ATM talking points


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Helios publication (February 2012)
Eight of our most senior consultants share their views on hot topics affecting ANSPs.
Authors: Nick McFarlane, Steve Leighton, Mike Shorthose, Paul Ravenhill, John Raftery, Alan Corner, Naheed Arshad, Ben Stanley
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ATM talking points

  1. 1. ATM talking points Airport performance Are queues really inevitable? Market liberalisation Opportunity or threat? Achieving long-term cost effective procurement Must it be so difficult? Implementing the SES How to avoid even more regulation Strengthening NSAs An investment worth making Civil-military integration Accommodating the military mission Reducing regional fragmentation The responsibility of FABs Operational continuity … in the light of strategic change
  2. 2. “talking points”As consultants we often shy away from in return you take the time to tell us what youdiscussing the big issues in public. think. We find that debating things helps us toSometimes from fear of triggering conflict; some- understand them more deeply – and generatestimes because when you shout that the “Emperor energy for action. So in the following pages, eightis wearing no clothes”, no-one else is ready of our most senior consultants tell you what is onto join in yet! But for once we thought it would their mind. Please join the debate in person,be good to tell you what we think and hope that on Linkedin, twitter, Facebook or by email.Airport performance Are queues really inevitable? Nick McFarlane 3Market liberalisation Opportunity or threat? Steve Leighton 4Achieving long-term cost effective procurement Must it be so difficult? Mike Shorthose 5Implementing the SES How to avoid even more regulation Paul Ravenhill 6Strengthening NSAs An investment worth making John Raftery 7Civil-military integration Accommodating the military mission Alan Corner 8Reducing regional fragmentation The responsibility of FABs Naheed Arshad 9Operational continuity … in the light of strategic change Ben Stanley 10
  3. 3. Airport performanceAre queues really inevitable?Everyone understands the frustration of would be reduced, there would be fuelhanging about in queues, whether they and emissions benefits and the passengerbe in the supermarket, the bank or at experience would be improved. There arethe security gates at an airport. Because also more strategic benefits, includingqueues are usually managed first-in-first- less variability in actual journey timesout (FIFO), the incentive is to race to be allowing airlines to reduce the sometimesat the front. large buffers in their block times needed to meet punctuality goals.The queues of aircraft arriving at ordeparting from busy airports are no There are, of course, difficulties associated Nick McFarlane Nick is Helios’ Managing Directordifferent. The incentive to be first in with this approach, not least that the and one of its founders. With overthe queue causes bunching. This results queue has always been managed as FIFO. 20 years’ experience of the ATMin negative impacts, including excessive The fact that something has always been industry, Nick is an acknowledged expert in the introduction of newdelays and unnecessary emissions. The done that way is not an argument for operational concepts and theproblem is especially continuing. Perhapsacute first thing in If holding in the stacks were the definition of underlying technologies. This includes a deep understanding ofthe morning just managed on an on-time-in-on- ontime should also the financial and business aspectsafter the airport has time-out basis, there would be be extended from on- as well as the operational dimension and the technical perspective. Nickopened for business, blocks upstream to aresulting in the little incentive to race point in the sky, top- has recently been analysing the operational efficiency of Arlandafamiliar sight of aircraft circling in the of-descent? There would also need to be and lines of aircraft on the ground. mechanisms to ensure good behaviour and 3 prevent cheating – things like flight plan- the tear-off tickets used at the slot correlation, already used in Germanysupermarket to reserve a slot at the for the Euro Soccer Championships anddeli counter, air traffic managers could proposed for the London Olympics.potentially use the airport slot as amechanism to incentivise the appropriate Whilst technical and operationalbehaviours at airports. For example, if difficulties exist, the hurdles are notholding in the stacks were managed on insurmountable. ANSPs, airlines andan on-time-in-on-time-out basis, there regulators need to work together to reducewould be little incentive to race to be queues before increased congestion forcesfirst at top-of-descent. So bunching their hand.
