"For small and regional airports, does air traffic control provide a competitive advantage? Or does it just need to work?"
This was the question posed last week by my colleague Steve Leighton, to a mostly airport audience gathered at Helios to hear a range of speakers and topics alongside the fantastic flying displays happening right next door at the Farnborough International Airshow.
The question arises as a result of looking at the economics of small and regional airports, and the uphill battle they face to break even, let alone make a profit.
Airports Council International (ACI) note in their recent annual economics report that 43% of Europe's airports are loss making. Indeed, if you just look at those airports handling less than 1 million passengers per annum, the proportion is even higher at 75%. Net profit at these smaller airports averages minus 6% and return on capital invested averages minus 1.8%.
These figures help explain why 'white knight' investors from the private sector are hard to come by, and why re-nationalisation and closure of smaller airports have been happening.
So why the question?
To survive, small airports need to focus on tight cost control without compromising the services they provide that will ultimately allow them to successfully attract airlines and passengers. Cutting services sends a powerful signal to potential airline operators about the viability of the airport as a destination. However, most small airports are already undertaking a careful balancing act between cost cutting and providing necessary services. So how else do they find ways to cut their costs? This is where air traffic control comes in.
Air navigation service costs represent a significant element of a small airport's overall operating cost, often between 10%-20% and occasionally as high as 50%. Many small airports are already running at a minimum in terms of staffing, hours of operation, capital investment etc. Air traffic control is one area where the advent of new technology and some pioneering work in Sweden, France, Australia and the UK offers significant cost savings for those airports and regulators prepared to make some changes. If air traffic control just needs 'to work', then sharing services and costs with other airports could make sense.
The 'small' shared service pioneers
Some small airports already share services. A shared approach control has been in place in Liverpool UK since 2006, which provides approach control for Robin Hood Airport (Doncaster/Sheffield), 110 miles away - producing cumulative cost savings to date of £3m. In October 2013, the Montpellier operational unit in the South of France began providing approach control service to four commercial airports (Montpellier, Nîmes, Béziers and Perpignan) that previously provided their own approach control.
The logical next step is to share tower services across multiple airports – the so-called 'Multi-tower concept'. Analysis by Helios shows the potential to save 40% per annum in staff costs alone, ignoring the other benefits that the concept can offer in terms of recruitment, job satisfaction, rostering, training etc.
It is technically possible thanks to developments from companies like Saab and Searidge. Video cameras, thermal imaging cameras, microphones and more combine to offer a shared service solution suited to low complexity and traffic environments.
Whether, and how to transition?
As with all things aviation, there are many questions to answer before reaching a decision on whether shared services is feasible or desirable, and whether remote towers have a role to play. There are business cases, risk and safety audits, certification issues and more. These topics were covered by others speakers over the course of several events at Helios during Farnborough Airshow week. To access the materials or discuss this topic in more detail, contact Steve Leighton or Nick McFarlane.
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