Malta Performance Plan for Air Navigation Services

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1 Malta Performance Plan for Air Navigation Services Reference Period 1 1 st January st December 2014 National Supervisory Authority Civil Aviation Directorate Transport Malta

2 Document Approval The National Performance Plan for Reference Period 1 has been prepared by the Air Navigation Services Unit within the Civil Aviation Directorate (Transport Malta) in accordance with the Single European Sky Performance Scheme Regulation (EC) No. 691/2010. The Minister for Infrastructure, Transport and Communications, as the Minister responsible for civil aviation, agrees to the adoption of the Malta National Performance Plan for Air Navigation Services. Version 1.0 Page 1 of 52

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4 Executive Summary Introduction This document is Malta s National Performance Plan (NPP) for Air Navigation Services (ANS). The NPP covers the First Reference Period (RP1) of the Single European Sky (SES) Performance Scheme which runs from 1 st January 2012 to 31 st December Context of the NPP The NPP has been developed as part of Malta s commitment to the improvement of safety and economic performance of Air Traffic Management (ATM) in general. The NPP is a result of the full collaboration of the CAD with the Air Navigation Service Providers (ANSPs) that have been certified. Malta recognises that RP1 starts the transition from a full cost recovery scenario to an incentive-based regulation of costs, capacity and quality of service. The NPP addresses the requirements of the agreed Performance Scheme and the EU-wide targets. In setting targets and incentives in Key Performance Areas (KPAs), Malta strives to achieve the right level of challenge while ensuring safe operations and avoiding undue risks to the provision of services. Although in Malta there is no provision of services by the military, Malta is committed to cooperate with other military authorities in providing services to military aircraft for better management of the airspace over its Territory and the airspace within the Malta Flight Information Region (FIR). There is no military ANSP providing services in the Malta FIR. However, although on a limited scale and to the extent possible, Malta is committed to implementing the Flexible Use of Airspace (FUA) concept. Malta is cooperating with other EU Member States (Cyprus, Greece and Italy) in establishing a Functional Airspace Block (FAB) which is called BLUE MED. However, the four States have decided that, since BLUE MED is not yet formed, each State should submit its own NPP with a view to developing a FAB Performance Plan for RP2. The NPP has been developed in the context of the present economic conditions and the unrest in the Mediterranean region resulting from the political situations in Egypt, Tunisia and, in particular, the civil war in Libya. They reflect the recent downturn in civil traffic operating in the Malta FIR which is predominantly a north/south flow. Although this may be a temporary situation, one cannot predict with a degree of certainty how long it will take to be resolved. The No Fly Zone over Libyan Airspace sanctioned by the United Nations Security Council (UNSC) could remain in force for a long time. It is estimated that the recovery to normal traffic levels will require considerable effort and time. Version 1.0 Page 3 of 52

5 Targets and incentives The NPP sets out Malta s performance targets for en-route capacity and cost efficiency. It also demonstrates their contribution and consistency with the EU-wide performance targets that were published in the Official Journal of the European Union on 23 rd February 2011 (2011/121/EU). The NPP allocates accountability for meeting the performance targets between Malta Air Traffic Services Ltd. (MATS), the Meteorological Office (MET) which forms part of Malta International Airport plc. (MIA) as the aerodrome operator and the CAD as the National Supervisory Authority (NSA). In developing the NPP and, in particular these targets, the CAD has considered the interests of users in relation to the range, availability, continuity, cost and quality of services. The CAD has taken into account the different elements of the total economic en-route costs including the costs of capacity provision and ATFM delays and has also consulted users. The CAD has also considered the fact that financial incentives will encourage efforts to improve performance. When setting these targets, the CAD has taken into account historical and forecast traffic data as well as the total costs of service provision. Performance Indicators The Performance Scheme does not require any national targets for safety or the environment during RP1 although an EU-wide target has been set for environment. However, safety and environment indicators will be monitored by Malta and the European Commission respectively. Implementation of the NPP during RP1 The CAD, as the NSA, will monitor the performance of MATS and MET against the set targets on a regular basis with a view to submitting an annual report to the European Commission. Preparation for RP2 Since the BLUE MED FAB will be established by the end of 2014, Malta will be collaborating with its BLUE MED partners in producing a FAB Performance Plan for RP2. Consultation In developing the NPP, the CAD has consulted with all interested stakeholders. The draft NPP was circulated for comments by stakeholders. Details of the stakeholder consultation process and the comments received from stakeholders are shown in Annex D. Version 1.0 Page 4 of 52

6 Contents Document Approval... 1 Executive Summary Introduction The Situation Purpose and scope of the NPP The current economic state of affairs Overall assumptions for RP GDP and inflation data Traffic forecast Malta s approach to safety Institutional context for ANS provision Strategic context of the NPP Stakeholder consultation National Performance Targets and Alert Thresholds Performance Targets and Alert Thresholds Introduction Safety Capacity Cost-efficiency Environment The safety KPI The capacity KPI The cost-efficiency KPI Determined en-route costs per year Determined en-route ANS costs in real terms Real en-route determined unit rate Terminal ANS costs En-route service units per year Return on equity Capital expenditure Investments and projects The environment KPI Alert Thresholds for RP Consistency with EU-wide targets Safety Effectiveness of safety management Application of the severity classification scheme Reporting of Just Culture Capacity Cost-efficiency Environment Interrelations and trade-offs Carry-overs from previous years Parameters for risk sharing and incentives 23 Version 1.0 Page 5 of 52

