Private competition in the provision of 'contract towers' has helped drive down US air traffic control costs and the opportunity is there for similar savings to be made in Europe, says former CANSO chief executive Graham Lake.
As 2012 drew to a close, the US Office of the Inspector General (OIG) published an audit report on privatised air traffic control at airports. These "contract towers" are providing services at smaller US airports and are a small but significant piece of the US ATM system. The audit highlights lessons learned, particularly in the area of costs.
By contrast, last October, EU transport commissioner Sim Kallas published his own report on the progress of the Single European Sky (SES). He lambasted the poor progress of EU states in delivering the SES objectives. Kallas said air traffic control is "still far too expensive", and that "we are still hampered by a high level of delays".
Of course, it is easy to criticise any programme that tries to harmonise political, financial and technical strategy among the 27 EU states and their neighbours, and SES is no different. Despite these challenges, the European ATM system does work well most of the time. It is safe, delays are not as bad as in the past, and charges are, thanks to the EU performance scheme for air navigation, improving.
Even so, there is no doubt more needs to be done, especially when comparing the relatively modest cost-saving efforts of the ATM providers against the swingeing cuts being made by many of the world's legacy airlines.
Kallas stressed that better progress with SES is vital for air transport and for society as a whole.
Members of ICAO met in Montreal in November for their once-a-decade gathering to agree at state level the global strategy for ATM for the next 10 years and beyond. SES and NextGen each play their part in this Global Air Navigation Plan.
The EU political objective for SES is to establish a framework within which ATM capacity can treble while unit costs are halved, and safety and environmental performance are improved. The target date set was 2020. After all, said the politicians (and airlines), the USA can apparently delver unit costs about half of those in Europe, so the latter should be able to reduce their to a similar level.
The OIG audit report offers cause for cautious optimism. ATM charges accrue from both en-route and terminal services. In Europe, the requirements of the EU performance scheme will drive consolidation, harmonisation and related efficiencies. But competition for en-route service provision is still a long way off.
In the terminal environment, which deals with ATM on the ground and around the airport, things are different. In simple terms, it is the 10 minutes' flying at either end of the flight. This is where true price and service competition in ATM is gathering pace. Here, state-owned air navigation service providers are not always the providers of choice. The market has already shown in some parts of the world that there are sometimes better alternatives.
The USA has used private contract providers of ATM services for smaller and low-activity airports for many years. In 2012, this included 250 towers in 46 states and four overseas territories. Three private contract companies successfully compete in the USA to fulfil the needs of these airports and communities.
The OIG audit report makes fascinating reading. It concludes operating costs at the smaller contract towers are significantly lower than comparable FAA towers. How much less? Are you sitting down? Contract towers in the USA for the sample of 30 comparable airports analysed cost just one-quarter of their FAA counterparts, while providing cost-effective and safe air traffic services - a saving of 75%. Put another way, FAA towers are four times more expensive than their private counterparts on a like-for-like basis.
The OIG audit helpfully provides details of all contract and FAA towers in the sample, staffing levels, costs and traffic density metrics. It is clear that contract towers employ significantly fewer staff at each site and pay lower average rates than the FAA. The OIG has concluded that saving ATM costs is not rocket science.
So what are the opportunities for adopting a contract tower policy in Europe? Some EU members, notably the UK, have an established procurement structure and culture in which airports competitively tender their airport ATM services. Sweden, Germany and, more recently, Spain are starting to follow suit.
The USA is able to enjoy theoretical unit rates for ATM at near half the European equivalent, yet still apparently offer further significant opportunity for cost reduction. Perhaps Kallas, in his quest for progress, should take note.
About the author: Graham Lake is a principal at Aviation Management and has spent his career in aviation services and ATC, most recently serving as director general of CANSO