  4. 4. Market liberalisation Opportunity or threat? Steve Leighton Steve is a consultant at Helios with a professional interest in new ways of structuring and providing ANS. He has had a career long involvement in helping ANS providers implement new collaborative business models for service provision. Steve has The demands of meeting European to liberalisation where the opportunity for consulted in areas of ANS policy and legislation are difficult competition is limited. Some ANSPs have liberalisation and restructuring from enough but ANSPs must also respond to shown this co-operation even outside of a both the airport and ANS provider side focussing on practical measures increasing market liberalisation. Market FAB – for example, the Entry Point North to provide real-world, not paper, liberalisation is the process of allowing Training centre which is a joint venture benefits. greater competition and supply in a of the Swedish, Danish and Norwegian market. In ATM, this means: ANSPs.4 • allowing increased competition for ATC ANSPs need a procurement strategy to service provision at airports (as recently react to these new opportunities and seen in Spain and Sweden) threats. • encouraging greater provision of outsourced services (eg communications, Any strategy, whether defensive or supply of ATC training) offensive, needs to reflect the particular nature of ATM industry. Lowest cost Liberalisation expands the opportunity services are not acceptable if they for ANSPs to offer commercial services compromise safety. Procurement to other ANSPs. It can offer a benefit, Liberalisation expands the decisions need toofreflect the importance high by allowing ANSPs to opportunity for ANSPs to service quality and sell their services or offer commercial services to regulatory requirements. to procure others from Language and local the open market where other ANSPs knowledge form natural competition can reduce price and increase barriers to the outsourcing of some services. service levels. However, it can also be a threat, if it means that an existing part Nevertheless, there is plenty of of the ANSP’s business is opened up to opportunity for innovation in ATM and competition (as has occurred in some benefits to be gained from greater market States for airport ATC provision). openness. Firstly, ANSPs need to plan for regulatory and technology changes, and In Europe, FABs enable ANSPs to provide ensure they are protecting their own core common services, which is one response business. Secondly, they should look for to market liberalisation. Collaboration opportunities to take advantage of those between ANSPs can be a good alternative changes. Inaction is not an option.
  5. 5. Achieving long-term cost effective procurementMust it be so difficult?Achieving value for money through the output service requirements. Withoutprocurement of new ATM systems has an appropriate sharing of design andnever been an easy path, but there are now performance risk, the public sectoradditional pressures cannot fairly expectto make the journey Long-term supplier the private sectorabsolutely necessary. to deliver long-termSESAR is changing the partnerships can lead to value for money.competitive dynamics value for money So achieving value fordriving more complex money when entering Mike Shorthosesystems and accelerated interoperability. into a long-term supplier partnership is Mike is a founding Director andAt the same time, the performance scheme Chairman of Helios. He has been indeed difficult – and it is complex. Butis putting cost pressure on ANSPs, to advising customers on a wide range the challenge cannot be ignored anywhich suppliers will have no choice but of technical and business issues longer and it is possible to overcome. associated with Air Trafficto respond. Management for over 20 years. ANSPs must firstly understand the impact These include planning andSo what’s wrong with how ATM procures execution of large air traffic control of the performance scheme and itsnew infrastructure? projects, organisational change associated regulation. From this should and cost benefit analysis. Mike• Implementing new ATM systems emerge a clearer picture of business specialises in loan advice andoften requires a few large “big bang” requirements and service levels that can compliance monitoring and he works closely with ANSPs, FABs andprocurements. Unfortunately, they are be used to better shape the objectives banks on how to procure and fundalso characterised by long lead times of any procurement. Secondly, common common infrastructure and services. 5and a high incidence of delayed delivery. functional specifications − in partnership with other ANSPs − will allow suppliers• Large investments mean long to harmonise their product roadmaps torelationships with suppliers. The flip-side their customers’ requirements. ANSPsis little genuine competition between must recognise that too many ‘special’suppliers and being trapped into operational concepts will come at a costprogrammes of multiple system upgrades. and will need to be heavily justified.• Safety critical requirements havehistorically led to detailed input Last but not least, there is urgent need forsystem requirements, as opposed to reform of public procurement legislation. The current laws are far from agile, can present barriers between customer and suppliers and lead to unwieldy and poor value for money supply contracts. Revised procurement legislation is needed which maintains the principles of transparency and fair competition but which embraces the principles of private sector supply chain management. In Helios’ view, such reforms would make possible a genuine customer-supplier partnership, better suited to meeting the SESAR-driven technology challenge and achieving the cost-efficiency targets of the performance scheme.