7 3. Contribution of the Accountable Entities Accountable entities Malta Air Traffic Services Ltd. (MATS) Share in the national targets and individual performance targets Safety Capacity Environment Cost-efficiency Incentive mechanisms to be applied The Meteorological Office (MET) Share in the national targets and individual performance targets Cost-efficiency Incentive mechanisms to be applied The Civil Aviation Directorate (CAD) Share in the national targets and individual performance targets Safety Capacity Environment Cost-efficiency Incentive mechanisms to be applied Civil-military dimension of the NPP FUA Level FUA Level FUA Level Analysis of sensitivity and comparison with previous performance plans Sensitivity to external assumptions Comparison with previous performance plans Implementation of the NPP. 35 Annex A - Reporting Tables.. 37 Annex B Extracts from ANSPs Business Plan Annex C Extracts from State Safety Programme 49 Annex D Public Consultation Material D.1 Stakeholder consultation of the first draft NPP D.2 Stakeholder consultation meeting and approval process 52 Version 1.0 Page 6 of 52

8 List of Tables Table 1 - Accountable entities for National Performance Targets in RP Table 2 - Traffic volumes in the Malta FIR 10 Table 3 - Total service units between January and the end of April Table 4 - STATFOR data of total service units.. 12 Table 5 GDP and inflation data Table 6 - Accidents and serious incidents in the Malta FIR Table 7 - Performance Targets for the safety KPA during RP Table 8 - Performance Targets for the capacity KPA during RP Table 9 - Performance Targets for the cost-efficiency KPA during RP Table 10 - Performance Targets for the environment KPA during RP Table 11 - Determined en-route ANS costs in nominal terms by nature.. 18 Table 12 - Determined en-route ANS costs in real terms 18 Table 13 Real en-route determined unit rate.. 19 Table 14 Number of commercial air transport movements in Table 15 Planned expenditure by MATS between 2010 and Table 16 - Alert Thresholds for RP1 21 Table 17 Carry-overs from the years before RP1 23 Table 18 Delay values between 2008 and Table 19 - Determined en-route ANS costs for MATS by nature Table 20 - Determined en-route ANS costs for MATS by service Table 21 - Determined en-route ANS costs for MET by nature.. 27 Table 22 - Determined en-route ANS costs for MET by service Table 23 - Determined en-route ANS costs for the NSA by nature Table 24 - Determined en-route ANS costs for the NSA by service.. 29 List of Figures Figure 1 - Area in which MATS provides services Version 1.0 Page 7 of 52

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10 1. Introduction 1.1 The situation Purpose and scope of the NPP The main purpose of the SES Performance Scheme is to promote improvements in the provision of European ANS by setting performance targets at EU level and committing EU Member States to set national or FAB targets. The Performance Scheme requires an NSA to produce a NPP which sets targets, incentives and penalties in four KPAs, namely safety, capacity, cost-efficiency and the environment. Targets are not set for all the four KPAs for RP1 but the NPP explains how the set targets might be achieved and the associated mechanisms. The Performance Review Body (PRB) has been established to monitor the development of the Performance Scheme. This document sets out Malta s NPP for ANS during RP1 ( ) and has been prepared by the Air Navigation Services Unit within the Civil Aviation Directorate (Transport Malta) in accordance with the Performance Regulation (Regulation (EC) No. 691/2010 laying down a performance scheme for air navigation services and network functions and amending Regulation (EC) No. 2006/2005 laying down common requirements for the provision of air navigation services) and guidance material for national/fab performance plans issued by the PRB in December The NPP covers the Malta Flight Information and Upper Information Regions for RP1. For RP2 ( ) it expected that a FAB Performance Plan will be developed in conjunction with the other BLUE MED States which will cover the airspace of the entire BLUE MED FAB. In accordance with the Performance Regulation, the NPP establishes targets for capacity and cost-efficiency in relation to en-route ANS. The entities which are accountable for contributing towards achieving these set targets are the following: (a) (b) (c) MATS, which has been certified for the provision of ATS, CNS and AIS and which has also been designated as the ATS provider in the Malta Flight Information Region; MET, which has been certified for the provision of meteorological services to air navigation and which has also been designated as the MET provider in the Malta Flight Information Region; and The CAD, which is a Directorate within the Authority for Transport in Malta and which is the National Supervisory Authority (NSA). Version 1.0 Page 9 of 52

