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Pe
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Pe
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ANS Productivity, cost-effectivenessANS Productivity, cost-effectiveness
NAS Performance Workshop
5 September 2007
Xavier FRON
Performance Review Unit
EUROCONTROL
2
Performance Review Commissionwww.eurocontrol.int/prc
A cost-effective system?
13.8 M km²851 km/flight
10.8 M km²826 km/flight
US-Europe comparisons
US$ ~ 1000US$ 486Costs per IFR flight
9M18.3MIFR flights
€7 100MUS$ 8 900MGate-to-gate ANS costs (without MET)
European Area (2005)US ATO (FY2005)
3
Performance Review Commissionwww.eurocontrol.int/prc
ANSP benchmarking
• Analytic benchmarking
– What are the respective performance indicators?
– Facts, no judgement
– Detailed analytic benchmarking of European ANSPsin ACE reports
– Outcome benchmarking (black box + information disclosure: ACE)
– Insider benchmarking (white box, ANSPs, CANSO)
• Normative benchmarking
– What are the actual and expected performance given specific circumstances(Cost of living, complexity, traffic variability, etc)
– Econometric techniques tried, not conclusive so far NERA report available
4
Performance Review Commissionwww.eurocontrol.int/prc
Framework for cost-effectiveness analysis
Flight-hours controlled
ATCO-hours on operational duty
ATCOs in operations
Employment costs of operational ATCOs
Total operating costs(staff and non-staff)
Cost-effectiveness
Productivity and factor cost
• ATCO-hour productivity
• Working hours per ATCO
• Employment cost per ATCO
• Support cost ratio
• Operating costs per flight-hour controlled
• Employment cost per ATCO-hour
Ratios higher than 1: better performance in US Ratios are multiplicative: 1.62=1.29 x 0.94 x 1.34
1.29
1.32
0.71
1.34
0.94 1.62
In the US:• Higher hourly productivity (1.29)• Higher employment costscompensated by more hours (0.94)
• Lower support costs (1.34)
2001 Data
5
Performance Review Commissionwww.eurocontrol.int/prc
Productivity
Raising average productivity
to 3rd best: +62%
0.0
0.4
0.8
1.2
1.6
MU
AC
EA
NS
Skyguid
e
AN
S C
R
NA
TS
Austr
o C
ontr
ol
DC
AC
Cypru
s
Hungaro
Contr
ol
NA
V P
ort
ugal (F
IR L
isboa)
LV
NL
NA
VIA
IR
DF
S
IAA
DH
MI
DS
NA
PA
TA
AN
S S
weden
LG
S
Fin
avia
Belg
ocontr
ol
EN
AV
Avin
or
Aena
NA
TA
Alb
ania
Cro
atia C
ontr
ol
LP
S
Slo
venia
Contr
ol
MA
TS
AT
SA
Bulg
aria
Oro
Navig
acija
RO
MA
TS
A
FY
RO
M C
AA
UkS
AT
SE
Mold
AT
SA
HC
AA
Co
mp
osite
flig
ht-
ho
ur
pe
r A
TC
O-h
ou
r o
n d
uty
ATCO-hour productivity 2005 ATCO-hour productivity 2002
Staff costs for Staff costs for
ATCOsATCOs in OPSin OPS
Composite Composite flightflight--hourshours
ATCO hours ATCO hours
on dutyon duty
ATCOsATCOs in OPSin OPS
ATM/CNS ATM/CNS
provision costsprovision costs
Average hours Average hours on dutyon duty
Employment costs Employment costs per ATCOper ATCO
Support cost ratioSupport cost ratio
ATCOATCO--hour hour productivityproductivity
Employment costs Employment costs per ATCOper ATCO--hourhour
FinancialFinancialcostcost--effectiveness effectiveness
indicatorindicator
Staff costs for Staff costs for
ATCOsATCOs in OPSin OPS
Composite Composite flightflight--hourshours
ATCO hours ATCO hours
on dutyon duty
ATCOsATCOs in OPSin OPS
ATM/CNS ATM/CNS
provision costsprovision costs
Average hours Average hours on dutyon duty
