ATS Cost-Efficiency Benchmarking and Regulation

Transcription

1 ATS Cost-Efficiency Benchmarking and Regulation Kolloquium Flugführung Braunschweig 12 November 2013 Xavier FRON EUROCONTROL

2 Topics Performance-oriented approach Focus on cost-efficiency Performance review SES Performance Scheme Conclusions 2

3 Orders of magnitude (Europe) Air Transport 200 B ANS 8 B Airports GA ~ 50 B MIL ATC Orders of magnitude for illustrative purposes only 3

4 What are the main ANS performance issues? Safety issues? No good risk indicators so far Environmental impact ANS Carbon neutrality or improvement? Cost-efficiency (800 /flight) Labour intensive industry (63% of costs) 4 KPAs Safety Environment Cost-efficiency Capacity Low average ATCO productivity Fragmented Service provision & infrastructure ANSP Monopoly, full cost recovery until Growth in global Gross Domestic Product (GDP) and Revenue Passenger Kilometres (RPK) 9 Highly volatile air traffic demand and often rigid and expensive capacity Can result in both high charges and delay costs Trade-offs % change over year (RPKs) World GDP (right scale) sources: GDP: data and forecasts - EIU, RPK: data ICAO, RPK: estimate and forecasts IATA December 2010 Global RPKs (left scale) % change over year (GDP) 4

5 Performance-oriented approach in ANS ECAC institutional strategy (1994) Common Performance strategy (1997) Focus on outcome, not only means (e.g. technology) Independent PRC (1998) Light-handed regulation: objective information, no enforcement SES II (2009) Costs have grown slower than traffic in favourable growth conditions Performance scheme Enforceable performance targets (EU, national/fab levels), incentives Performance Review Body advising the EC Implementation (means) also regulated Network manager, FABs, SESAR 5

6 Topics Performance-oriented approach Performance review PRR, ACE, US-Europe benchmarking SES Performance Scheme Conclusions 6

7 Performance Review reports Safety Total commercial air transport (CAT) accidents and accidents with ANS contribution (fixed wing, weight > 2250Kg MTOW) Source: EASA Number of accidents Accidents with ANS contribution Environment (P) En-route ATFM delay/ flight (min.) Capacity Average en-route ATFM delay per flight ATC Capacity & Staffing ATC Other (strike, equipment, etc.) WEATHER OTHER (Special event, military, etc.) IFR Traffic source: Network Manager Cost-efficiency Traffic index (base: 1997) 7

8 PRC ACE benchmarking analysis ACE Benchmarking Reports Yearly ANSP cost-effectiveness benchmarking Independent and impartial analysis Essentially factual analysis Introduces a form of yardstick competition ACE reports are targeted to: Users and providers ACE 2011 Gate-to-gate ANS costs (European level) ~ 8 877M En-route ANS costs (European level) ~ 6 998M ATM/CNS Terminal ANS costs (European level) ~ 1 879M ATM/CNS ~ 6 066M ~ 1 773M Employers and employees Regulators and regulated Policy makers, others stakeholders Academia for empirical economic research MET ~ 342M Payment to regulatory & governmental authorities ~ 134M MET ~ 82M Payment to regulatory & governmental authorities ~ 24M EUROCONTROL ~ 456M 8

9 Performance framework for cost-effectiveness ATCOs employment costs per unit of output 127 Composite flight-hours 18.5 M ATCO in OPS hours on duty 23.3 M ATCO-hour Productivity 0.80 ATCO employment costs per ATCO-hour 101 Financial cost-effectiveness indicator 423 Year 2011 data Employment costs for ATCOs in OPS M Support costs per Support costs Support cost ratio unit of output M ATM/CNS provision costs M EUROCONTROL/PRU Productivity is measured both at ANSP and at ACC levels. Reflected in ICAO Manual on ANS Economics (Doc 9161) 9

10 Financial cost-effectiveness (2011) Belgocontrol Skyguide LVNL UkSATSE LPS Slovenia Control DFS ENAV Aena Austro Control M-NAV ANS CR DSNA HungaroControl ROMATSA NATA Albania NATS (Continental) IAA Avinor (Continental) MoldATSA NAV Portugal (Continental) NAVIAIR BULATSA LFV Croatia Control ARMATS SMATSA Oro Navigacija Finavia PANSA HCAA DHMI LGS DCAC Cyprus MATS MUAC EANS per composite flight-hour European system average: 423 Gate-to-gate ATM/CNS DFS ENAV Aena 436 DSNA 385 NATS (Continental) ATCOs employment costs per unit of output 127 Support costs per unit of output 295 Composite flight-hours 18.5 M ATCO in OPS hours on duty 23.3 M Employment costs for ATCOs in OPS M Support costs M ATM/CNS provision costs M ATCO-hour Productivity 0.80 Financial ATCO employment cost-effectiveness costs per ATCO-hour indicator Support cost ratio 3.3 EUROCONTROL/PRU Facts: no performance judgement Ratio of 4 between extremes KPI: per composite flight-hour (flight-hours + equivalent in TMA) 10