11 Table 1 shows how each of the three entities are accountable for each of the two Performance Targets National Performance Target Accountable Entities Capacity in en-route Malta Air Traffic Services Ltd. (MATS) Cost-efficiency of en-route ANS Malta Air Traffic Services Ltd. (MATS) The Meteorological Office (MET) The Civil Aviation Directorate (CAD) Table 1 - Accountable entities for National Performance Targets in RP1 The NPP also defines some Performance Indicators (PIs) in the four KPAs, where possible. Furthermore, the NPP gives an insight of future plans in order that ANSPs may meet the requirements of RP2 although, given the current situation in the Mediterranean basin, it is very difficult to foresee what the future scenario will be like The current economic state of affairs The current unrest in some North African States and, in particular, the civil war in Libya has severely affected the volume of traffic that normally transits through the Malta FIR both in the north/south and in the east/west flows. For the past few years, MATS has registered a constant increase in the volume of traffic in the Malta FIR. Table 2 shows the changes in traffic volumes between 2000 and , , , , Table 2 - Traffic volumes in the Malta FIR Version 1.0 Page 10 of 52

12 During 2010, the volume of en-route traffic in the Malta FIR increased by 17% and the predictions were that this trend would be maintained. With the establishment of the No Fly Zone over Libya on 31 March 2011 as a result of UNSC Resolution 1973 (2011), the status of the Libyan Territorial airspace and the Tripoli FIR has changed into a tactical airspace. Due to the declaration of this No Fly Zone, the period between January 2011 and March 2011 is not indicative of the current situation. Civil traffic has decreased by approximately 40% during April 2011 when compared to the same period last year, thus causing a sudden and significant impact in the revenue from chargeable service units (CSUs). Meanwhile, military traffic has increased substantially to the extent that Malta ACC has to operate on maximum en-route configuration for almost ten hours daily in order to offer its full support to NATO s Operation Unified Protector. Due to this increase in military traffic, MATS cost has increased. This international crisis is affecting badly the cost effectiveness of MATS. Table 3 shows data obtained from EUROCONTROL (May 2011) indicating the monthly follow-up of total service units (TSUs) between January and the end of April 2011 for the Malta Charging Zone January February March April January February March April Actual total service units for ,109 40,675 56,199 38,078 Table 3 - Total service units between January and the end of April 2011 Historical data (Table 2) demonstrates clearly that while the situation was normal, even during the recent global recession, there was positive cost-efficiency throughout and traffic increased constantly. There was also a constant increase in performance, as can be verified in the Performance Review reports of the last few years. Although the level of traffic has significantly dropped, this has not affected the TSUs in the same way due to a very strong growth in March However, there has been a decrease of the percentage CSUs compared to the TSUs. In April 2011, less than 70% of the TSUs were chargeable compared to the usual 96%. Version 1.0 Page 11 of 52

13 Table 4 shows STATFOR data (May 2011) of the TSUs for 2010 with base forecasts between 2011 and able Total service units 486, , , , ,392 % change -10% 14% 3% 3% Table 4: STATFOR data of total service units 1.2 Overall assumptions for RP1 In the development of the NPP, while both actual and forecast official data for the yearly inflation has become available, some assumptions have been necessary GDP and Inflation data GDP, in million euros and projected growth rates, and inflation data (official actual and forecast data) are shown in Table A 2010 A 2011 F 2012 F 2013 F 2014 F Nominal GDP m m 4.7% 4.5% 4.8% 4.7% Real GDP m 2.4% 2.3% 2.6% 2.8% Inflation 1.8% 2.0% 2.7% 2.1% 2.0% 2.0% Table 5 - GDP and inflation data Traffic forecast One very important assumption has been in forecasting traffic. While STATFOR data has been considered, due to the present unsure political situation in North Africa, traffic forecasts for the rest of 2011 and for RP1 are not easy to predict with a certain degree of comfort. However, in order to fulfil the obligations of the NPP, the traffic volume at present has been assumed to persist, at least, for the very near future Malta s approach to safety At present, Malta is in the process of developing its State Safety Plan. This is expected to be ready by the second quarter of The CAD continuously monitors aviation safety performance and continues to improve safety performance monitoring. Accidents and serious incidents involving aircraft operated by Maltese operators in the Malta FIR are rare events. Version 1.0 Page 12 of 52

14 Table 6 shows statistics of accidents and serious incidents involving both civil and military aircraft occurring in the Malta FIR during the past few years. Year Serious incident Accident Table 6 - Accidents and serious incidents in the Malta FIR Institutional context for ANS provision The CAD is a Directorate within the Authority for Transport in Malta which has been established as a body corporate to assume the functions of all modes of transport (land, sea and air). The relevant Act has been published with effect from the 1 st January Consequently, the present arrangements are not expected to change during the course of RP1. The CAD falls under the Ministry for Infrastructure, Transport and Communications. The CAD has been designated as the NSA and is responsible for the regulation of ANSPs. In Malta, all air traffic management services (air traffic control for en-route, approach, tower and ground as well as flight information service and alerting service) are provided by MATS. Search and Rescue services are provided by the Armed Forces of Malta. MATS is a 100% Government-owned limited liability Company set up on the 27 th March It assumed control of all air traffic and technical services on the 1 st January By agreement with ENAV (the Italian Air Traffic Services Provider), MATS also provides en-route services to all aircraft in the portion of the Rome FIR encompassed by the blue line and the Malta FIR boundary in Figure 1 which shows the area in which MATS provides services. In this airspace, which forms part of the Malta West Sector, MATS uses the same procedures and communications as those used in the Malta FIR. Version 1.0 Page 13 of 52

