Address to the European Aviation Club - Is European ATM competitive?

by Frank Brenner on 12 March 2014, Brussels (BE)

Slide 1: Intro slide

Good evening ladies and gentlemen,

It’s a real pleasure to welcome you all here to EUROCONTROL and to host this European Aviation Club event. I’m very pleased to have this opportunity to speak to you on a topic that is very close to my heart “Is European ATM competitive?” Do we in Europe use all our possibilities to the utmost extend to support our industry? Or is the discussion on competitiveness of ATM a false one as ATM is a natural monopoly?

Slide 2: ATM – A natural monopoly?

There is almost no competition in ATM in Europe.  ATM in Europe is almost entirely a monopoly.  I say ‘almost’ because there are some airports can choose who provides their air traffic control and there are some services – but very few – that are available commercially.  However, from an airline’s point of view, if you want to fly over Europe you have to use the different national European ATM systems and services.  And there are few options.  You can’t really avoid using the national monopolies.  So does it make sense to ask whether it’s competitive when it’s not competing?

My answer is clearly “Yes”.  Water is a natural monopoly – certainly it is impractical to have several pipes coming to your house.  But if the water supply in your town cost twice as much as in the rest of the country, if the supply was intermittent and if the company never came to resolve problems, you would want to know why they were worse than everybody else and you would want them to improve. And in other industries that appear to be natural monopolies, such as electricity and gas, you can select your provider in most European States, so there is a market.

With European aviation the stakes are very high.  It has a huge impact on the economy, not just in direct terms – the number of people that are employed in aviation – but also in terms of trade, in terms of mobility, in terms of tourism and so on.

Slide 3: Volcanic eruption

A few years ago we had a glimpse of life without functioning aviation – during the eruption of Eyjafjallajökull.  It wasn’t pleasant.  However, what it showed is how dependent our economy is on efficient airborne transport links.  We are all aware of just how fast the economies of other areas of the world are growing.  We in aviation cannot be, must not be, the weak link in the chain.

Slide 4: Picture of the flags at the entrance.

EUROCONTROL is an intergovernmental organisation, 51 years old, with 40 Member States.

We cover an airspace of over ten million square kilometres, with up to thirty thousand daily flights – that means up to four thousand five hundred flights being in the air at the same time.  Now, looking at such an area, we see different developments.

Slide 5: Long term forecast of traffic

We are starting to see traffic growth again across Europe – some parts, such as Turkey, have actually been growing while we in the north west of Europe have been stagnating.  Of course, growth rates are much less than in some other parts of the world.  However, our latest forecast, which does not assume we will revert to the long term trend, nevertheless foresees that by 2035 we will have 50% more flights than in 2012.  That’s nearly five million extra flights every year.  Our performance has to match this growth.

More flights also mean much more pressure on the airports.  In fact, it’s estimated that by 2035 many European airports, with their current investment plans, will not be able to cope with the demand.  It’s possible that some 12% of potential journeys will be affected.  That means that ATM will have to work extremely hard to help out capacity-constrained airports.  We have called for the politicians in our Member States to realise that the current investment plans at major airports do not support the needed capacity in 2035. It is not that the money is not available, it is about public perception, noise and insufficient political support for our industry.

Slide 6: Capacity-constrained airports

The impact is even worse than it appears at first sight. Heathrow stands as a synonym for a fully congested airport today in Europe. Just imagine that in 2035 we have a dozen Heathrows across Europe.  A dozen airports operating at close to capacity for much of the day.  A dozen airports accounting for a significant proportion of the flights taking place.  Now imagine that a problem arises somewhere in the system.  It could be a thunderstorm over Paris, it could be a closed runway in London, it could be a security threat in Frankfurt.  We’re running simulations on this sort of scenario and we can see a real danger that the network will not have enough resilience.  It will struggle to cope with the problem and to recover afterwards.

So performance matters.  If we can’t operate the system effectively and efficiently now, then we can expect much bigger problems in the years to come.

So the next question is how do we measure the performance of the system?  What do we mean by the word “competitive”?

At present we think in terms of four main measures.  Efficiency, capacity, safety and cost-efficiency, these are the areas set by European legislation.  Let’s look at them in turn and see what is actually meant by these broad terms. 

Slide 7: Horizontal route efficiency

Efficiency basically looks at whether the aircraft is burning as little fuel as possible in getting from A to B.  So if the aircraft can fly directly from A to B, using the most fuel-efficient trajectory, then we’ve achieved the objective.  At present, we are a few percentage points away from perfection in terms of how many miles covered.  As you can see, some city-pairs are more difficult than others.

