Cost effective ATM – from the perspective of airspace users Torbjørn Lothe, ATM Conference 19 May 2015

2

A need to modernise the global ATM system

European airspace is among the busiest in the world Over 33 000 flights on busy days and high airport

density "Antiquarian" organizational structure & old

technology solutions The need to modernise and streamline the

global ATM system is clear From an airline perspective, the benefits will be

seen in a number of areas: Capacity improvements Environmental savings Cost reductions Fewer delays Continuous improvement of today's renowned safety in air

transport

3

Fragmented organisation of the European airspace

The airspace in Europe is organised in a fragmented way There are 37 different ANSPs in Europe 63 enroute centers, with

Duplication of tasks

A comparison:

US: 20 ACCs A Eurocontrol study from 2010 showed that the US ATM system is

able to manage 67% more flights with less air traffic controllers. Key word for this is fragmentation in Europe

Russia: Plan to consolidate its ACCs to 13

4

Fragmentation means increased costs

Total economic cost of €12.7 billion In 2012, the failure to implement SES resulted

in: €4.5 billion in costs from flight inefficiencies 10.8 million minutes of ATFM delays costing an

estimated €1.45 billion; 7.8 million tonnes of wasted CO2

(Source: Eurocontrol)

5

Need for reform

SES aims to triple European capacity and half the unit costs of delivering ATM

To achieve this EU has established a framework of five pillars: technology, safety, performance, airports and human

factors Two packages of regulation have been put in

place (in 2004 and 2009) and a third (SES II plus) is still in process of adoption (?)

Yet, a lot remains to be done before the objectives of SES are fulfilled

6

Slow implementation of SES in Europe

We see a political inertia in the European Member States to move things forward within this area the development of performance plans by states and

FABs has been slow Minimum progress with FABs –not optimized airspace

along air traffic flows, nor optimized human and technical resources

The total economic cost of ANS across Europe still remains unacceptably high ANSP’s continue to make significant profits above that

proposed to regulators European airline earnings over the same period were the

lowest amongst the worlds major regions

7

Slow implementation - why?

Historically, most air traffic providers are state-owned in a monopoly market

Close links between many Member States and ANSPs

The incentives to change have been weak for the ANSPs – bottom-up approach

Strong unions with a lot of power Issues relating to sovereignty and military

restrictions

8

What needs to be done – in Europe and in Norway respectively?

In Europe – to mention a few areas: Stronger and targeted SES legislative reforms Member states and FABs must have a clear

commitment to structural changes with binding targets and financial incentive mechanisms FABs should be able to demonstrate fulfillment of SES

targets

Number of ATCCs in Europe should be reduced European airspace will need to be operated

collaboratively as a network Service providers will need to form broader/different

relationships and reach a greater level of collaboration

9

What needs to be done – in Europe

Standardisation of ATM equipment is an effective means of increasing the efficiency of ANSPs – SESAR is key

Support services should be unbundled and rationalized at FAB level - or possibly as centralized services?

Control tower services should be open for competition

10

What about Norway….?

Avinor Air Navigation Service (Avinor Flysikring AS) has, since summer 2014, been a subsidiary to Avinor AS We welcome this decision, but We believe that Avinor Flysikring should be completely

separated from Avinor AS Today, the ties with Avinor AS is still too close to ensure

sufficient independence Avinor Flysikring is currently the only ANSP in

Norway Appointed by the Ministry of Transport and

Communications For en-route; 2024 Terminal: 2017 (together with Avinor AS)

11

Changing for the future

The Norwegian Government has decided that control tower services should be open for competition We welcome this decision! Why?

It will establish a competitive marked for ANSPs in Norway providing a strong incentive for the competing ANSPs to provide

efficient control tower services at a lower cost than we see today It will "force" Avinor to rationalise and reorganise its

services - focusing more on the costs for the "end-users" It may adversely be a new business opportunity for Avinor

Remote towers being one such possible area

12

Essential elements in achieving the wanted result of a competitive marked?

Control tower services at several of Avinor's towers should be bundled together before a call for tender is made Giving a more solid base for a good business case

The issue of ownership of required ATM infrastructure needs to be decided on – how will remote tower solutions fit into this? We believe that the airports should have ownership of

necessary ATM infrastructure However, most importantly: ownership must not be an

entry-barrier for new ANSPs For the private Norwegian airports: crucial that Avinor

provides sufficient information to allow them to stipulate accurate requirements etc. in a future tender

13

The importance of the SES Performance Scheme – enroute

For en-route: Avinor Flysikring has become more efficient and cost

driven these last years The reason behind these changes being the introduction

of the SES Performance Scheme for enroute services Avinor's enroute charges are now amongst the lowest in

Europe Still, there are areas of continued improvement:

Today, enroute service is provided from one ATCC – located in three different places (Stavanger, Røyken and Bodø) Do we need three "branches" of the ATCC in Norway – extra

costs? Overhead costs

14

The importance of the SES Performance Scheme – terminal charges

For terminal charges: Up until SES RP2, no special targets were set for

Determined Unit Cost (DUC) for terminal ANS Avinor's terminal charges are high Now, in SES RP2 targets for DUC for terminal charges

are introduced Will this affect the level of charges?

Other factors contributing to high terminal costs: Use of AFIS in airports instead of ATC? Strict language proficiency requirements? Is the criteria used to allocate costs between terminal

and enroute services correctly applied?

15

NEFAB – is it really a FAB?

Norway is part of NEFAB, but why? According to Prop. 143S (2011-2012) "the

savings for the users and ANSPs of the establishment of NEFAB will amount to approx. 400 million Norwegian kroner per year from 2015, and more than 600 million kroner per year from 2020…. for the period 2015–2025 shows savings between 2 400 og 2 700 million kroner…."

Based on progress so far – we are not convinced…

Has to deliver free route airspace in agreement with NUAC

I 16

with IATA's SOS for SES