The operational solutions for Air Traffic Management (ATM) have considerably evolved in the last decade thanks to the technological progress in digital systems, while the business model for service provision is still mainly organised vertically, with national Air Navigation Service Providers (ANSPs) covering the majority of air traffic control market worldwide.
The approach to modernisation and market opening has been often been addressed in a reactive approach, stemming from catalytic events raising the public attention on certain limitations of air traffic service provision and infrastructure.
The first signals of market opening have being registered with the privatisation of tower control provision in several Countries (e.g. Germany, Spain, Sweden, UK, U.S.), motivated by an increased cost efficiency for the established ANSP, who can abandon service provision at the least profitable towers while allowing opportunities for new entrants to establish a sustainable market at a generally higher quality of service for aircraft operators while lowering prices.
The measurement and analysis of the performance of service provision in ATM are central to the efficient steering and management of operations, due to the sensitivity of Airlines balance sheets to the inefficiencies of the system: a 1% reduction of route length/time could save about 254 M€ to Airlines operating at Top-10 European congested airports, and 0.44 millions of tonnes of CO2 to the environment1. To accurately measure the impacts of any new measure or solution in ATM it is therefore of the utmost importance for the users to rely on a solid performance framework.
1 Based on fuel cost (0.56/kg), fuel combustion (11 kg/NM), CO2 conversion (3.15), and delay cost (75€/min) as published by Eurocontrol Standard Inputs for CBA. Delay and traffic figures from Eurocontrol PRR 2019
The ICAO Performance-Based Approach (PBA)
ICAO supports the holistic evolution of ATM through a comprehensive Performance-Based Approach (PBA), described in details in its Doc. 9854 and 9883. The ICAO PBA is a multilateral and transversal tool applicable to any part of ATM, including technical aspects, like economic, operational management, systems improvement and more political ones, such as policy making and regulation definition.
The PBA implementation is based on a 6-steps process, guiding the stakeholder from the identification of the problem to the final review of the achieved results, through the definition of a Performance Framework, and more in details of a set of Key Performance Indicators (KPIs), to be used for the quantification of targets and measurement of performance before and after solution deployment, as shown in next figure.
Source: ICAO Doc 9883
The European regulatory context
The European market is an important example of how the implementation of PBA could support the evolution of the ATM sector.
With the creation of the Single European Sky (SES) initiative in 2004 (EC Reg. 549/2004, known also as the Framework Regulation) and the definition of common requirements for ANS provision (EC Reg. 550/2004 – the Service Provision Regulation), the European Commission (EC) has been pursuing a performance approach to the harmonization of ANS provision across Europe, defining along 4 Key Performance Areas (KPAs) a set of high-level goals at political level: a 3-fold increase in capacity, a 10-fold increase in safety, a 10% reduction in environmental impact (per flight), and a reduction in cost to airspace users of 50%. These goals were intended for 2020 and referring to the 2005 performance baseline and still valid and kept relevant through the EU ATM Master Planning activity, which translates them in a detailed set of performance ambitions:
- Reduction of 500 kg of fuel burnt and 4.5 minutes of travel time per flight,
- Increment of airport capacity by 10%, TMA capacity by 47% and En-Route capacity by 50%,
- Increment of flight predictability by 100% and punctuality by 3 minutes per flight,
- Increment of ATCO productivity by 100% and reduction of technology cost by 40%.
Such complex context must be clearly supported by a Performance Framework (PF) able to capture in a robust manner the desired outcomes at political, operational and technical levels. Whilst the ICAO PF defined in Doc. 9883 is composed of a set of 11 Key Performance Areas (KPAs) addressing comprehensively operational performances, social outcome, global interoperability and participation of the community, at least two PFs have been implemented and are currently used in Europe: the SES one, used by the EC for the definition of operational performance targets, and the SESAR one, applicable to R&D activities for the evaluation of the impacts of the Solutions being developed. Although these are consistent, they are not fully coincident, due to the different purposes they fulfil, as depicted in the figure below.
