Single European Sky to cost €30b: EC

London
Source:
This story is sourced from Pro
See more Pro news »

A high level European Commission task force has put a €30 billion ($42.6 billion) price tag on the Single European Sky project, but warns that the cost of delaying its implementation by a decade could rise to as much as €150 billion.

The study was carried out at the behest of the Council of the European Union by the Commission with the help of Eurocontrol and the SESAR Joint Undertaking.

In addition to the potential billions of euros a 10-year delay would cost in lost GDP, the report said it would also lead to the production of an avoidable 150 million tonnes of carbon dioxide through inefficient air traffic management.

Nonetheless it warns that there is a funding dichotomy during the transitional phase from old technology to new, when the investment needs to be made. It said: "An airline investing in a new airborne equipage will not see any [cost] benefit before the air navigation service providers have made the corresponding investment. On the other hand, for an ANSP, the business case may not become positive until a significant number of aircraft are equipped."

Yet, said the report, the operators face the need to make about 64% of the total €30 billion investment in updating their airborne equipment, and the ANSPs, airports and military ground installations will share the cost of the remaining 36%.

The investment breakdown for the operators is about €11.5 billion for the airlines' re-equipment, €3.4 billion for business aviation and €6.4 billion for the military fleets. On the ground, ANSPs face a bill of about €5 billion, and the remaining €3 billion will have to be spent by the military for their ground infrastructure, and the airports.

Once the system is up and running, said the report, the benefits will accrue to all parties except the military, for which the investment brings no return. It is unrealistic to require some stakeholders to invest "whilst this will remain a net cost for them", it said, adding that "in this case funding should be made available".

If funding or incentives are not made available, the report said: "Operators are inclined to adopt a reactive rather than a proactive stance (last mover advantage). Therefore, funds made available by the EU for supporting deployment would be used to govern a synchronised and rapid adoption of the SESAR technology by the operators."