Employment costs Employment costs per ATCOper ATCO
Support cost ratioSupport cost ratio
ATCOATCO--hour hour productivityproductivity
Employment costs Employment costs per ATCOper ATCO--hourhour
FinancialFinancialcostcost--effectiveness effectiveness
indicatorindicator
29% of unit costs
6
Performance Review Commissionwww.eurocontrol.int/prc
ATCO-hour productivity
• Equivalent densities measured in the sample of ACCs
Complexity is not a differentiating factor
• Traffic variability
– Seasonal
– Weekly
– Daily
• Match of resources and traffic appears to be a key driver of ATCO productivity
40%
60%
80%
100%
120%
140%
160%
180%
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
w eek
Palma
Athinai
Barcelona
Reims
Stockholm
Maastricht
source : EUROCONTROL
variation from average w eek
Traffic and staffing
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
Sun Mon Tue Wed Thu Fri Sat
Flig
ht
0
500
1000
1500
2000
2500
AT
CO
s
Flight On_Duty
0
1
2
3
Bar
celo
na
Kar
lsru
he
Londo
n
Maa
stric
ht
Rei
ms
Rom
aA
lbuq
uerq
ue
Cle
vela
nd
Indi
anap
olis
flight-km/
(sq km××××FL)
Density
Adjusted density
Average adjusted density for European sample
Average adjusted density for US sample
*
*
7
Performance Review Commissionwww.eurocontrol.int/prc
Sector productivity and staffing
Output(flight-hours controlled)
Sector-hours open
ATCO hours on duty
ATCOs in OPS
Average hours on duty
Ou
tput
pe
r A
TC
O
Sector productivity
Staffing per sector
ATCO-hour productivity
Flight-hours controlled
ATCO-hours on operational duty
ATCOs in operations
Employment costs of operational ATCOs
Total operating costs(staff and non-staff)
Cost-effectiveness
Productivity and factor cost
• ATCO-hour productivity
• Working hours per ATCO
• Employment cost per ATCO
• Support cost ratio
• Operating costs per flight-hour controlled
• Employment cost per ATCO-hour
Flight-hours controlled
ATCO-hours on operational duty
ATCOs in operations
Employment costs of operational ATCOs
Total operating costs(staff and non-staff)
Cost-effectiveness
Productivity and factor cost
• ATCO-hour productivity
• Working hours per ATCO
• Employment cost per ATCO
• Support cost ratio
• Operating costs per flight-hour controlled
• Employment cost per ATCO-hour
8
Performance Review Commissionwww.eurocontrol.int/prc
Sector productivity and staffing
Munchen
Wien
Rhein
Reims
Paris
Maastricht
London ACGeneva
PadovaZurich
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0Staffing per sector
Secto
r pro
ductivity
Cluster 2
Average ATCO-hour
productivity
London TCPalma
BerlinBrussels
MilanoLangen
Bremen
Dublin
Amsterdam
Manchester
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
Staffing per sector
Secto
r pro
ductivity
Cluster 1
Average ATCO-hour productivity
BrestPrahaLisboa
Ankara
Zagreb
Scottish
Shannon
Budapest
RomaBordeaux
Malmo
Kobenhavn
Stockholm
Bratislava
Madrid
MarseilleBrindisi Barcelona
Canarias
Sevilla
Istanbul
Oslo
Bucuresti
Kyiv
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
Staffing per sector
Se
cto
r p
rodu
ctivity
Cluster 3a (ACCs ≥≥≥≥ 5 sectors)
Average ATCO-hour productivity
Tallinn
Nicosia
Riga
Tampere
Stavanger
Rovaniemi
Varna Bodo
TiranaVilnius
Sofia
LjubljanaMalta
L'vivSkopje
SimferopolKharkiv
Odesa ChisinauDnipropetrovs'k
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
Staffing per sector
Secto
r p
rod