15 Figure 1: Area in which MATS provides services There is only one international aerodrome in Malta, Malta International Airport situated at Luqa. The aerodrome operator is Malta International Airport plc. (MIA) which was registered as a Company on the 16 th May It commenced operations on 1 st January Meteorological information for air navigation is provided by MET which forms part of MIA. MET provides meteorological information for air navigation to civil, military and general aviation at Malta International Airport. MET also issues forecasts and warnings for the Malta Flight Information Region. Malta s en-route unit rate comprises an element of cost for regulatory functions provided by the CAD, services provided by MATS and those provided by MET Strategic context of the NPP Malta is committed to the success of the SES programme, particularly those of the SES II package which are intended to improve ATM performance the Performance Scheme, Network Management and FABs. Malta is also committed to the overall improvement of European ATM. 1.3 Stakeholder consultation In developing the NPP, the CAD has consulted with all interested stakeholders. Details of the stakeholder consultation process, the list of stakeholders consulted, the comments received from stakeholders and the actions taken by the CAD following these comments are shown in Annex D. Version 1.0 Page 14 of 52

16 2. National Performance Targets and Alert Thresholds 2.1 Performance Targets and Alert Thresholds Introduction Safety National performance targets for three of the four KPAs (safety, capacity and costefficiency) have been set and these should be achieved during RP1. KPIs for environment will also be monitored during RP1. As shown in Table 1, Section 1.1.1, MATS is accountable for the capacity and costefficiency KPAs during RP1 while MET and the CAD are accountable for the costefficiency KPA only. Table 7 shows the Performance Targets for the safety KPA during RP1. KPA KPI Performance Target Safety Effectiveness of Safety Management Application of the Severity Classification Scheme Reporting of Just Culture Achieving full compliance in all study areas with Level 4 of the EUROCONTROL Safety Maturity Survey Methodology. Use of the Risk Analysis Tool for ATM occurrences of significance, based on best practices and lessons learnt. Full review of the current occurrence reporting system and investigation process. Table 7 - Performance Targets for the safety KPA during RP Capacity Table 8 shows the Performance Targets for the capacity KPA during RP1. KPA KPI Performance Target Capacity En-route ATFM delay in minutes per flight for Malta from all causes MATS does not generate delays except under unforeseen circumstances. Any delays that may be experienced are imposed by third parties. These are beyond the control of MATS. In order to cater for any possible delays that may need to be imposed due to circumstances beyond the control of MATS, a target of 0.05 minutes is being set. Table 8 - Performance Targets for the capacity KPA during RP1 Version 1.0 Page 15 of 52

17 2.1.4 Cost-efficiency Table 9 shows the Performance Targets for the cost-efficiency KPA during RP1. KPA KPI Performance Target Costefficiency National determined unit rate for en-route navigation services MATS undertakes to increase its cost efficiency by controlling its chargeable costs while at the same time continuing with its continuous investment in human and capital resources. MATS commits itself to cap its chargeable costs to a maximum of 20% increase on an annual basis. Any excesses will be financed from MATS own sources without any additional impact on the unit rate. In the case of MET, costs are expected to remain at approximately the same levels throughout RP1. The CAD is expecting a material increase in operating costs and staff costs due to employment of more staff. The CAD is expecting to move into new premises in However, not all costs are relevant to en-route. The present unit rate is very low but this is expected to increase. Malta is the cheapest in its comparator group and is far better that the -3.5% for the EU-wide cost-efficiency target. Table 9 - Performance Targets for the cost-efficiency KPA during RP Environment Table 10 shows the Performance Targets for the environment KPA during RP1. KPA KPI Performance Target Environment Horizontal en-route flight efficiency Free routeing on certain routes from 2013 onwards. Continuous climb and continuous descent procedures, as well as RNAV procedures in the Malta TMA, are planned from 2012 onwards. Table 10 - Performance Targets for the environment KPA during RP1 Version 1.0 Page 16 of 52