  6. 6. Implementing the SES How to avoid even more regulation Paul Ravenhill The adoption of SES-II in 2009 is supposed wider cooperation with other ANSPs with Paul is Helios’ technical director to herald a shift from prescriptive similar procurement issues. The difficulty and a leading expert on the implementation of the Single implementing rules (IRs) to performance is that if ANSPs are given this freedom, European Sky. He has advised the based rules. large projects – like the introduction Commission, EUROCONTROL, the PRU, of datalink – may never gain sufficient ANSPs and manufacturers on the The rules developed under SES-I tended consensus. impact of SES legislation, including the establishment of to be prescriptive – that is they defined the SES performance scheme and a particular solution. For example the A balance is needed between freedom to the use of the interoperability datalink services IR requires ANSPs to optimise local systems and mandates for regulation to ensure SESAR implement a fixed set of datalink services. network-wide implementations. IRs need deployment. Paul is well known for his work with the Industry The rationale for the rule is that if every to ensure interoperability of systems Consultation Body which Helios has en-route ANSP uses A balance is needed between without enforcing6 supported since its inception. these services, there a ‘one size fits all’ will be a 10% uplift freedom to optimise local mentality that will in capacity across the systems and mandates for harm an ANSP’s ability network. All well and good; except that the network-wide to meet the targets. immediate benefit to implementations For pan-European an individual ANSP may not be that great. projects, ANSPs – including the Network ANSPs without a capacity constraint may Manager and SESAR – must work together not see any direct benefit. ANSPs with to present the evidence that network capacity constraints may consider that an investments are beneficial. alternative strategy would be more cost effective. If the correct balance is reached, Implementing Rules will be limited to Within SES-II, the performance scheme the technical level of performance and provides powers to the Member States interface issues. This leaves an ANSP to to incentivise ANSP behaviour to meet define the optimum deployment solution agreed performance targets that are for its own airspace. More prescriptive consistent with the EU-wide targets rules will only be resorted to where established by the EC. ANSPs fail to deliver on their targets. And of course For the benefits to be realised, if that still doesn’t work, ANSPs require certain the European Commission freedoms in deployment will adopt a more top-down planning to optimise their approach in SES-III. own system. In order to do so they will take advantage of cooperation within FABs and
  7. 7. Strengthening NSAsAn investment worth makingIn the second package of SES legislation, producing the plans, and the Commissionthe European Commission introduced approving those plans?a performance scheme to acceleratereform in air navigation. This requires Clearly, everyone needs to learn lessonsMember States, through their National from RP1. The regulation itself can beSupervisory Authorities (NSAs) to improved with additional key performanceestablish national binding targets for indicators and better assessment criteriacost-efficiency, capacity, safety and the – and guidance could be provided onenvironment consistent with targets set incentivising the Commission at EU level. John Raftery John came to ANS having previously helped design and implement aNational targets are number of price regulation systemspresented in national for transport and utilities through- out the world. In ANS, he helpedperformance plans (NPP) the Performance Review Commissionin which the NSA should design and apply its frameworkjustify the targets set in for the review of performance. Heterms of local conditions has advised international bodies, national regulators, and 21 ANSPsand demonstrate their on ANS policy and economics. Johnadequate contribution is one of the world’s acknowledged Reference Periods - target setting processto EU-wide targets. experts in cost allocation for ANS.NPPs should also define measures and But fundamentally, RP1 also demonstrated john.raftery@askhelios.comincentives to ensure those targets are that we need stronger regulators. To 