uctivity
Cluster 3b (ACCs < 5 sectors)
Average ATCO-hour productivity
9
Performance Review Commissionwww.eurocontrol.int/prc
Employment costs per ATCO-hour (2005, gate-to-gate)
0
20
40
60
80
100
120
140
160A
ena
Sky
gu
ide
MU
AC
*
NA
V P
ort
ug
al (F
IR L
isboa
)
Belg
oco
ntr
ol
Au
stro
Con
trol
DF
S
EN
AV
LV
NL
NA
TS
Fin
avia
IAA
DS
NA
NA
VIA
IR
AN
S S
we
den
Avin
or
AN
S C
R
Slo
venia
Con
trol
DC
AC
Cyp
rus
Hu
nga
roC
ontr
ol
PA
TA
Cro
atia C
on
trol
LP
S
RO
MA
TS
A
EA
NS
AT
SA
Bulg
aria
NA
TA
Alb
ania
MA
TS
FY
RO
M C
AA
LG
S
Oro
Navig
acija
DH
MI
UkS
AT
SE
Mo
ldA
TS
A
HC
AA
€ p
er
AT
CO
-ho
ur
on d
uty
(2
005
price
s)
Employment costs per ATCO-hour 2005 Employment costs per ATCO-hour 2002
Staff costs for Staff costs for
ATCOsATCOs in OPSin OPS
Composite Composite flightflight--hourshours
ATCO hours ATCO hours
on dutyon duty
ATCOsATCOs in OPSin OPS
ATM/CNS ATM/CNS
provision costsprovision costs
Average hours Average hours on dutyon duty
Employment costs Employment costs per ATCOper ATCO
Support cost ratioSupport cost ratio
ATCOATCO--hour hour productivityproductivity
Employment costs Employment costs per ATCOper ATCO--hourhour
FinancialFinancialcostcost--effectiveness effectiveness
indicatorindicator
Staff costs for Staff costs for
ATCOsATCOs in OPSin OPS
Composite Composite flightflight--hourshours
ATCO hours ATCO hours
on dutyon duty
ATCOsATCOs in OPSin OPS
ATM/CNS ATM/CNS
provision costsprovision costs
Average hours Average hours on dutyon duty
Employment costs Employment costs per ATCOper ATCO
Support cost ratioSupport cost ratio
ATCOATCO--hour hour productivityproductivity
Employment costs Employment costs per ATCOper ATCO--hourhour
FinancialFinancialcostcost--effectiveness effectiveness
indicatorindicator
10
Performance Review Commissionwww.eurocontrol.int/prc
• 71% of unit costs
Support costs
119
153157172175179180187187198
206217230241247251256261267275277295296307311312314
333348350356358
407
514
590
0
100
200
300
400
500
600
700
LV
NL
Be
lgo
con
tro
l
AT
SA
Bulg
aria
RO
MA
TS
A
FY
RO
M C
AA
EN
AV
NA
TA
Alb
ania
NA
TS
DF
S
Skygu
ide
LP
S
NA
V P
ort
uga
l (F
IR L
isb
oa
)
DS
NA
Oro
Navig
acija
Mo
ldA
TS
A
UkS
AT
SE
DH
MI
Au
str
o C
on
tro
l
AN
S C
R
DC
AC
Cyp
rus
MA
TS
Aen
a
Cro
atia C
on
tro
l
NA
VIA
IR
Slo
ven
ia C
on
tro
l
IAA
Avin
or
PP
L/P
AT
A
Fin
avia
Hun
ga
roC
on
tro
l
LG
S
HC
AA
AN
S S
we
de
n
MU
AC
*
EA
NS
€ p
er
com
po
site
flig
ht-
ho
ur
Capital-related costs per composite flight-hour
Non-staff operating costs per composite flight-hour
Non-ATCO in OPS staff costs per composite flight-hour
European system average (€281)
Non-ATCO in
OPS s taff
cos ts
44.5%
Direct (non-
s taff)
operating
cos ts
26.9%
Capital
related cos ts
28.5%
Staff costs for Staff costs for
ATCOsATCOs in OPSin OPS
Composite Composite flightflight--hourshours
ATCO hours ATCO hours
on dutyon duty
ATCOsATCOs in OPSin OPS
ATM/CNS ATM/CNS
provision costsprovision costs
Average hours Average hours on dutyon duty
Employment costs Employment costs per ATCOper ATCO
Support cost ratioSupport cost ratio
ATCOATCO--hour hour productivityproductivity
Employment costs Employment costs per ATCOper ATCO--hourhour
FinancialFinancialcostcost--effectiveness effectiveness
indicatorindicator
Staff costs for Staff costs for
ATCOsATCOs in OPSin OPS
Composite Composite flightflight--hourshours
ATCO hours ATCO hours
