The coming 12 months will be critical in the creation of a comprehensive and sound roadmap to reform European air traffic management
There are few more important developments within European aviation at the moment than the attempts being made to reform and modernise
|The industry increasingly prefers to separate regulation and service provision|
the region’s air traffic management (ATM). On offer is a chance to make significant improvements to three of the main areas of concern for most airline boardrooms – aircraft emissions, capacity constraints and delays. The European Commission (EC) estimates that greenhouse gas emissions will be reduced by 4-6% by the development of a more efficient ATM system, and with traffic forecast to double by 2025, the consequences of inaction are pretty clear.
The good news is that progress is clearly being made. Reforming such a complex system, where safety is paramount, will take time, with a mixture of short-term and long-term gains, and plenty of hard-fought debate over the reforming process itself and, indeed, the future shape of European ATM. It is worrying, however, that it is far from clear how the improvements will be paid for.
The attempt to remould Europe’s air traffic systems goes back to November 1999, when then transport commissioner Loyola de Palacio launched the Single European Sky initiative at a time when the region’s air transport delay problem was at its most chronic.
This culminated in a plan to introduce Single Skies in three phases, starting with the building of a technological road map for ATM reform, dubbed SESAR, that will last from 2005-7.
This will be followed by the development phase (covering 2008-13) that will focus on systems design and producing the key systems components. After this comes the deployment phase, lasting from 2014 to 2020.
In short, what is at the stake is the very shape of European ATM for the 21st century, and, not surprisingly perhaps, all sides of the reform process are eager to have their say. “This is the right moment to start thinking not just about our hardware and software needs, but about the entire system of ATM, including procedures, the way we train people, and the roles of the various players involved,” argues Eric Kroese, chairman of the Dutch air navigation service provider (ANSP) Luchtverkeersleiding Nederland. Kroese also represents European ANSPs on the Industry Consultation Body (ICB), of which he is also the vice-chairman. The ICB was set up by the EC to give stakeholders a say in the implementation of Single Skies.
In November last year, the EC, Europe’s ATC management organisation Eurocontrol, and the Air Traffic Alliance consortium signed the contract for SESAR. The Air Traffic Alliance is a consortium led by EADS, Airbus and Thales, which have come together to co-operate on ATM issues.
Days later, the EC published its official communication on SESAR, an event which highlighted some of the divisions among the key players in European ATM.
The EC vision is a centralised, Brussels-led pan-European approach, which some (including Brussels) have compared to the Galileo Satellite project. ANSPs, however, argue that industry should play the lead role in SESAR.
When the EC communication was made public, many felt that, despite the involvement of the ICB, industry was being ignored. “Industry representatives fell over themselves when this came out, as virtually none of the results of the consultation with the ICB had been incorporated into the findings of the EC,” says Alexander ter Kuile, secretary general of CANSO, the trade body for ANSPs.
Ter Kuile complains that while the Single Sky project has, in part at least, been about liberalising Europe’s ATM, as happened with the airline industry 15-20 years ago, the EC’s approach to SESAR has contradicted this. “SESAR is being treated with a classic government sector approach,” he says. “Yes, free funds for research and development, discuss what the new system parameters should be, but don’t get involved in implementation.” CANSO has always made clear the need for the EC to provide an overall framework, but argues that industry should take the lead role in implanting the project.
Brussels has made no secret of its belief that it must play a key role in order to overcome the lack of co-ordination in the past and provide a body that is capable of taking decisions on a Europe-wide basis. Ter Kuile feels that this is the wrong approach. “The problems in the past have been because of too much government involvement. We have had politics in every decision,” he complains.
The EC, however, feels that it has done enough to provide industry with a voice through the involvement of the ICB. “It is worthwhile noting that ANSPs are the largest group of industry contributors to the work,” it notes. “The SESAR definition phase is very much undertaken by the industry, for the industry. It represents a total sum of €60 million ($72 million), coming from Eurocontrol and the EC, which together are entirely funding industry participation to the work.”