18 2.1.6 The safety KPIs Malta has an excellent safety record. The CAD, as Regulator, and MATS, as ANSP, insist on maintaining the present high safety standard and continuously strive to improve safety performance. The CAD continuously monitors ATM occurrences (operational and technical), as well as other occurrences which are reported by other Units within the CAD and third parties. Malta s safety policy will not be compromised at any stage even when changes are to be implemented towards increasing capacity, cost-efficiency and the environment. The safety policy already requires any change to be justified and when necessary, the relevant risk assessment has to be carried out by involving all interested parties. The CAD continuously monitors ANSPs so that safety is assured at all times. In addition, Malta already enjoys a high level of maturity in Just Culture in which front line operators are encouraged to report incidents. Those reporting will not be punished for actions, omissions or decisions taken by them that are commensurate with their experience and training. However, gross negligence, wilful violations and destructive acts are not tolerated The capacity KPI Malta ACC has sufficient capacity to meet expected demands during RP1. MATS does not generate delays except when unforeseen circumstances such as system outages that would necessitate contingency measures to be applied or due to other circumstances that are beyond the control of the service provider, like adverse weather conditions. Although aircraft operating in the Malta FIR have experienced delays, these normally originate from outside of the Malta FIR and are generated by third parties The cost-efficiency KPI The ANSP has little say over the actual amount of CSUs. However, it is in a position to exercise control over the chargeable costs. Consequently, the ANSP is committing itself to control its chargeable costs to the effect that any increases exceeding 20% over the previous year s audited expenditure will be borne by the ANSP itself and will not be reflected in the unit rate. This is not intended to imply that MATS is foreseeing such an increase in chargeable costs and any increase will be achieved without hindering the continuous efforts being made by MATS in providing a safe and efficient service at the lowest possible cost while adhering to the on-going programme of continuous investment in its human and capital assets. This cost-capping commitment is being made keeping in mind the adverse impact caused by the imposition of the No Fly Zone over Libyan airspace as a result of which no civil traffic is allowed to overfly, depart from or land in Libya and which is beyond the control of MATS. Additionally, the predominant traffic flow in the Malta FIR is on a north/south axis and only military traffic is allowed to operate in the No Fly Zone with no direct income being obtained by MATS. Version 1.0 Page 17 of 52

19 2.1.9 Determined en-route costs per year Table 11 shows the determined en-route ANS costs in nominal terms. ANS en-route costs by nature 2010 F 2010 A 2011 F 2012 F 2013 F 2014 F Staff Other operating costs Depreciation Cost of capital Exceptional items Total costs Total % n/n-1-3.8% 38.0% 0.8% -2.0% Staff % n/n-1-8.6% 28.1% 4.2% 0.3% Other op. % n/n-1 9.2% 31.4% -1.3% -0.1% Table 11 - Determined en-route ANS costs in nominal terms by nature Determined en-route ANS costs in real terms Table 12 shows the conversion of the determined en-route costs from nominal terms into real 2009 terms F 2010 A 2011 F 2012 D 2013 D 2014 D Total determined costs in nominal terms Inflation % 1.9% 2.0% 2.7% 2.1% 2.0% 2.0% Inflation index (100 in 2009) Total determined costs in real 2009 terms Table 12 - Determined en-route ANS costs in real terms Version 1.0 Page 18 of 52

20 Real en-route determined unit rate Table 13 shows the real en-route determined unit rate at 2009 prices in euros A 2010 A 2011 F 2012 D 2013 D 2014 D Total costs In real terms Total en-route service units Real en-route determined unit rate % n/n % % 34.50% -3.90% -6.50% EU-wide target Table 13 Real en-route determined unit rate Terminal ANS costs Malta has one international airport. In 2010, the number of commercial air transport movements (take-offs and landings) amounted to 32,488. Table 14 shows the number of commercial air transport movements at Malta International Airport in Scheduled and non-scheduled movements 28,936 General Aviation movements 3,552 Total 32,488 Table 14 Number of commercial air transport movements in 2010 Having less than 50,000 movements per year, Malta does not apply terminal charges and continues to apply this threshold in order to exempt its airport from the application of Article 1.5 of the Charging Regulation (EC) No. 1794/ En-route service units per year Data for en-route service units per year for 2010 with base forecasts between 2011 and 2014 is shown in Section (Table 4). Version 1.0 Page 19 of 52

21 Return on equity MATS is fully owned by Government and a 4.8% return on equity is considered to be a reasonable return on investment Capital expenditure Between 2011 and 2014, MATS plans to spend about 11 million in capital expenditure, distributed as shown in Table m 4.7m 2.6m 0.3m Table 15 Planned expenditure by MATS between 2010 and Investments and projects MATS plans to make operational and technical improvements as well as some structural changes to the premises. MATS plans to make the following investments: (a) (b) (c) (d) (e) the installation of two Mode S radars procured in 2009 but awaiting land allocation from the local planning authorities (planned for ) as part of the surveillance strategy of MATS for the short to long term; an ATM System upgrade (planned for ) to replace the more important elements of the system such as the Flight Data Processor; a new Voice Communication System for Malta ACC (planned for 2013) to replace the existing system which will cater for new developments; Procurement of a new en-route VOR Station in 2012 to replace the present VOR whose performance has started to deteriorate; and Constructing and finishing a substantial extension to the Technical Section facilities in 2011 and MET does not plan to make any further investments during RP The environment KPI Many direct routings have already been implemented between Malta and Italy and further improvements in the route network are planned. The Free Route Network programme, originally planned for 2012, has been put on hold due to the Libyan crisis. Continuous climb and continuous descent procedures, as well as RNAV procedures in the Malta TMA, are being devised with a view to improving traffic efficiency, fuel burn, noise, gaseous emissions, cockpit workload and controller workload. Version 1.0 Page 20 of 52