on dutyon duty
ATCOsATCOs in OPSin OPS
ATM/CNS ATM/CNS
provision costsprovision costs
Average hours Average hours on dutyon duty
Employment costs Employment costs per ATCOper ATCO
Support cost ratioSupport cost ratio
ATCOATCO--hour hour productivityproductivity
Employment costs Employment costs per ATCOper ATCO--hourhour
FinancialFinancialcostcost--effectiveness effectiveness
indicatorindicator
11
Performance Review Commissionwww.eurocontrol.int/prc
Cost-effectiveness target
• Cost-effectiveness: A major European ATM performance issue
• Clear break in the en-route unit cost trend since 2003
• PRC recommends the formal adoption of a cost-effectiveness target at European system level to reduce average real unit costs by 3% p.a. until 2010.
0.4
0.5
0.6
0.7
0.8
0.9
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006P
2007P
2008P
2009P
2010P
Euro
2005/ km
100
130
160
190
220
250
Cost Per Km Total Costs (1997= index 100) Traffic (1997=index 100)
All States in CRCO system source : EUROCONTROL
Average 1997-2003
PRC
proposed target
~€4 970M ~€1 550M
~€330M ~€60M
~€60M ~€2M
~€490M
EUROCONTROL
ATM/CNS
MET
Payment to
regulatory &
governmental
authorities
ATM/CNS
MET
Payment to
regulatory &
governmental
authorities
2005
Gate-to-gate ANS costs (European level)
~€7 460M
En-route ANS costs
(European level)
~€5 850M
Terminal ANS costs
(European level)
~€1 610M
ANSP Benchmarking analysis (Section 8.6)
En-route ANS costs analysis (Sections
8.2 - 8.5)
12
Performance Review Commissionwww.eurocontrol.int/prc
Cost-effectiveness improvements from future developments
20202015
20102005
2003
1995
1990
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000
Traffic (Million Km)
To
tal e
n-r
ou
te
AN
S c
os
ts (
Millio
n €
20
05
)
SESAR
long-term
target
FABs
SESAR
€0.8/km
€0.4/km
€0.6/km
Massive value can be generatedwith improved cost-effectiveness
Net Present value (Discount rate: 5%)
0
10
20
30
40
50
5 10 15 20 Years
Billio
n E
uro
1% 2% 3% 4% Efficiency
Improving economic performance� New generation ATM
� Rationalisation of service provision!
13
Performance Review Commissionwww.eurocontrol.int/prc
Improvements through rationalisation of service provision
• Rationalising support staff (35% of costs)– Opportunity for pooling resources (maintenance teams, etc)
– Costs should not grow in line with traffic
• Improving ATCO Productivity (25% of costs)– e.g. better use of resources in low traffic, at night
• Pooling investments (20% of costs)– Major opportunity for scale effects in ATM infrastructure (currently 60% of investment)
– Approximately 80% of new systems costs is non-recurring cost (software, certification)
– Joint development (SESAR)
– Joint procurement (in FABs, ANSP groupings)
– Opportunity for scale effects in CNS infrastructure
– SATNAV, joint procurement/outsourcing of CNS infrastructure
• Rationalising non-staff operating costs (18% of costs)– Number of facilities, etc
ATM/CNS provision costs (€ M) Total %
Staff costs 3 960 60.7%
Direct (non-staff) operating costs 1 194 18.3%
Depreciation costs 923 14.2%
Costs of capital 392 6.0%
Exceptional Items 52 0.8%
Total 6 520 100.0%
Exceptional
Items
0.8%
Costs of capital
6.0%
Staff costs
60.7%Direct (non-
staff) operating
costs
18.3%Depreciation
costs
14.2% 2005 data
14
Performance Review Commissionwww.eurocontrol.int/prc
Scale effects?