Brussels also notes that for the development phase that will follow on from SESAR, the EC is proposing to set up what it calls a “joint undertaking” to oversee this stage of the project. “It is foreseen that industry will, and this is unprecedented in similar organisations, be represented in the administrative board of the joint undertaking, the main decision-making body for this phase.”
Victor Aguado, director general of Eurocontrol, also argues that a centralised approach, with industry representation, is needed. He states: “If we want cost-effective systems that serve the purposes of the airline industry, we need a pan-European approach. We cannot have fragmentation. We need an approach based on a common master plan.” He adds: “We still have plenty of time to define and discuss how we develop and implement the programme. But it must not be a top-down or a bottom-up approach – it must be an interaction between both.”
This need for a combination of a centralised and localised approach is a common refrain from all sides, and much of the debate at the moment is about setting the balance between these two.
“Part of the problem is that since the beginning, opinions have been polarised,” says Jeff Poole, director, industry charges and taxation at IATA. “Some have been promoting the top-down approach, while others, particularly the ANSPs, have been pushing for the bottom-up approach. Where we are now is somewhere in between.”
Poole states emphatically: “We must have both approaches with the EC providing the legal framework that will enable ANSPs to build functional airspace blocks (FAB) that are based on efficient design rather than national boundaries.”
Poole also makes the point, echoed by others, that the project must not be technology-driven. “It must be driven by genuine FAB requirements,” he insists.
The EC seems to have taken at least some of the reaction to its consultation document on board and most seem confident that Brussels is listening and that a satisfactory middle ground is achievable. “I’m convinced there is a good spirit of co-operation with the ICB,” says Kroese. “The EC is familiar with the way it has handled large projects in the past, such as Galileo, but many of us in the industry doubt that this is the right approach this time round,” he explains. “SESAR is not a project where we want to see technology-push, but much rather demand-pull,” he says, adding that “much effort is going into making sure that system and equipment providers understand industry’s needs and requirements”.
IATA’s Poole explains that the airline trade body has been hammering home the message that cost efficiency must be a key requirement, and notes the trade body is making some headway in this respect. “Everyone is now talking about the business case,” he says. “We want to see proper business cases and make sure that the legacy systems are shut down.”
IATA is also warning that it has concerns about how the reform process is being funded. “We are not pre-financing this by increased charges,” Poole states. While the issue of financing is far from finalised, Poole suggests that money will have to come from public sources and a form of project financing may have to be developed. He argues that the EC and member states have an obligation to put some money in. “There are huge economic benefits,” he says. Indeed, the EC estimates that the project will add €50 billion to European growth through more efficient transport networks, and create 200,000 skilled jobs.
The suggestion that has been put forward by Brussels is that the €2.1 billion cost of the scheme should be split three ways, with the EC, Eurocontrol and industry each contributing €700 million. Essentially, however, the question of financing is still up in the air.
For their part, ANSPs warn that neither airlines nor ANSPs can be expected to foot the bill, and certainly not the upfront investment through user charges. “We have no other choice,” warns Kroese. “As soon as the costs and investment occurs, we have to put them into our operating costs – and this goes into route charges.”
He notes that the present method of funding ATM through cost recovery “is not really compatible with very large up-front investments”. ANSPs have become increasingly commercialised over the last decade, and have long complained that cost recovery is a major handicap to the industry.
Kroese says that project finance may be a possibility, but cautions: “It has to make sense for all stakeholders and must spread the burden evenly.”
IATA, meanwhile, also has concerns about the pace of SESAR and, unusually perhaps for European ATM issues, the fear is that things are going too fast. The definition phase of SESAR is set to last 24 months, starting from this March. ”What worries us about the EC position is that it is a mandate with a timescale. There is a fear that the attitude will be – as long as we do something, it doesn’t matter what,” says Poole.
Lack of continuity
He is also concerned about the possible lack of continuity between the different phases of the project. “We’re saying the whole process should be treated as a whole,” says Poole.
The role of Eurocontrol within the future European ATM system has been hotly debated. ANSPs have come to resent Eurocontrol’s joint position as both regulator and service provider – or, essentially, competitor. One of the cornerstones of a Single European Sky is the separation of regulation and provision, which is taking place at national level. Eurocontrol operates the Maastricht air traffic control centre and the central flow management unit (CFMU), and also carries out various other functions ranging from research and development to training programmes.