Source: ICAO Doc. 9883, SESAR and SES performance frameworks
The SES Performance Scheme Regulation (EU Reg. 390/2013) mandates then ANSPs and the Network Manager the fulfilment of a series of quantitative targets within Reference Periods (RPs) of 5 years at EU-wide level along its 4 KPAs. European Member States have to submit their Performance Plan (PP) at the beginning of each RP, detailing how they intend to achieve their expected contribution to the overall performance. These Performance Plans are reviewed by the EC, through the Performance Review Body (PRB), which may request modifications before their formal approval and entry into force.
At the beginning of each RP, the results in the previous one are reviewed and the gaps with the targets assessed in consultation with the stakeholders. The new national performance targets are defined taking into account not only the gaps but also the capabilities of each Member State in achieving it and its contribution to the overall targets. In fact, a technical programme is defined at the EU level for the deployment of certain SESAR Solutions that are mature, require synchronisation and are considered essential operational changes within the Master Plan, mandating their deployment dates through CP1 EU Reg. 2021/116.
The Covid crisis and the adaptation of EU regulations
Such a complex performance framework leverages on a sensitive balancing of three main forces: on one side, the ambitions of the EC as the Union legislator, which mark the magnetic north for the whole system to evolve. On the other hand, there are the Member States represented by National Supervisory Authorities (working in close cooperation with their ANSPs), who look at their national ATM sector sustainability, defining the performance improvements and solutions to implement, their related costs, and the charges needed to be collected to cover them. Finally, there are the Airspace Users (AUs), who are the consumers of ATM services, expecting certain quality levels at a fair price they pay through charges while striving to ensure business profitability.
Currently, Europe is flying across its third RP (i.e. RP3), which was launched in 2019 with the publication of the new performance and charging scheme by EU Reg. 2019/317 and continued with the submission in November 2019 of the updated PP by the Member States, in preparation of the RP3 activation in January 2020.
Then, the COVID-19 pandemic abruptly came into the picture, causing the sharpest traffic decline in the history of aviation. ANSP revenues dropped thus freezing investments and causing delays to implementation programs, airlines indebtedness and bankruptcy, to focus just on the tip of the iceberg.
Source: Eurocontrol PRU data
Because of this unprecedented situation and the impossibility to have reliable traffic forecasts in support of performance planning, the EC decided to derogate certain rules initially defined for RP3. Moreover, according to EU Reg. 2020/1627, the Commission reviewed the initially defined targets for RP3 in May 2021, with the support of each Member State through the sharing of their expected national traffic forecast. As a consequence, also Member States are requested to review and submit by October 2021 an updated version of the PP for RP3, in light of the newly defined Network-wide targets and the traffic recovery across 2021.
But the collateral effects of the COVID go far beyond the ones described up to the moment: also unit rates and service units will be reviewed, taking into account total ANSPs revenue loss with respect to the forecasted figures that did not account for the traffic decline caused by the pandemic. This will have a direct effect on the balance of Airlines, who will face an increment of air navigation service charges to partially compensate the ANSP losses. This highlights the importance of scalability for ANSPs costs, who should be capable of reflecting the actually provided services through variable costs, instead of relying on fixed costs as is the case today due to the capital intensive infrastructure they need to invest in. Would the new digital European Sky allow for more Infrastructure-as-a-Service to be introduced in the business models of ANSPs? This is the political direction taken by the EU Commission with the “ATM Data Service Provider” (ADSP) figure advocated in the Airspace Architecture Study, but the world was not built in a day…
The whole aviation sector in Europe needs to rely on a solid data-driven approach to estimate and take into account all these effects to mitigate the spreading over time of the negative effects of COVID-19. Member States and ANSPs should carefully address the revenues expected in the upcoming years, to not impact excessively on AUs balances, supporting the sector recovery. Member States should consider not only ANSPs needs, but also the long-term sustainability of Airline operations to come back stronger and united from this crisis.
At ALG we are equipped with the most advanced tools and techniques to support any stakeholders along the aviation value chain, in tackling the complexities of applying performance analysis to the day-to-day business and convert it in a unique tool to strengthen operations.
About the authors
Andrea Ranieri is PhD in Operations Research and Senior Manager at ALG. email@example.com
Davide Marchesan is MSc in Aeronautical Engineering and Consultant at ALG. firstname.lastname@example.org
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