ATCOs
Maintenance
Development
ManagementBuildingsEquipment
0
1
2
3
4
5
10 15 20 25 30
Sectors
Annual
centre
cost
per
sector
(€m)
Annualised capital costs
Operating costs
Fixed costs to build, equip,
and operate ACCs
0
5
10
15
20
25
30
0-5 6-10 11-15 16-20 21-25 26-30 31-35 36-40 41-45 45-50 50+
Number of sectors
Nu
mb
er
of A
CC
s
European ACCs (2003 data)
US ACCs (2000 data)
47 European ACCs operating 10
sectors or fewer at maximum
configuration
����Generic study on fragmentation
�Some evidence of scale effects
�But some small ANSPs are efficient
�Other sources of inefficiencies and factors influencing economic performance
15
Performance Review Commissionwww.eurocontrol.int/prc
ATM infrastructure: How big is it? (2003 data)
Barcelona
Marseille-Aix
Prestwick
Zagreb
BucharestSofia
Prague
Shannon
CEATS
Malmö
Langen
0
50
100
150
200
250
0 5 10 15 20 25 30 35 40 45 50
Maximum sectors
€m
792 Sectors68ACCsATM
140MSSR only43Approach primary only92Approach primary plus MSSR5En-route Primary plus MSSR
63En-route primary plus Mode SSUR617VOR349NDB601DMENAV386ACC links (intra-State)160ACC links (inter-State)
2246Ground-ground voice links
1123VHF ground stations
COM
Number
Capital costs of new ACCs : Fixed costs
ATM systems
€4,340m€3,480m€9,690mTotal
€1,200m€1,100€1,000mAssociated support
€2,500m€2,100m€4,900mACCs & ATM systems
€500m€210m€3,000mSUR (en-route)
€30m€10m€230mNAV (en-route)
€110m€60m€560mCOM (outside ACC)
Total
annual
costs
Annual
operating
costs
Capital
replacement
costs
Replacement of the current system worth ~ €10B
Total annual en-route service provision costs ~ €4.4B
16
Performance Review Commissionwww.eurocontrol.int/prc
Some factors affecting performance
Lower Airspace
Cost of living
<= 200
<= 300
<= 400
<= 500
> 500 Lower Airspace
Traffic complexity score
<= 0.04
<= 0.08
<= 0.12
<= 0.16
> 0.16 Lower Airspace
Traffic variability
<= 1.15
<= 1.25
<= 1.35
<= 1.45
> 1.45
Cost of living Traffic complexity Traffic variability
Fragmentation of service provision, infrastructure,airspace, regulation, decision makingFragmentation report (2006)
Cost of living, Traffic complexity, variabilityBenchmarking report ACE 2005 (2007)
17
Performance Review Commissionwww.eurocontrol.int/prc
Complexity indicatorsS
tructu
ral effect
Density e
ffect
–
Provides a measure of the potential interactions between aircraft of different performances
Potential Speed interactions (SDIF)
Traffic mix
Provides a measure of the potential interactions based on the aircraft headings
Potential horizontal interactions (HDIF)
Flow structure
Captures the potential interactions between climbing, cruising and descending aircraft
Potential vertical interactions (VDIF)
Traffic in evolution
A measure of the potential number of interactions between aircraft in a given volume of airspace
Adjusted density Traffic density
DescriptionIndicatorComplexity Dimension
18
Performance Review Commissionwww.eurocontrol.int/prc
How are they computed?
