University Ca’ Foscari of Venice, Italy Abstract The allocation of ground delays to flights is a tactical tool commonly employed to control the flow of air traffic and to ensure that available capacity of system resources is respected. Under the current European system these delays are assigned by the network manager according to a First-Planned-First-Served principle, without taking into account the in- dividual cost of delay suffered by different flights. We formalize a decen- tralized, Individual Rational and Budget Balanced market-based mecha- nism for the collaborative assignment of delays among flights, based on the Lagrangian relaxation of the central assignment problem. It allows flights to pay for reducing their delays or to get compensations if they accept an increased delay with respect to the First-Planned-First-Served rule, in the general case of multiple capacity constrained resources and without requiring the disclosure of Airlines’ private information. Some computational experience based on a real case instance is reported. 1 Introduction The Air Traffic Flow Management (ATFM) is the service responsible to regulate flights in order to ensure that the available capacity of the system is efficiently used and never exceeded, to enable a safe, ordered and expeditious flow of traffic. In Europe this concept has recently evolved to the wider Air Traffic Flow and Capacity Management, to underline its role in managing the balance between demand and capacity by coordinating all actors involved. In Europe this service is provided by EUROCONTROL Central Flow Management Unit (CFMU), which acts as network manager by comparing the projected air traffic demand resulting from filed flight plans with the available capacity of system resources (i.e. airports and air traffic control sectors of airspace) as declared by the national Air Navigation Service Providers (ANSP) through the activation of ATFM regulations (or simply regulations). Each regulation specifies the affected 1