22 Alert Thresholds for RP1 The alert thresholds for each KPI are shown in Table 16. KPA Safety Capacity Costefficiency KPI Effectiveness of Safety Management En-route ATFM delay in minutes per flight for Malta from all causes Chargeable costs do not exceed the capped amount of 20% on previous expenditure Alert Threshold Level 3 Level 3 Level MATS will finance from internal sources any variance exceeding the capped expenditure of 20% increase of the previous year s expenditure. Table 16 - Alert Thresholds for RP1 2.2 Consistency with EU-wide targets Safety An overview of the activities that Malta plans to conduct in the separate KPAs in order that effective monitoring of performance against the established KPIs may be conducted, has been briefly mentioned in Sections 2.1.2, 2.1.3, and Effectiveness of safety management Malta will apply the EUROCONTROL Safety Maturity Survey Methodology and will achieve full compliance with Level Application of the severity classification scheme Malta will use the Risk Analysis Tool for ATM occurrences of significance Reporting of Just Culture Malta already adopts the principle of Just Culture. However, a full review of the present occurrence reporting system and investigation process will be conducted. Version 1.0 Page 21 of 52

23 2.2.2 Capacity MATS does not generate delays as a result of its practices or lack of resources. Aircraft operating in Malta may occasionally experience delays which are imposed on MATS by third parties. However, there may be instances due to weather or other causes that are beyond the control of MATS, which may necessitate the imposition of a delay. MATS will ensure that such delays are kept to the bare minimum and only if absolutely necessary Cost-efficiency The present unit rate for Malta is very low. Malta will continue to make all efforts to maintain a low unit rate but expects that this will increase slightly. As far as evaluating costs is concerned, the following need to be considered: (a) (b) (c) (d) (e) (f) costs have been kept well under control for a long period. Some increases are expected over the next few years mainly due to CAPEX, however, any increase beyond 20% on previous year s audited accounts will be financed from internal sources; various investments are already planned together with restructuring; MATS has three collective agreements up for negotiation, with the ATCOs and Other Grades agreements expiring in December 2012 whilst that of the Technical Grades expires in 2013; traffic volumes for the months of March 2011 and April 2011 are proving to be uncertain with an increase in exempted traffic (mainly military & humanitarian aid) and a decrease in the chargeable traffic operating on the north/south air routes until last February; a forecasted increase in the unit rate; and constraint measures such as capping of costs (up to an annual maximum of 20%) may need to be applied. Malta expects a general increase in costs due to a process of restructuring within the CAD and MATS. This process has already started Environment A lot of effort has been made to implement more direct routes both within the Malta FIR and across the Malta/Rome FIR boundary and the Malta/Tripoli FIR boundary. RNAV procedures in the Malta TMA are expected to be implemented in 2012 with a view to reducing aircraft flying time and fuel burn. Additionally, with the introduction of RNAV in the Malta TMA, continuous descent and continuous climb procedures will be adopted. These will also give additional benefits to the environment such as reduced noise and gaseous emissions. Version 1.0 Page 22 of 52

24 2.2.5 Interrelations and trade-offs Each of the KPAs covered in the NPP cannot be considered on their own because performance in one KPA will affect performance in the other KPAs. A balance should be found between the investment costs and the cost of any delays. This should be easy to achieve since Malta has a lot of spare capacity. Since the targets for the capacity and cost-efficiency KPAs are consistent with the EU-wide targets, no trade-offs are being proposed. 2.3 Carry-overs from previous years Table 17 provides an overview of carry-overs (in thousands of euros) from the years before RP1. Carry-over from To 2008 To 2009 To 2010 To 2011 To 2012 To 2013 To 2014 To 2015 To RP Total Table 17 Carry-overs from the years before RP1 2.4 Parameters for risk sharing and incentives No incentive schemes are proposed for capacity, safety and environmental impact in RP1. Similarly, no incentives are proposed in RP1 for airspace users. Incentives in relation to cost-efficiency are outlined in Section 3 under the different accountable entities. As far as risk sharing is concerned, Malta is excluding all uncontrollable costs related to the following: (a) (b) (c) (d) (e) unforeseen changes in national pension regulations and pension accounting regulations; unforeseen changes in national taxation law; unforeseen and new cost items not covered in the NPP but required by law; unforeseen changes in costs and revenues stemming from international agreements; and significant changes in interest rates and loans. Version 1.0 Page 23 of 52

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26 3. Contribution of the Accountable Entities 3.1 Accountable entities The accountable entities in relation to the NPP comprise: (a) (b) (c) Malta Air Traffic Services Ltd. (MATS), in its role of ANSP; The Meteorological Office (MET), in its role of MET service provider for air navigation; and The Civil Aviation Directorate (CAD), in its role of NSA. 3.2 Malta Air Traffic Services Ltd. (MATS) Share in the national targets and individual performance targets Safety Table 7, Section shows the safety targets that MATS will be accountable for during RP Capacity MATS is the only entity that will be accountable for meeting the capacity targets. Malta does not have any capacity problem and none is expected. Today s capacity is sufficient to meet the 2014 requirement even in a high traffic scenario. Table 18 shows historical data of actual delays for the years 2008 to Actual delay 2009 Actual delay 2010 Actual delay Reference value for Table 18 Delay values between 2008 and Environment No targets will be set on environmental impact. MATS will be the only entity that will be accountable for implementing any initiatives that will improve flight efficiency. Version 1.0 Page 25 of 52