• Interaction : simultaneous presence of 2 aircraft in a same cell of
20NMx20NMx3000ft
– Vertical interaction: aircraft in different flight phase (cruise- climb – descent)
– Horizontal interaction: aircraft with different heading (difference > 20°)
– Speed Interaction: aircraft with different speed (differences > 35 knots)
• Metrics computed at ACC and ANSP level (all airspace 85#FL#405)
– Results at ANSP level is a consolidation from results at ACC & APP level
– Oceanic airspace excluded
2 interactions2 interactions
6 interactions6 interactions
19
Performance Review Commissionwww.eurocontrol.int/prc
Breakdown of traffic complexity indicator at ANSP level (2004 data)
0 .00 0 .05 0 .10 0 .15 0 .20
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
A d jus ted dens ity
Str
uctu
ral In
de
x
Belgocontrol
NATS
Skyguide
DFS
LVNL
MUAC
ENAV
Austro Control
DSNA
ANS CR
NAVIAIR
Aena
Slovenia Control
LPSFYROM CAA
HungaroControl
ANS SwedenFINLAND CAA
Croatia Control
ROMATSA
HCAA
DCAC Cyprus
NAV Portugal (FIR Lisboa)
DHMI
ATSA Bulgaria
AVINOR
IAA
NATA Albania
LGS
EANS
Oro Navigacija
UkSATSE
MATS
MoldATSA
20
Performance Review Commissionwww.eurocontrol.int/prc
Any influence of complexity on cost-effectiveness? (1/3)
Adjusted density
0
100
200
300
400
500
600
700
800
0.0 0.1 0.1 0.2 0.2
Ec
on
om
ic c
os
t-e
ffe
cti
ve
ne
ss
Structural Complexity indicator
0.0 0.3 0.6 0.9 1.2 1.5
Aggregated complexity indicator
0.0 0.1 0.2 0.3
Adjusted density
0.0
0.3
0.6
0.9
1.2
1.5
1.8
0.0 0.1 0.1 0.2 0.2
AT
CO
-ho
ur
pro
du
cti
vit
y
Structural Complexity indicator
0.0 0.3 0.6 0.9 1.2 1.5
Aggregated complexity indicator
0.0 0.1 0.2 0.3
Cost-effectiveness vs Complexity
Productivity vs Complexity
Cost-effectiveness appears to increase with complexity
But productivity increases with complexity
21
Performance Review Commissionwww.eurocontrol.int/prc
Any influence of complexity on cost-effectiveness? (2/3)
Adjusted density
0
40
80
120
160
0.0 0.1 0.1 0.2 0.2
Em
plo
ym
en
t c
os
ts p
er
AT
CO
-ho
ur
Structural Complexity indicator
0.0 0.3 0.6 0.9 1.2 1.5
Aggregated complexity indicator
0.0 0.1 0.2 0.3
Adjusted density
0
100
200
300
400
500
0.0 0.1 0.1 0.2 0.2
Su
pp
ort
co
sts
pe
r u
nit
ou
tpu
t
Structural Complexity indicator
0.0 0.3 0.6 0.9 1.2 1.5
Aggregated complexity indicator
0.0 0.1 0.2 0.3
Employment costs vs Complexity
Support costs vs Complexity
Employment costs are correlated with density, complexity
Weak link between complexity and support costs
22
Performance Review Commissionwww.eurocontrol.int/prc
Any influence of complexity on cost-effectiveness? (3/3)
• Cost-effectiveness is significantly influenced by cost of living– Cost of living influences employment costs (60% of costs)
– but some high cost of living ANSPs are cost-efficient (Nordic States)
• Link with complexity is apparent: Complexity is correlated with cost of living, and cost of living with cost-effectiveness
• Mixed influence of complexity– Higher density enables better use of human resources, infrastructure
– Higher complexity increases work load, but also productivity…
• Econometrics: failed to determine statistically significant influence of complexity on Costs
• Empirical analysis of influence of Complexity, Cost of living, …
Adjusted density
0
10
20
30
40
0.0 0.1 0.1 0.2 0.2
GD
P p
er
ca
pit
a (€
'00
0)
Structural Complexity indicator
0.0 0.3 0.6 0.9 1.2 1.5
Aggregated complexity indicator
0.0 0.1 0.2 0.3
GDP per capita vs Complexity
23
Performance Review Commissionwww.eurocontrol.int/prc
0.4
0.5
0.6
0.7
0.8
0.91997
1998
1999
2000
2001
2002
2003
2004
2005
2006P
2007P
2008P
2009P
2010P
Euro
2005/ km
100
130
160
190
220
250
Cost Per Km Total Costs (1997= index 100) Traf f ic (1997=index 100)
All States in CRCO system source : EUROCONTROL
Average 1997-2003
PRC
proposed target
ANS/ATM Cost-effectiveness Performance
Performance to date• European ANS costs ~ $10.5 billion
• Clear break in unit cost trend since 2003 (Benchmarking has a role!)