“We must have a separation of provision and regulation. Eurocontrol’s regulatory tasks can’t be combined with provision,” says ter Kuile, adding that while ANSPs have been forced to cut costs, Eurocontrol is still seeking increases in its budget. “I don’t see any cost-efficiency measures,” he says.
Eurocontrol’s Aguado says there is a clear distinction between the organisation’s agency and regulatory branches. “The agency part does not have regulatory powers,” he says. “There is a clear distinction – the concept of separation is clear at Eurocontrol.” He argues that functions such as research and development need a pan-European agent to prevent fragmentation.
The EC adds its support to Aguado’s viewpoint. “The Single European Sky regulations only require a functional separation of regulatory activities and service provision. Therefore a total organisational separation into two independent entities is not a legal requirement,” Brussels states.
However, the EC also says: “Eurocontrol’s role in the ATM system is particularly sensitive as it supports the EC in drafting European regulations, so we do have to continuously assess whether the current level of separation is sufficient to ensure independence of legal drafting.” Brussels adds: “This policy line was also evident in the recent Commission communication, that proposed to build EASA into a fully fledged ATM authority, that would be able to support the EC’s work from an independent position.” In 2010, the new European safety agency EASA will have responsibility for setting ATM safety standards within the European Union.
The pressure is clearly on Eurocontrol, given the clear separation between regulation and provision that is developing within Europe. Some also see the requirement for a separation of functions likely to see an end to Eurocontrol’s management of the Maastricht centre. “In our view this would be best transferred to a joint venture owned by the ANSPs of the states involved,” says Kroese.
His Dutch ANSP would, of course, be a likely candidate for this, given that the centre covers the Netherlands, Belgium, Luxembourg and northern Germany. DFS, the German provider, has also made clear it is interested in cross-border projects of this nature.
Indeed, while the discussions about ATM reform go on, Europe’s ANSPs are, in any case, looking across national borders. The UK and Irish providers are co-operating on the North Atlantic; Danish and Swedish ANSPs have developed even closer links, including joint training, with Norway also forging closer links with its two Scandinavian neighbours. The Swiss are working closely with the French and Austrian providers to create closer ties, while CEATS – a multinational FAB project managed by Eurocontrol, rumbles on (see box).
There is clearly a lot happening within European ATM at the moment, and if there is agreement on one thing, it is that 2006 will be a crucial year. Europe needs to pave the way for a radical overhaul of its ATM system next decade. “The commitment of industry to develop new ATM systems only makes sense at the end of the day if it is implemented,” warns Olaf Dlugi, chairman of the executive board of the Air Traffic Alliance. With traffic levels set to double by 2025, failure would have dire consequences. But, while much remains to be decided, things do seem to be heading in the right direction. ■
COLIN BAKER / LONDON
IATA loses patience with CEATS airspace project
Five states have ratified CEATS – a multinational functional airspace block project to create a Central European unified upper airspace centre, managed by Eurocontrol, covering eight states within the region – but with Austria, the Czech Republic and Slovenia now working on their own co-operative project, and most of those involved clearly running out of patience, many see the project as effectively dead.
IATA director general Giovanni Bisignani wrote a letter in January formally withdrawing the body’s support for CEATS. The project has been in the making since the mid-1990s, with very little to show for it. “We need a fresh start using the Single Sky framework to create FABs, building on the work that CEATS has already done,” says Jeff Poole, director, industry charges and taxation at IATA.
Victor Aguado, Eurocontrol director general, argues that CEATS is vital for the region, which has above-average traffic growth, and that it would be a mistake, not to say difficult, to ignore the fact that five national parliaments have ratified the project.
But Poole says: “The fact that it needs a lot of unwinding is not a good enough reason to go ahead. There is no confirmation that it can deliver cost-effective solutions, never mind in the time-frame suggested.” He adds that the structure of CEATS around a series of international treaties between member states is “outdated”.