11 Productivity analysis at ACC level (2011) Flight-hours per ATCO-hour Cluster 1 Average = 0.70 Lower airspace Langen London TC Amsterdam Bremen Brussels Milano Dublin Palma Flight-hours per ATCO-hour Maastricht Cluster 2 Upper airspace Average =1.08 Praha Rhein Wien Munchen Prestwick London AC Zurich Geneva Reims Paris Padova ATCOs employment costs per unit of output 127 Support costs per unit of output 295 Composite flight-hours 18.5 M ATCO in OPS hours on duty 23.3 M Employment costs for ATCOs in OPS M Support costs M ATM/CNS provision costs M ATCO-hour Productivity 0.80 Financial ATCO employment cost-effectiveness costs per ATCO-hour indicator Support cost ratio 3.3 EUROCONTROL/PRU Flight-hours per ATCO-hour Warszawa Lisboa Ankara Zagreb Brest Athinai+Macedonia Shannon Cluster 3a (ACCs 7 sectors) Budapest Average = 1.10 Bordeaux Kobenhavn Roma Canarias Beograd Sevilla Istanbul Madrid Barcelona Malmo Bucuresti Marseille Stockholm Oslo Simferopol Kyiv Flight-hours per ATCO-hour Cluster 3b (ACCs < 7 sectors) Average = 0.85 Stavanger Bodo Tallinn Sofia Bratislava Tampere Riga Malta Vilnius Nicosia Brindisi Tirana L'viv Ljubljana Dnipropetrovs'k Yerevan Odesa Skopje Chisinau The 63 ACCs participating to the ACE analysis are split into four groups according to their operational characteristics (traffic complexity and size measured by the number of en-route sectors). 11

12 Cost-effectiveness dynamics ATCOs employment costs per unit of output 127 Composite flight-hours 18.5 M ATCO in OPS hours on duty 23.3 M ATCO-hour Productivity 0.80 ATCO employment costs per ATCO-hour 101 Financial cost-effectiveness indicator 423 Employment costs for ATCOs in OPS M trends Support costs per unit of output 295 Support costs M ATM/CNS provision costs M Support cost ratio 3.3 EUROCONTROL/PRU +2.7% +2.4% Weight 30% Decreased ATCO employment costs per composite flighthour Decrease in unit ATM/CNS provision costs Weight 70% Decreased support costs per composite flight-hour +1.0% +3.9% Increased ATCO-hour productivity Increased employment costs per ATCO-hour -0.3% -2.1% -2.8% "Support costs effect" "Traffic effect" 12

13 Exogenous factors affecting performance (1/2) The ACE Report presents in a comprehensive framework the factors that could potentially affect ANSP cost-effectiveness performance External heterogeneity Internal heterogeneity Factors outside Legal & socio- Operational direct ANSP economic conditions control conditions Factors outside ANSP control but under National and international influence of State and institutional & governance international arrangements institutions Factors under Managerial Organisational Operational direct ANSP and factors financial and technical control aspects setup ANSP performance Distinction between factors which are exogenous (top and middle boxes) and endogenous (bottom boxes) to the ANSP. Industry at system level subject to high degree of heterogeneity (i.e. diversity). 13

14 Exogenous factors affecting performance (2/2) PRU currently measures four exogenous factors outside ANSP control: Size Cost of living Traffic complexity Traffic variability Cost of living Provides quantitative and qualitative evidence that is considered in the ACE factual analysis Traffic complexity Seasonal variability Econometric analysis in progress, not mature for regulatory decision making. 14

15 US-Europe comparisons: Objective & Scope OBJECTIVES to provide a high-level comparison of performance between the US and Europe Air Navigation systems. initial focus on the development of a set of comparable performance indicators for high level comparisons between countries and world regions. SCOPE ANS service quality: Predictability & Efficiency of operations (time and fuel burn); ANS cost-efficiency: Unit ATM/CNS provision costs, support costs, ATCO productivity and employment costs; Geography: Continental US airspace vs. EUROCONTROL States; NOT in SCOPE Safety 15

16 Setting the scene (1/2) Similar conditions (surface of continental airspace, average flight length) US controls approximately 59% more (IFR) flights with some 23% fewer ATCOs and 39% fewer staff 16

17 Setting the scene (2/2) Traffic index (1999=100) US (CONUS) +25.2% vs % vs Europe +17.9% vs % vs % vs % vs Traffic growing in Europe and flat in US until 2008 Negative impact of economic crisis starting in 2008 on both sides of the Atlantic Source: EUROCONTROL/ FAA Service provision more fragmented in Europe Special Use Airspace (SUA) more scattered to meet requirements of each State 17

