Air Traffic Management

Almost a decade ago now, (SES1 was adopted in october 2001), the idea of the FABs came by. The European Commission wanted EU member states to create functional airspace blocks in upper european airspace which do away with constraints due to national boarders and improve the efficiency and cost effectiveness of the European ATM system.

During SES1, the commission left the intitiative to its member states and alliances between states and their ANSPs were happening slowly. In 2008, with SESII and seeing that nothing much had happened since, the revised regulation stated that each member state should be part of a FAB by 2012.

With this rate, if ever this will happen, the first FABs will operate at least a decade and a half after their inception – And it is still to be proved that they will bring with them the advocated gains in efficiency and cost effectiveness.

But what makes me somewhat wonder is their name:  Functional.

To get neighbouring states to work together through a regulation, is that really functional or is it more Political?

If they were really to be ‘functional’ why limit the agreements to neighbouring states on upper airspace?  For me, it would be more functional if for example:

• All the oceanic centres: Scotland, Ireland, France and Portugal would join into one block. They have the same function, they can gain economy of scale for providing the same service with same expertise, same structure, same equipment…
• Or why would airports of a similar scale and traffic type not come together?  For example all hub airports: Heathrow, Roissy, Frankfurt, Schiphol…do they not have the same function?  Similar management of traffic, of information, similar equipment and expertise. Would that not bring added value to the system?
• Or why lower airspace for stong citypairs E.g . Frankfurt – Paris  not come together and optimise the flow?

Well, I am not saying that these have to be the solutions, as this is exactly the point. A function should be defined depending on a particular need and not simply say that there is only one function and that this is an agreement between neighbouring states for upper airspace.

Real functional blocks would happen when two partners come together and describe the function they will make more efficient by working together…

Then there is the other conundrum: Is the commission for a liberlised market that would look for efficiencies and for consolidation by itself? Or is it for intervening directly on composition and structure of operations?  I thought it was more of the former, but in FABs it is acting more like in the latter. To me it seems it is a hybrid solution which is will not lead too far.

ANS provision should be liberalised. The European union should build a strong safety regulatory framework and should federalise regulation. It should push States to liberalise their ANSPs. In this way the stakeholders of the ANS system (e.g. Airlines) could directly buy shares into ANSPs and drive them to efficiency and cost effectiveness (while being obliged to follow European regulation). It would even allow them to earn from service charges!  Why does the commission push through regulation the creation of Functional airspace blocks (which are NOT functional) and yet allow states (like Ireland for example) with service provision and regulation still under the same corporate structure? (e.g. the Irish Aviation Authority)

To conclude:

Functional Airspace Blocks are not functional they are Political.

Political Airspace Blocks are not Functional but Unfunctional.

So instead of FABs we have P[olitical] U[nfunctional] B[lock]S.

And now it is time for a drink…to forget our sorrows.

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With the introduction of serious  budgetary restrictions and growing pressure from the industry, Eurocontrol is looking at introducing a user pays principle on a number of its services.

For those who are not familiar, Eurocontrol Agency executes a number of projects and delivers a number of services on behalf of its 38 member states or directly for on behalf of the European commission.  Some of the projects it manages produces deliverables which historically have been turned into services that Eurocontrol then delivers. Some of these services, like for example the CFMU, are pan-European services, whilst others (one can almost say with ease: the majority) are provided to a number of entities (be it regulatory units, service providers (ATS or training or other) or other parts of industry) within only a limited number of member states.

Right now, mainly because of the 2 reasons I mentioned in the introduction paragraph, Eurocontrol, together with its stakeholders is studying the introduction of the user pays principle (UPP).

I have recently had a very interesting discussion with some colleagues about this theme and I would like to bring it forward to this blog:

The UPP seems to be a good and fair idea: Who uses a service pays for it, and who does not use it, does not.

However, scraping just a little bit the surface, one may soon discover some serious concerns:

1 It is neither service providers, nor the industry who pays for Eurocontrol’s budget.  So those who don’t use the service will not pay less. However those who use the service WILL PAY MORE.

2 Member states pay for Eurocontrol’s budget.  Do they want to pay less budget once the UPP is introduced?

3 Eurocontrol is seeking extra sources of financing, and not potential budget cuts and with 3 above, it would be more of the latter and less of the form.  Or is it not?

4 A lot of the beneficiaries of these services are service providers. And a lot (the vast majority) of these service providers in Europe are still public or corporatised entities.  When public entities have to contract work for which they need to pay and where public money is involved, once the payment exceeds a certain sum, they have to go for a public tender.

5 This means that not only Eurocontrol would have to charge for a service that either has already been paid for through member state financing (through budget) or else play a commercial risk while being a public company, but it will also mean that Eurocontrol will have to submit offers.

6 This means that Eurocontrol would have to compete with private companies on certain services.

7 But many have argued in the past that Eurocontrol should not compete as it is funded by member states and that therefore it would be unfair competition (especially in the European market)

8 If Eurocontrol cannot compete then it cannot offer its services.  Therefore the UPP is there to stop Eurocontrol from offering the service.

9 The philosphy of European memberstates funding a European agency to develop and deliver services for the benfit of its own industry is still viable today.  European states need each other, otherwise we would not have a European union. So what is different in European air traffic management?

10 If one argues that Europe should let the market have a fair chance of emancipating itself and thet at onepoint the demand versus offer will rule, then with the same argument, Europe should not oblige service providers to form functional airspace blocks.  Either we intervene for the benefit of the industry (and fund Eurocontrol to offer services to service providers) or we let the market to act freely (and not interfere on the FABs (and other) issue(s).

So, again, the UPP would make sense for a commercial company or where those who do not use would gain from the recipe: Who uses pays (company takes a risk, gets users and funds its activity), who does not use, does not pay.
However Eurocontrol is an agency funded by member states. If the member states want to save money, then they will be asphyxiating Eurocontrol, especially if they keep it mission of public service (meaning that its first aim is not always commercial viability), ask it to take commercial risks without being able to reap the benefits, maintain the principle of non competition, and cut its funding because of UPP.

Member states, and European industry have reaped a lot of benefits from heaving an agency like Eurocontrol concerting, harmonising, developing and delivering work. Going backwards to individual benefits in a globalised world will be the wrong path to take.

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