• Similar ANS costs in US, but two times more traffic!
Analysis of performance• Econometrics: unsuccessful so far
• Empirical analysis of influence of Complexity, Cost of living
Targets• Cost-effectiveness target
recommended (reduce average real unit costs by 3% p.a. until 2010) but not adopted yet
• SESAR targets in line with PRC’s, more aggressive beyond 2010 (5%)
Performance improvements• Rationalisation of service provision• New generation: one step further!
OUTLOOK
TODAY
1990
1995
2003
20052010
2020
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
0 2 000 4 000 6 000 8 000 10 000 12 000 14 000
Traffic (Million Km)
To
tal en
-ro
ute
AN
S c
osts
(M
illio
n €
2005)
SESAR
long-term
target
Medium-term
target
€0.8/km
€0.4/km
€0.6/km
24
Performance Review Commissionwww.eurocontrol.int/prc
ANS/ATM economic performance
Economic cost• Total economic cost =
– Direct cost of the service
– + Indirect costs (delays, non-optimum flight profiles, externalities e.g. environmental impact)
• In Europe, user pays both, wants minimum total cost
• In the US, disconnect between ATM costs (federal budget) and what the user pays makes the link more remote
Analysis of performance• Poor quality of service may compromise
benefits from excessive cost savings
0
100
200
300
400
500
600
700
800
900
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
20
02
20
05
LVNL Belgo
control
Skyguide ENAV DFS NATS Austro
Control
ANS CR DSNA MUAC
€ p
er
co
mp
os
ite f
ligh
t-h
ou
r
ATM/CNS provision costs per composite flight-hour Delay costs per composite flight-hour
ANS Provision
4,5b€
Flight ineff.
1b€
Delays0,7b€
~6,2b€
3,3b€
~9.5b€
ANS
Provision
7b€
Flight
inefficiency1,5b€
Delays1b€
Fragmentation (Consolidation)Low productivity
Strategic design of airspaceTactical use of airspace (FUA)
Capacity planning
ANS Provision
4,5b€
Flight ineff.
1b€
Delays0,7b€
~6,2b€
ANS Provision
4,5b€
Flight ineff.
1b€
Delays0,7b€
~6,2b€
3,3b€3,3b€
~9.5b€
ANS
Provision
7b€
Flight
inefficiency1,5b€
Delays1b€
Fragmentation (Consolidation)Low productivity
Strategic design of airspaceTactical use of airspace (FUA)
Capacity planning
Static economic
optimum
Dynamic
economic
optimum
Delay costs
Cost of capacity
Total economic
costs
Capacity/demand ratio
Yearl
y c
osts
25
Performance Review Commissionwww.eurocontrol.int/prc
Framework for analysis of ATM performance
ENVIRONMENT SECURITYECONOMYSAFETYPolitical &
Socio-Economic
perspective
Airspace
users
perspective
Service
providerperspective
Safety
Traffic (volume, complexity)
Network effects & fragmentation
Runwayincursions
Safety culture (reporting, etc.)