18 Comparison of operational service quality (1/3) Passenger perspective Departure punctuality Arrival punctuality Airline scheduling Departure delays Scheduled block time (airlines) Buffer ANS performance Efficiency and variability of operations (ANS contribution) Airborne Ground Reactionary delays Other (airline, airport, etc.) Predeparture delays (at gate) Origin airport Taxi-out inefficiency En-route inefficiency Air Traffic Management En-route ATFM delays Terminal inefficiency Management of arrival flows Airport ATFM delays Taxi-in inefficiency Airport Capacity airport scheduling achieved throughput sustainability of ops. etc. Weather En-route network Approach Arrival airport Conceptual framework similar to what is used in PRR; High level: Punctuality, airline scheduling Detailed analysis of predictability (variability) and efficiency by phase of flight (blue areas) 18

19 Comparison of operational service quality (2/3) 90% 88% 86% 84% 82% 80% 78% 76% 74% 72% 70% Source: E-CODA On-time performance compared to schedule (flights to or from the 34 main airports) Europe % 88% 86% 84% 82% 80% 78% 76% 74% 72% 70% 2003 Source: ASPM data US Similar punctuality patterns, levels (83% in 2012) Notable gap between departure and arrival punctuality in US due to differences in flow management strategies Departures (<=15min.) Arrivals (<=15min.) Trends in the duration of flight phases minutes DEPARTURE TIMES TX-OUT TIMES AIRBORNE TIMES TX-IN TIMES TOTAL EUROPE USA Punctuality mainly driven by departure delays in Europe In US, also a clear increase in average taxi times (red) and airborne times (blue) until 2008/2009; Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Data Source: CODA/ FAA 19

20 Comparison of operational service quality (3/3) Taxi-out inefficiency Origin airport En-route inefficiency Air Traffic Management Ground hold (en route) En-route network Terminal inefficiency Management of arrival flows Taxi-in inefficiency Ground hold (airport) Approach Arrival airport Comparable indicators computed on both sides Estimated benefit pool provides an overview of the inefficiencies actionable by ANS in different flight phases Totals nearly identical, different break-down corresponds to different policies (Airport slots, en-route capacity management) Ground holding (ATFM delays): Routinely used in Europe, last resort in US En-route capacity called in the US Taxi out efficiency: Higher in Europe, considerable improvements in US between 2008 and 2012 (only 4 airports are slot-controlled in US) Horizontal flight efficiency: higher in US, notable improvement in Europe (targets!) Terminal holding: Similar level in 2008 but notable improvement in US in 2012 In Europe mainly, driven by London Heathrow (LHR) holdings 20

21 Summary US-Europe comparisons Global comparisons and benchmarking useful in order to drive performance and identify best practices Consistent and systematic approach for global comparisons applied to US-Europe, presented to ICAO/ANC (Recom. 1/15) Similar OPS inefficiency pool and associated fuel burn in the US and Europe, with notable differences in the distribution by phase of flight Significant differences in unit costs driven by considerably higher ATCO productivity and lower support costs in the US Positive impact of performance review and target setting in Europe Further work is needed to better understand identified differences in ATM systems and to develop other areas (airport throughput, weather impact, etc.) Yearly updates and further development within EU-US MoC Annex 2 21

22 Topics Performance-oriented approach Performance review SES Performance Scheme Conclusions 22

23 SES Performance Scheme Performance targets Reference periods (RP1: , RP2: , etc) EU-wide targets adopted by EC Binding National/FAB Performance Plans adopted by States Including targets and incentives Process to ensure consistency between EU and local targets Ensuring targets are met Monitoring of performance Corrective actions at national/fab and EC initiative Independent Performance Review Body (PRB) assists the EC 23

24 SES Performance scheme schedule Monitoring 24

25 EU targets for RP1 Safety Capacity Monitoring only in RP1 Some national targets Performance targets from RP2 EU and national levels Environment Cost-efficiency 25

26 Risk sharing mechanism (Charging regulation) Cost risk borne by the State Target sets a revenue cap Incentive to reduce costs Margin retained by State/ANSP Traffic risk shared 30/70 beyond dead band (± 2%), within alert threshold (± 10%) Maximum exposure: ± 4.4% Not necessarily a loss Lower traffic than planned in 2012 RP1 starts with a stress test! Traffic above plans in Norway Revenue vs plan 6% 4% 2% 0% -2% -4% -6% Revenue vs traffic -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Traffic vs plan 26