7achieved. some extent SES, and the performance scheme in particular, is built on theThe Commission, aided by the Performance premise that a slight and temporaryReview Body, is just completing the increase in regulatory costs will deliverassessment of the NPPs for the first big improvements through improved cost-Reference Period (RP1). As the dust begins efficiency and safety. NSAs need to realiseto settle, it is clear that the potential for greaterANSPs have increased Clearly everyone needs to gains in RP2 by ensuringtheir commitment to learn lessons from RP1 that they are able toachieving more ambitious challenge the businesscost-efficiency targets and are believed to plans prepared by ANSPs. Further, Stateshave come close to achieving the capacity and NSAs must be prepared to incentivisetarget. But the process has been painful ANSPs to really deliver on their promises.for many and open issues abound: And we all need to recognise that if SES• How can the bigger costs savings is to succeed, NSAs must be adequatelyneeded to deliver the SES objective of resourced for the task ahead.halving unit costs be achieved?• Why did only two States defineincentive mechanisms for capacity?• How should NSAs justify nationaltargets and demonstrate adequatecontribution at EU-wide targets?• What is the right balance of influencebetween the national regulators
  8. 8. Civil-military integration Accommodating the military mission Ask a military officer what their airspace No-one denies the impact this will have requirements are and they will probably on other airspace users who may need to say “operational freedom and the ability be dynamically re-routed to accommodate to fly when and where we want”. military operations, but who will also now benefit from previously unavailable The military requirements are really airspace. no different to those of other airspace users – but the nature of the operation The concepts of operation and the means they will always need special ‘business’ and ‘mission’ trajectories need Alan Corner consideration. The future military mission further development to balance the Alan is a former ATCO who has worked extensively in the civil and is changing – new capabilities, such as ‘predictability’ required by the system and military ATM environment. At the UAS, are emerging and synthetic training the flexibility demanded by the military. UK Ministry of Defence he managed is progressively used to complement live To achieve this balance, the following long-term ATM service provision and flying. The military will operate a more regulatory issues need to be addressed: procurement contracts. Operationally, his projects have included the diverse range of aircraft that are equipped • a common certification route for civil development of new CONOPS and to different standards and will require and military avionics and CNS equipment the transition of military ATC to new less-frequent but ‘on-demand’ access to centres. For Helios Alan is leading flexible and probably larger volumes of • technical enablers to provide civil-military and operational aspects of FAB developments, and potentially cross-border airspace. interoperability between civil and defining technical requirements military systems for civil-military interoperability, SESAR argues that the introduction of 4-D8 including SWIM. trajectory based operations will provide • a means of securely sharing information across a SWIM architecture flexibility to meet future capacity needs – but what does this mean for the military? The challenge should not be under- estimated. SESAR is making progress by To accommodate the unpredictable and bringing together the views of the military. necessarily short However, the planning horizon, The concepts of operation and military remain the future system the ‘business’ and ‘mission’ less influential must enable any than commercial aircraft (from the trajectories need further development operators and the latest high-performance combat aircraft ANSPs in determining future concepts. to a UAS) to operate freely in shared Wider engagement, real focus and some airspace. It must also provide access to ‘out of the box’ thinking is required from special use airspace which can be turned the military, if they are really going to be ‘on and off’ at short notice – or even accommodated rather than tolerated. dynamically in flight to achieve mission objectives.