Squeezing those last few percentage points is difficult but it is why we are introducing free routes airspace.  Essentially this means that aircraft don’t have to restrict themselves to flying between radio beacons.  The technology to be able to do this has been around for a long time.  Indeed, most commercial aircraft are perfectly able to navigate extremely accurately.  So why do we prevent them from flying as efficiently as possible? 

I’m afraid to say it has been air traffic control that has stood in the way of progress.  It’s easier to control traffic when it follows set paths.  That’s now changing.  We’re striving to open up the airspace and also to work with aircraft operators to make sure that they use the new freedom that’s available. 

Slide 8 Free routes airspace

This slide gives an idea of where we expect to be in five years.  Most of Europe will have free routes airspace and that will make a real difference in terms of saving fuel.

In fact, we recently had a User Forum and it was very encouraging to hear some airlines tell others about how much money we had saved them.  This is part of a new Flight Efficiency Initiative that we launched last year.  So far, the initiative has resulted in aircraft saving about a quarter of a million miles or eleven times the circumference of the earth.  That’s over fourteen hundred tonnes of fuel.  And that was only the trial.  Since the launch of the initiative, over twenty airlines have already signed up.

Slide 9 Military needs (image of military aircraft)

The other big issue for horizontal route efficiency is the military.  To do their job they sometimes need to have an airspace that isn’t cluttered with civilian aircraft.  I started my career as a military air traffic controller so I am very sympathetic to their needs.  But the key point is that they sometimes need exclusive access to airspace.  So what we have in Europe is Flexible Use of Airspace. 

That means there is close coordination between the military and their civilian counterparts.  As soon as the military don’t need the airspace, they release it for civilian use.  It’s already working well and we’re currently developing the next stage – making sure that this coordination works at a European level so that airlines have the very latest information on the availability of airspace. 

And here Europe is very good when compared with the rest of the world.  But – and there’s always a ‘but’ – that’s because we need to be.  We have an obstacle course of military exercise areas across the whole of Europe, often just where the civil air traffic wants to go.  That’s a direct result of Europe being made up of so many countries and I’ll come back to that later.

Slide 10: Vertical flight profile

The other part of having an efficient system, with a minimal effect on the environment is to improve the vertical flight profile.  In general, you burn less fuel at higher altitudes as there is less air resistance so there’s a benefit in climbing high and then staying there as long as possible – you may have heard about continuous descent operations or CDO for short; it makes sense not just in terms of fuel burn – and emissions – but also in terms of the noise impact near airports.  Again, it’s not the easiest system for the air traffic controllers but it’s being introduced across Europe whenever it’s possible.

Of course, you use more fuel climbing but, with modern aircraft, it’s worth their while to climb quite high even on relatively short flights. 

Slide 11: Graph of requested cruise altitudes

Indeed, in just the last five years we’ve seen quite a change in the cruise altitudes being requested.  You may have noticed it yourselves when you are flying.  This has several implications.  For example, it means that the upper airspace is becoming busier and that has to be reflected in airspace design.

Slide 12: Capacity (image of people waiting at an airport)

Capacity is another way of saying “no delays”.  In other words, can the ATM system cope with demand?  This has all sorts of implications for airlines.  Some delays result in greater fuel burn, some lead to knock-on or reactionary delays for later flights, all delays annoy passengers and all of them mean that the aviation system as a whole is not working as well as it should.

Delays happen because of many reasons, from passengers arriving late to aircraft having to de-ice.  But here we’re just looking at those caused by air traffic management.  This may be as a result of congestion en-route or at the arrivals airport.  Now we’re working with airports to improve their ability to take aircraft safely but this is a problem and, as I said earlier, it’s likely to be an even larger problem in the future.

Some of the ways we can tackle this issue include infrastructure on the ground – such as high speed turnoffs to make it easier and quicker for a landing aircraft to exit the runway.  They include techniques such as arrivals management, precision based navigation and Point Merge which help optimise the flow of aircraft on final approach.  They include moving from distance-based separation to time-based separation.  This means that when there’s a headwind on landing, the aircraft can maintain an optimum, safe separation but also maximise the use of the tarmac.

Again, Europe is leading the way on many of these innovations.  But – and again there is a ‘but’ – that’s because we need to.  In Europe airports are restricted in their growth and they are restricted in the number of hours in the day they can operate. 

Here, I’m not saying that airports should be able to build new runways whenever they want to, nor am I saying that they should be able to operate through the night – as airports do in the Gulf and in the Far East.  No, I’m saying that we need to recognise the limits we have and then work within those limits to make best use of the available infrastructure.