27 Total economic cost Flight-efficiency ANS Total economic cost ~ 14B p.a. Total User cost (ground) 14 B En-route: 2.0 B TMA, taxi: 1.8 B ATFM Delays ER: 0.9, Apt: B 1.4 B Fully borne by users in Europe Covers 3 KPAs Environment, Capacity, Cost-Efficiency Reflects trade-offs ATCO 2.4 B Objective To minimise TEC within acceptable bounds of safety and security Support costs User Charges Other staff: 2.6 B Other oper.: 1.5 B 4.1 B 9 B p.a. CAPEX Depreciation: 1 B Capital cost: 0.5 B 1.5 B Other costs EURO: 0.5 B MET: 0.4, NSA: 0.1 B 1 B

28 Opportunities for improvement Flight-efficiency En-route: 2.0 B TMA, taxi: 1.8 B ATFM Delays ER: 0.9, Apt: 0.5 ATCO Support costs Other staff: 2.6 B Other oper.: 1.5 B CAPEX Depreciation: 1 B Capital cost: 0.5 B Other costs EURO: 0.5 B MET: 0.4, NSA: 0.1 B B 1.4 B 2.4 B 4.1 B 1.5 B 1 B Efficiency gains in individual ANSPs (e.g. cost control) Airspace improvements,(e.g. free routes) More flexible management of capacity to match demand New Technology Rationalisation of and greater cooperation in service provision and oversight The start of ANS restructuring through FABs or otherwise 28

29 Proposed targets for RP2: Safety EoSM (States/NSAs) KPI Target 2019 EoSM (Service Providers) RAT (States) RAT (Service Providers) All NSAs have achieved at least EoSM Level C in all MOs. All ANSPs have achieved EoSM Level D in all MOs. All Regulators (NSAs)/States should be reporting ATM Overall using the RAT methodology of severity classifications for almost all (i.e. 99%) reported occurrences (SMIs, RIs, and ATM specific events) and provide relevant information about the cases where ATM Overall using RAT methodology was not reported. All ANSPs should be reporting ATM Ground using the RAT methodology for severity classification for all (i.e. 100%) reported occurrences (SMIs, RIs, and ATM specific events). 29

30 Proposed targets for RP2: Environment Challenging targets (Free route airspace, PCP) Sufficient for carbon-neutrality KPI Target 2019 KEP (Average horizontal en route flight efficiency of the last filed flight plan) 4.1% KEA (Average horizontal en route flight efficiency of the actual trajectory) 2.6% 6 5 Flightefficiency 4 Delays Planned (KEP) Actual (KEA) Charges

31 Proposed targets for RP2: Capacity Proposed target unchanged (close to optimum) Mandatory incentive (max: 1% of revenue) Flightefficiency Delays Charges 31

32 Proposed targets for RP2: Cost-efficiency Based on aggregated NPPs for RP1, en-route costs were expected to remain fairly constant between 2009 and Flightefficiency M (2009 prices) Actual 2012 costs ( 6,053M) are 206M lower than in the NPPs The proposed RP2 starting point is lower than the costs arising from the EC decision which are in turn lower than the aggregated determined costs from adopted NPPs. The proposed trend is -1.5% p.a. for , and -2.5% p.a. for , equivalent to an average reduction of - 2.1% p.a. over RP Delays Charges A 2010A 2011A RP1 ( ) RP2 ( ) Actual en-route costs PRB proposal for RP2 determined costs 2014 determined costs from EC decision Aggregated determined costs from RP1 NPPs States preliminary en-route costs projections for The PRB proposes en-route costs reductions -1.5% p.a. for and -2.5% p.a. for Annual average reduction in en-route costs of -2.1% over Less demanding effort at the beginning of RP2 to allow for required changes and adjustments Draft EC decision: -2.5% p.a. over RP2 32

33 Potential added value Million ( 2009) m Δ TEC TEC (2012 performance baseline) TEC (Base traffic) Total economic cost subject to targets: ~ 8B Potential added value from targets: some 20% in TEC 33

34 Beyond ANS performance th Percentile 20th Percentile Standard Deviation Airport Airside Added Value minutes Gate to gate phase Added Value Scheduling Intensity O p t i m u m C a p a c i t y Departure time Taxi-out phase Flight time (en-route) Taxi-in phase Arrrival time Source: CODA; PRC Analysis Value of Slot Cost of Delay Total Added Value ~80% of arrival time variance originates from departure Can total economic value be extended beyond ANS? 34

35 Conclusions Performance is the bottom line Improvements from performance review (Benchmarking, etc) Light-handed regulation Major change under SES II Enforceable performance targets, incentives Significant improvements in first year of RP1 (Difficult traffic conditions) Next challenge is RP2 targets Research needed to better understand ANS performance, dependencies between ANS KPAs, with external factors and outside ANS, and drive behaviours towards improved performance R&D should be even more performance focused 35