Service providers generally agree with airlines on the need to co-operate as a way to streamline and cut air traffic costs, but progress is thwarted by debates over sovereignty
"The examples of co-operation to date are exceptions to the general rule," says Ashley Smout, chief executive of Airways New Zealand and chairman of the Civil Air Navigation Services Organisation (CANSO) annual general meeting in Brisbane, in a sombre assessment of air navigation services. "We still face many obstacles to global integration. Our industry is immature. In contrast with other infrastructure suppliers, we are one of the last bastions of the natural monopoly."
Chief executives of air traffic service (ATS) providers broadly recognise a need to co-operate with each other, with technology providers and with airlines. But actual progress is painfully slow. Even though CANSO devoted an entire conference to the need for and means of achieving co-operation, its only concrete result was to form a working group to gather views from each member on what they can reasonably expect to do over the next five years in terms of co-operation, and then to incorporate these forecasts into a "code of best practices".
The airline industry is not easing its pressure to move faster. Jeff Poole, IATA's director of user charges, reminded CANSO that such fees now represent 10% of airline costs, with half of those being airport and air navigation fees. Both keep rising, he says, even though carriers also face soaring costs for fuel and security. "Air navigation is a natural monopoly, which creates a requirement for cost-efficiency and full transparency," Poole says. Yet, he adds, current relations between airlines and ATS are "adversarial", and "airlines have no leverage except to yell louder".
Conversely, ATS providers have other motives for co-operation. Corporatised or privatised providers see co-operation as a way to cut costs and improve their bottom line. Ruediger Schwenk from Deutsche Flugsicherung (DFS Germany) stresses this as a reason to co-operate. His boss, Dieter Kaden, chairman and chief executive of DFS Germany, emphasises that the big benefit of horizontal co-operation is economies of scale.
Even those providers still run by governments and hence budget- rather than profit-driven, see the advantages of co-operating. Russ Chew, chief operating officer at the US FAA, made this point emphatically. "We're not ready to commercialise," he says, "But we're still under tremendous pressure to cut costs." The best way for an ATS agency to cover the shortfall between budget funding and fee revenue on the one hand, and rising costs on the other, Chew says, is to co-operate with other providers.
Global pressure
Europe is pushing ATS towards co-operation and mandatory interoperability with the recent enactment of the European Union single sky law. Elsewhere, the demand is not as acute yet, but the pressure for cost-efficient, seamless ATS is inexorable and global.
Providers are fully aware of this, as well as the shortcomings of current systems that typically stop at national borders. Bernie Smith, chief executive of Air Services Australia, cites the results of an assessment in Australasia, adjoining parts of South-East Asia, and broad reaches of the Indian and Pacific Oceans. "We have too much equipment in our region," Smith says. "There is a lack of a consistent approach. Most problems occur at the boundaries of flight information regions because of inconsistencies, incompatible equipment and so on."
Providers may not accept all IATA's proposed reforms, but there is little quarrel over the benefits of regionalising airspace; standardising equipment, training and procedures; and avoiding duplication.
The hurdle between recognising problems and solving them, however, is essentially local and, depending on one's point of view, either legal or political. Francis Schubert, corporate secretary for Skyguide Switzerland, shared with CANSO delegates his observations on the nature of these obstacles. The problem, he says, starts with differing interpretations of Chicago Convention article 28, which says: "Each contracting state undertakes...to provide, in its territory, airport, radio services, meteorological services and other air navigation facilities to facilitate international air navigation...[These] provisions...do not prohibit contracting states from delegating some of the functions for which they are responsible, [but] the responsibility for ensuring that all the provisions...are fully complied with rests with states." Some claim this places ATS responsibility on each nation individually, and cross-border co-operation could even be a treaty violation. Non-Anglo Europeans especially take this view, says Schubert.
He cites a litany of local laws that reflect this philosophy: a legal monopoly for the local ATS provider; buy-national rules on equipment procurement; refusal to recognise foreign controllers; and military or security concerns.
Much of this local resistance, according to Schubert, is reminiscent of the objections raised 25 years ago to the corporatisation of ATS. Ultimately, Schubert says, these are political issues, and cross-border ATS co-operation will advance only so far as practical and operational concerns prevail over sovereignty claims.
DAVID KNIBB BRISBANE
Source: Airline Business