27 Cost-efficiency Details of the determined en-route costs are provided in Tables 19 and 20. MATS (ANSP) 2010 F 2010 A 2011 F 2012 F 2013 F 2014 F Staff Other operating costs Depreciation Cost of capital Exceptional items Total costs Table 19 - Determined en-route ANS costs for MATS by nature MATS (ANSP) 2010 F 2010 A 2011 F 2012 F 2013 F 2014 F Air Traffic Management Communication Navigation Surveillance Search and rescue 0.0 Aeronautical information Meteorological services Supervision costs Other State costs Total costs Table 20 - Determined en-route ANS costs for MATS by service Incentive mechanisms to be applied No incentive mechanism will be applied to MATS during RP1 in relation to safety and environment since no targets have been set. In addition, no specific incentives have been applied to MATS in relation to capacity. The only incentive to be applied to MATS in relation to the cost-efficiency target will be that of trying to keep costs to a minimum. Version 1.0 Page 26 of 52

28 3.3 The Meteorological Office (MET) MET is only accountable for the cost-efficiency KPA. MET costs are expected to remain at approximately the same levels throughout RP1 except increases subject to national inflation Share in the national targets and individual performance targets Cost-efficiency Details of the determined en-route costs are provided in Tables 21 and 22. MET (ANSP) 2010 F 2010 A 2011 F 2012 F 2013 F 2014 F Staff Other operating costs Depreciation Cost of capital Exceptional items Total costs Table 21 - Determined en-route ANS costs for MET by nature MET (ANSP) 2009 A 2010 A 2011 F 2012 F 2013 F 2014 F Air Traffic Management Communication Navigation Surveillance Search and rescue Aeronautical information Meteorological services Supervision costs Other State costs Total costs Table 22 - Determined en-route ANS costs for MET by service Version 1.0 Page 27 of 52

29 3.3.2 Incentive mechanisms to be applied The only incentive mechanism that will be applied to MET during RP1 in relation to cost-effectiveness will be that of trying to reduce costs as much as possible. 3.4 The Civil Aviation Directorate (CAD) The CAD exercises the role of the NSA. The CAD expects a material increase in operating costs, staff costs due to employment of more staff and, of course, staff training. The CAD plans to move premises in 2012 and has the intention to recruit eight new persons in expert posts in 2011 and another four in This will involve an increase in both training and travel costs as well as employment costs. Not all costs are relevant to the NSA and to en-route Share in the national targets and individual performance targets Safety The NSA has the responsibility for the certification and supervision of air navigation services and the providers of such services. This includes the safety performance of the air navigation system including equipment, personnel and procedures involved in the provision of these services. The NSA, therefore, verifies safety of these three elements. In addition, the NSA works closely with the other Units within the CAD and applies a total systems approach to safety. The NSA produces an annual safety report outlining its activities Capacity The CAD does not have any input in respect of the provision of capacity Environment The CAD does not have any input in respect of the environment. Version 1.0 Page 28 of 52

30 Cost-efficiency Details of the determined en-route costs are provided in Tables 23 and 24. CAD (NSA) 2010 F 2010 A 2011 F 2012 F 2013 F 2014 F Staff Other operating costs Depreciation Cost of capital Exceptional items Total costs Table 23 - Determined en-route ANS costs for the NSA by nature CAD (NSA) 2010 F 2010 A 2011 F 2012 F 2013 F 2014 F Air Traffic Management Communication Navigation Surveillance Search and rescue Aeronautical information Meteorological services Supervision costs Other State costs Total costs Table 24 - Determined en-route ANS costs for the NSA by service Incentive mechanisms to be applied No incentive mechanism will be applied to the CAD during RP1 in relation to safety since no targets have been set. Furthermore, it does not have any responsibility for performance in capacity and environment. The only incentive mechanism to be applied to the CAD is that for the cost-efficiency target in trying to reduce costs as much as possible. Version 1.0 Page 29 of 52

31 Intentionally Blank Version 1.0 Page 30 of 52

32 4. Civil-military dimension of the NPP There is no provision of services by the military in Malta. However, Malta is committed to cooperating with other military authorities in providing services to military aircraft for the better management of the airspace over its Territory and the airspace within the Malta FIR and UIR. There is no military ANSP providing services in the Malta FIR. However, although to a limited extent and to the extent possible, Malta is committed to implementing the Flexible Use of Airspace (FUA) concept. 4.1 FUA Level 1 The CAD, MATS and the Armed Forces of Malta meet as and when required in order to address any issues that may arise from time to time. Military activities requiring airspace restriction or reservation are approved by the CAD and published in the Malta AIP or by NOTAM. The CAD, in close cooperation with MATS and the Armed Forces of Malta, also accommodates requests for temporary activation of airspace restriction or reservation of those areas that are published in the Malta AIP. 4.2 FUA Level 2 An airspace management cell has been set up between the CAD, MATS and the Armed Forces of Malta. The members of this cell meet at regular intervals in order to address any issues that may arise. Excellent cooperation and coordination exist between the members of the cell. 4.3 FUA Level 3 An airspace management cell has been set up between the CAD, MATS and the Armed Forces of Malta. The members of this cell meet at regular intervals in order to address any issues that may arise. Excellent cooperation and coordination exist between the members of the cell. There are no controlling military units in Malta. However, arrangements are in place with foreign civil and military authorities to ensure that effective coordination takes place so that adequate notification to airspace users is promulgated. Release of airspace reservations is done either by cancellation of NOTAM or by NOTAM expiry. Version 1.0 Page 31 of 52