In terms of en-route delay, we are now down to about half a minute per flight on average.  That sounds good and it is a lot better than it was ten or twenty years ago.  But it still means that we have, on average, over three hundred flights a day with an en-route delay of over 15 minutes.  More than that in summer, less than that in winter.  So there is still work to do because, as traffic starts growing again, there is a real risk that this delay figure will start moving upwards again.

Slide 13: Safety

A simple way of thinking about safety is the absence of accidents.  And fifty or sixty years ago accidents were happening sufficiently often that we could use the number of accidents as a useful measure.  However, it is now over ten years since we had a fatal accident in Europe that was attributable to air traffic control.

So now, with so few accidents, we have to be much more sophisticated in our approach on how we measure safety.  We have to look at how many near misses there are, at how often aircraft or vehicles enter an active runway without permission, at how developed the safety culture is.  Part of this is making sure that incidents are reported.  In turn, that means that pilots and air traffic controllers have to feel that they can report problems without fear of a negative response – the so-called “Just Culture”.  We are making some progress here but it is difficult – particularly in some countries.

Despite the fact we see very few accidents, certainly very few caused by ATM, we cannot afford to become complacent.  Safety must always be in our minds.

Slide 14: Cost-efficiency (graph of unit rates)

Now for the bad news – cost efficiency.  In other words, how much does it cost to provide the ATM service?  Here European ATM is not in such good shape.  It’s improved over the last few years but it still costs about sixty per cent more than in the United States, when looked at on a cost per controlled hour basis.  Now why is that?

Well there is no one simple answer.  Traffic in the US does have a different composition – there’s a lot more General Aviation for example.  Social conditions are different – here we are talking about salaries, pensions, working hours and holidays. 

Slide 15: Fragmentation (map of Europe)

But there is no question that the structure of ATM in Europe is intrinsically flawed.  We have a patchwork of countries, each with its own service provider, each with its own systems, each with its own support on everything from tracking the aircraft in the sky to making weather forecasts.  That’s a lot of extra cost.

Slide 16: Functional Airspace Blocks (map)

The EU response to this was to push for the creation of FABs – Functional Airspace Blocks.  In effect they said to the service providers “Get together with your neighbours and start making operational savings”.  Now, it is fair to say that there is progress.  But in this jet age, the progress is at the speed of a glacier.  And that’s just not good enough.

So what can be done?  Well rather than hitting the problem head on, I think that we need to break it down.  We need to look at all the different elements that make up the provision of an air traffic service and ask “What’s the best way of providing this service?  How can we improve efficiency and cut costs by working together or by introducing competition?”

Let’s take one very practical example – billing. 

Slide 17: Billing

If an airline flies from Frankfurt to Milan, then it will receive a service from the German, Swiss and Italian service providers.  But it won’t be billed separately.  It will get a single bill from the Central Route Charges Office which will then distribute the money once paid.  CRCO has been running successfully and very efficiently for over forty years.  It saves the air navigation service providers a lot of money.  And it saves the airlines a lot of money.

There is a lot of potential for using this sort of approach more widely.  Some things make more sense at a FAB level while others can be done more efficiently at a network level.  We’ve identified a number of these – called Centralised Services. 

Slide 18: Centralised Services

There are a range of services here that make more sense at a network level rather than at a local, national level.  They tend to be concerned with data and how data is shared – something that will become ever more important as ATM moves into the twenty-first century – and no, we aren’t there yet.  They include working with trajectories in four dimensions, updating them in real time and sharing that information to everyone concerned both on the ground and in the air.  They include sharing the very latest information on when a military exercise has ended not just with the local air traffic controllers but with the airline in another country which can save money by flying a more direct route.  They include having effective data links with aircraft and not relying on radios for everything.

These services will be operated by consortia including ANSPs – after an open and competitive tender process.  This is not only more cost-efficient – we’re looking at savings of 150 to 200 million euros per year, but it also helps to push ANSPs into thinking beyond their national boundaries.  And that has to be a good thing.

It’s also good for Europe more generally.  We have some of the most congested airspace in the world.

Slide 19: Europe in World traffic

But other parts of the world – in particular Asia – are catching up. 

Asia in 2036 will have more traffic than Europe and the US put together. So there is a real potential for the solutions we develop today to be exported around the world to help solve the problems that they will be facing tomorrow.

So overall am I optimistic about the potential for Europe’s competitiveness on the world stage?  Well, it is a mixed picture and although we are good at some things, we are much too expensive.  To address that, we have to start thinking as Europeans first – rather than just being focused on the problems in our own country.

Thank you

To be checked against delivery

Presentation - slides to accompany speech by Frank Brenner, Director General, EUROCONTROL

Both the speech and the presentation could be downloaded in this page