In the first of this three-part blog series, Gavin Fourie reviewed a quarter century of technology change in air traffic management (ATM). In part 2, Gavin looks at a decade of institutional developments in ATM and what is still left to do.
The liberalisation of airlines in the EU and the US has led to increased competition on routes, both from low cost carriers and between more established airlines (which are now able to operate direct flights between a greater range of airports). Low cost carriers have proved a challenge to the national incumbents, in a few instances leading to their bankruptcy or takeover. However, the result is a greater breadth of choice for passengers. Ultimately, liberalisation has created a competitive market where price and quality is determined by business model and competition rather than regulation.
Change has been somewhat more modest in the behind-the-scenes world of Air Navigation Service Providers (ANSPs). ANSPs are still, in the main, owned and controlled by their government. To some extent, this situation may not be surprising considering 'control' of any one airspace sector must be provided by one authority (at a time), and is a concept to which sovereignty is inevitably tied – at least in popular consciousness. Furthermore, the ATM industry provides a substantial number of well-paying jobs which it can be politically expedient to protect.
The Single European Sky
The Single European Sky was initially conceived in the early 2000's to deal with chronic delays and to provide a means for increasing capacity to a fast growing sector. Delays have substantially reduced since its conception; however this was largely due to a reduction in traffic – improvements to delays occurred before the legislation was passed in 2004. Decreased traffic growth shifted the focus of future regulation from delay mitigation to cost reduction – the era of performance based regulation was born.
The first package of the Single European Sky legislation (SES I) addressed the safety of European airspace by transposing ESARRs (EUROCONTROL Safety Regulatory Requirements) into EU law, making safety standards mandatory at the EU level. SES I also created the requirement for separate service providers and regulators, thus ensuring that service providers are subject to independent regulatory oversight and removing the potential bias that is inherent in an organisation that regulates itself. The introduction of the Common Charging regulation made the costs underlying air navigation charges more transparent, but didn't attempt to reduce those costs. Functional Airspace Blocks (FABs) were introduced to organise airspace sectors around operational requirements rather than national borders. FABs were originally seen as a way to encourage defragmentation of airspace in Europe and reduce inefficiencies in transferring between small sectors on cross-continental flights, thereby increasing capacity.
SES I was reviewed by the European Commission in 2007. It concluded that progress was not fast enough and that further action was needed in terms of improving performance. This action took the form of SES II.
SES II realigned the focus on performance, establishing the Performance Scheme and amending the Common Charging regulation to include provisions for cost and traffic risk sharing (between airlines and ANSPs). It also moved the focus of ATM safety regulation towards EASA (European Aviation Safety Agency). The FAB concept was redefined to focus on efficient service provision rather than consolidation of airspace. Reducing costs had become the 'mode du jour'. The intention was to encourage ANSPs to provide common services thereby reducing unnecessary duplication of activities and thus reducing costs.
The Performance Scheme has ended the process of full cost recovery and requires ANSPs to submit performance plans for five-year periods. EU-wide targets are set by the Single Sky Committee consisting of EU Member States. Once targets are set, States have to draw up Performance Plans for each Reference Period. The Performance Plans detail ANS providers' costs and contain performance targets for each organisation. These are then assessed by the Performance Review Body (PRB) to ensure they are consistent with the EU-wide targets. The Performance Scheme has ended the process of ANSPs recovering their full costs from airlines. However, as the targets have been somewhat low in ambition, this has not yet led to substantial cost reductions. The issue remains that States, which set the binding local targets, are the major or sometimes sole shareholder in the ANSPs.
SES II also saw the establishment of the Network Manager to design the European route network and to co-ordinate resources such as radio frequency allocation and SSR transponder codes. The Network Manager is also responsible for ensuring that there is sufficient capacity in European airspace and for overseeing air traffic flow management across the continent.
In parallel the SESAR Joint Undertaking (SJU) was created to oversee and concentrate European ATM research and development, supported by the combined resources of European ANSPs, airport operators, and manufacturers. SESAR is the technical pillar of the SES. The SJU maintains the European ATM Master Plan, which is intended as the blueprint for the technical and operational future of European ATM.
Has SES succeeded?
The Single European Sky has had some successes; in particular the separation of regulation and oversight from service provision is largely complete across Europe. The independence of regulators has reduced the conflict of interest inherent in a single organisation both submitting plans and approving them.
There has also been progressive corporatisation of ANSPs, which were often initially government departments, to an extent that some now more closely resemble private enterprises in structure and operations. Furthermore, the creation of the Performance Scheme has started to put some downwards pressure on costs.
However, there has been little real progress in combating the inefficiencies of fragmented airspace (and ANSPs) across Europe, and the consequent high costs of air navigation charges paid by airlines. Most FABs have missed the deadline for implementation and the majority are now facing formal infringement proceedings. Perhaps most importantly, FABs have not been as successful in reducing costs as it was hoped.
Politically, SES is at a cross roads. Although much has been achieved, the fundamental transformation required to reduce fragmentation and deliver a high quality service in a cost effective manner has yet to materialise. From a regulatory perspective do we need more tools? Better enforcement of the current ones? Or do we need to free the service providers so that they can work more closely together?
In the third and final blog in this series we will look at the potential impact of SES2+ and some of the industry's responses to the challenge of improving performance.
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