  9. 9. Reducing regional fragmentationThe responsibility of FABsIncredible as it seems, fragmentation • a history of bespoke developments inaccounts for approximately 40% of the air ATM systems limits interoperabilitynavigation service charges in Europe. The • the need to plan well in advancebattle against fragmentation is therefore to align system replacements requiresa principle aim of the Single European Sky coordination and decision making at theand FABs are one of the main weapons. highest levelsThere are many facets to de-fragmenting FABs have the potential to deliverthe ATM system: optimisation of airspace optimisation at the regional level,and route networks however, the big wins Naheed Arshadregardless of national FABs have the potential to may take time. They Naheed is Helios’ leading expert in Functional Airspace Blocks.boundaries; cross- deliver optimisation at the will need coordination She has been central to our workborder provision of regional level, however, the at the strategic level as for FAB Europe Central, FAB Central Europe, the UK-Irelandair traffic services; well as political buy-injoint procurement big wins may take time and support. States FAB, and most recently the Baltic FAB Feasibility Study. Naheedof infrastructure; interoperability must play their part by ensuring that has managed several CBAs ofand convergence of ATM systems; performance targets actively incentivise operational change within ATM and played a major role in the ATM/rationalisation of air traffic control ANSPs to be ambitious in reducing CNS fragmentation study for thecentres; coordination and consolidation fragmentation. Performance Review Commission.of services (in training, meteorological She has also undertaken a numberservices, aeronautical information). ANSPs must use the FABs to eradicate of regulatory impact assessments fragmentation. They will need to go further on SES concepts for the European 9 Commission.FABs are starting to go naheed.arshad@askhelios.comfurther than optimisationof airspace and aremaking moves to reducefragmentation at a regionallevel. They recognise thatthe significant benefitsfor ANSPs and airspaceusers can only be achievedthrough joint planning andprocurement of CNS/ATMsystems, consolidation andcentralisation of functionsand optimisation of ATCcentres.Although there may be a willingness to than current plans and start proposingmake improvements in these areas, a radical solutions if substantial cost savingsnumber of obstacles are slowing the rate are to be achieved. Looking at new waysof progress: of providing capacity, through networks of highly interoperable centres dynamically• national legislation restricts the forms sharing resources is essential.of procurement allowed
  10. 10. Operational continuity …in the light of strategic change The challenge for all businesses is to implement change whilst maintaining daily operations. The ANSP challenge is greater than most – many of the changes are enforced by European legislation that is not always aligned with local conditions, and the daily operations are a 24/7 safety critical mission that underpins the economy. So how should ANSPs rise Ben Stanley to the challenge of modernisation in the Ben is a director of Helios with world-wide experience in change emerging regulatory environment? management at a State, regulatory and organisational level. He has led To illustrate this issue, we can take teams in ANSPs (including FABs), some specific impacts arising from SES airports, and airspace users to facilitate modernisation, introduce legislation: new concepts, and help decision makers understand the impact. His • The Common Requirements for the environment. The rapid changes currently work has included Master Planning, Provision of ANS (EU Reg 1035/2011) being witnessed suggest a more agile business modelling, technical standardisation and most recently, set out a number of requirements to and flexible organisation is needed, with driving the implementation of be certified as an ANSP. The notion of the ability to work across department safety management across all an Integrated Management System is boundaries.10 aviation stakeholders on behalf of introduced, incorporating safety, security, the Government of India. environment and human performance. Integrated change management processes Many of these requirements result can take account of all business constraints in updates to internal processes and − internal and external. But creating a lean procedures, along with potentially altered organisation often requires facilitation to organisational structures. It is a common bring various interests together. It also complaint that many new processes may takes an understanding of new regulatory be over-designed with little sense of a processes, stripping out the unnecessary wider business impact. whilst maintaining the core objectives. • Increased capital investment is required What is certain is that ANSPs must to comply with technology deployment change. Tensions and imbalances will timelines, such as IP1 and SESAR. FABs stretch them to breaking point, unless a are intended to proactive approach to bring efficiencies, The rapid changes currently change management is but currently appear being witnessed suggest a employed. Successful to place a resource more agile and flexible modernisation burden on ANSPs requires a radical without significant organisation is needed review of processes OPEX or CAPEX reductions. This is all and procedural changes. And change in the context of pressure from the management processes are key to keeping Performance Scheme to significantly operations running whilst change is reduce the determined unit rate. underway. Organisational design theory links a business’ optimum structure with its
  11. 11. Helios is Europe’s leading independent consultancy in Air Traffic Management. We work with a wide range of organisations − air navigation service providers, regulators, government agencies, manufacturing industry and investors − to be at the forefront of some of the industry’s most exciting developments: the Single European Sky initiative, Functional Airspace Blocks and the great strides towards a performance-based ATM system. We understand all aspects of the ATM business ranging from the strategic, through the operational, to R&D. Our broad staff profile means that we can draw on the internationally-recognised expertise of senior business managers, economists, operational experts, safety and security professionals, systems engineers and technology specialists. Our success has been recognised through two Queen’s Awards for Enterprise (2004, 2009) and through the long-standing relationships and partnerships that we have developed with our clients. By combining innovative thinking with a practical approach, we will continue to help our clients improve and transform the industry in the face of the new and emerging challenges of the 21st Countries in which Helios has worked
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