33 Intentionally Blank Version 1.0 Page 32 of 52

34 5. Analysis of sensitivity and comparison with previous performance plans 5.1 Sensitivity to external assumptions The air navigation system in Malta has always had spare capacity. Efforts have been made to attract more traffic into the system and these have been successful to the extent that traffic has continued to increase at a steady rate during the past years. 5.2 Comparison with previous performance plans There are no previous performance plans with which a comparison may be made. Version 1.0 Page 33 of 52

35 Intentionally Blank Version 1.0 Page 34 of 52

36 6. Implementation of the NPP The NPP has been developed by the CAD with appropriate input from other stakeholders. During RP1, the CAD will continue to monitor constantly ANSPs performance against the set targets and performance indicators. By means of continuous on-going compliance assessments, the CAD will monitor the ANSPs Safety Management System and will ensure that their Business Plans are reviewed on an annual basis. The CAD will also periodically analyse the KPIs to assess progress against the set targets and any reduction in performance that is identified, will be discussed with the appropriate stakeholders with a view to agreeing on the necessary corrective action to be taken. The CAD will ensure that any necessary corrective action has been properly addressed and within the timeframe agreed between the CAD and the ANSP. Version 1.0 Page 35 of 52

37 Intentionally Blank Version 1.0 Page 36 of 52

38 National Performance Plan for Reference Period 1 Malta Annex A Reporting Tables Version 1.0 Page 37 of 52

39 Version 1.0 Page 38 of 52

40 Version 1.0 Page 39 of 52

41 Version 1.0 Page 40 of 52

42 Version 1.0 Page 41 of 52

43 Version 1.0 Page 42 of 52

44 Version 1.0 Page 43 of 52

45 Version 1.0 Page 44 of 52

46 Version 1.0 Page 45 of 52

47 Intentionally Blank Version 1.0 Page 46 of 52

48 Annex B Extracts from ANSPs Business Plan The CAD will be reviewing revised Business Plans for both MATS and MET in connection with the on-going compliance audits that will be held in 2011 and The CAD will be requesting both entities for their revised Business Plans later on in Version 1.0 Page 47 of 52

49 Intentionally Blank Version 1.0 Page 48 of 52

50 Annex C Extracts from State Safety Programme At present, Malta is in the process of developing its State Safety Plan. This is expected to be ready by the second quarter of Version 1.0 Page 49 of 52

51 Intentionally Blank Version 1.0 Page 50 of 52

52 Annex D Public Consultation Material D.1 Stakeholder consultation of the first draft NPP During the course of the preparation of the first draft of the NPP, a meeting was held in Malta on the 29 th March 2011 with the Chairman of the Performance Review Body. During this meeting, the present situation in the Mediterranean and its effects on traffic transiting through the Malta FIR/UIR were highlighted. The first draft of the NPP was issued for consultation on the 9 th May 2011 and the consultation period ended on the 31 st May The draft NPP was distributed by to the entities listed below in alphabetical order. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) (t) (u) (v) Air Malta plc.; Association of European Airlines (AEA); Carre Aviation Ltd.; Comlux Malta Ltd.; Eurojet Ltd.; European Business Aviation Association (EBAA); European Low Fares Airline Association (ELFAA); Harbour Air (Malta) Ltd.; International Air Carrier Association (IACA); International Air Transport Association (IATA); International Aircraft Owners and Pilots Association (AOPA); Malta Air Traffic Services Ltd. (MATS); Malta International Airport plc. (MIA); Mediterranean Aviation Co. Ltd.; Orion Malta Ltd.; Privajet Ltd.; The European Regions Airline Association (ERAA); The Meteorological Office (MET); The National Supervisory Authority of Cyprus; The National Supervisory Authority of Greece; The National Supervisory Authority of Italy; and The Performance Review Unit (PRU) Support Office (EUROCONTROL). The following comments were received during the consultation process: (a) MATS requested a minor change by the addition of some text to Section 2.1.4; (b) MET commented favourably on the parts related to the provision of MET services; (c) The PRU Support Office commented that, although Malta does not have any capacity problems and any delays imposed on aircraft are beyond the control of MATS, some consideration of any possible delays from all causes should be included. Furthermore, the PRU Support Office also commented that the NPP should be supplemented by the insertion of the tables related to costs; (d) IATA s comments were similar to those of the PRU. IATA remarked that the draft NPP lacked certain details, in particular, certain tables, the absence of which made it difficult for IATA to accept the draft NPP; and Version 1.0 Page 51 of 52

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