Airspace events
Safety management
Weather
To be developed
Technical innovations
Quality of
service
Flexibility
Predictability
Strategic costs (buffer)
Costs due to sub-optimal operations
Efficiency
Airport/TMA capacity
ATFM/ Networkcapacity
Capacity management
En-route capacity
Use of
airspace
Cost-effectiveness
ATCO productivity
Employment costs
Support costs
Cost management
MET costs
Eurocontrolcosts
ATM/CNSProvision cost
Reg. costs
ANS provision costs
Ambient
performance affecting
factors
Gaseous
emissions
Flight
efficiency
Grounddelay
Political/ Environ. Regulations/ restrictions
26
Performance Review Commissionwww.eurocontrol.int/prc
ANS Performance status (2006)
Very slow improvement
EuropeanCo-ordination
Single Europ. SkyFunctional
airspace blocks
√
None
Flight efficiency
√√-Data flow
Performance indicators
Progressive improvement
Strong improvement
Target nearly met
No conclusive information
Achieved performance
Individual plansBenchmarking
Co-operativecapacity
management
Safety Action Plan
Performance management
Cost recoveryBenchmarkingIncentives (UK)
MinimalIncentives in UK only
Well advanced,not fully applied
Regulation
Development agreed
√-Performance
targets
Cost-effectiveness
DelaysSafetyPerformanceProcesses
0.4
0.5
0.6
0.7
0.8
0.9
1997
1998
1999
2000
2001
2002
2003
2004
20
05P
20
06P
20
07P
2008
T
2009
P
Eu
ro 2
004/
km
100
130
160
190
220
250
Cost Per Km Total Costs (1997= index 100) Traff ic (1997=index 100)
All States in CRCO system source : EUROCONTROL
-14%
PC upper bound
1.31.22.9 4.1 5.5 3.6 3.1 1.8 1.2
-1
0
1
2
3
4
5
6
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
min
ute
s p
er
flig
ht
En-route ATFM delay per flight (summer)
Airport ATFM delay per flight (summer)
En route target
En route
optimum
Target: 1.4min/flight
Actual: 1.3min/flight
Summer (May-October)
source : EUROCONTROL
0,7 0,9 0,8 0,9 0,8 0,7 0,6 0,7 0,9
0
10
20
30
40
50
60
2004 2005 2006 2007 2008 2009 2010
rou
te e
xte
ns
ion
(k
m/f
lig
ht)
Direct en route
TMA Interface
Proposed target
- 2 km per f light
27
Performance Review Commissionwww.eurocontrol.int/prc
A quantum jump in ATM performance
Short-term improvements– Safety, flight-efficiency, productivity, etc
A quantum jump in performance in medium term
– Safety: x5 for traffic x2, x10 for traffic x3 => SESAR, NEXGEN– Capacity: x2 (15 years), x3 (30 years)
– Linked with safety for en-route
– Linked with traffic spread for airports
– Cost-effectiveness: >2
At least one solution known: US!
Traffic density and complexity ≥ Europe
Capacity and cost-effectiveness targets met
Equivalent aviation safety levels
Driving ATM performance
Operational and technical improvements– SESAR, NEXGEN
Service provision– Organisation, Managerial, Governance, Human resources
Regulation– Single European Sky, …
Co-operation & co-ordination– EUROCONTROL
– Improved ATM/Airlines/airports interactions
28
Performance Review Commissionwww.eurocontrol.int/prc
Conclusions
• High stakes in ANS performance
• Safety
• Economic impact (billions of € per annum)
• Environmental impact
• Experience with performance-oriented approach in Europe since 1998
• Prerequisites for efficient performance-oriented strategies• Reliable information flow
• Target setting, performance monitoring
• Adequate regulation
• Performance management processes
• Independent performance review (with permanent support)
• Strong governance of monopoly service providers
• Accountability for performance
• ANS “Performance” is the “end product” of a complex interrelated system,
involving a large number of airspace users, airports and ATM units
• Factors driving performance need to be better understood and measured