INTERVIEW: Europe’s transport chief Siim Kallas

 

ATM: Europe has told the vast majority of its ANSPs to work much harder in delivering a single air traffic system. The ANSPs were consequently charged with revising their plans before the end of December 2011. Have they done so? Are you satisfied with the individual efforts by Member States? If so, does this put Europe back on track? What sort of enhanced measures will the ANSPs in question undertake to achieve the agreed targets?

Kallas: The implementation of the Single European Sky (SES) and the achievement of performance targets is one of my key objectives and priorities. All Member States have submitted revised performance plans. The assessment of these revised plans is still ongoing.

Already today I see improvements as compared to the situation that was presented to us last summer in the initial performance plans. Some Member State authorities had serious discussions with their ANSPs and are presenting now more ambitious targets, other Member States have seen that on the basis of the 2011 performance, together with the help of the Network Manager and neighbouring countries, higher capacity targets can be delivered. Also on cost-efficiency improvements are visible.

ATM: Progress on creating Functional Airspace Blocks (FAB) has been meagre. Do you still believe the FAB remains capable of delivering the sought after efficiency since the FABs themselves are based on national borders? Do you think Member States should be more willing to give up control of what takes place within their airspace borders? What, in your opinion, needs to be done to make Member States acknowledge that they have to concede a degree of sovereignty for the greater good?

Kallas: Regulatory requirements pertaining to FABs are based on in a range of institutional and operational criteria. While institutional criteria concern the agreements and declarations between Member States, surveillance authorities and ANSPs, an essential feature of FABs is the fact that they should meet far-reaching substantive operational requirements such as maintenance of safety and environmental performance and optimum use of airspace, technical and human resources.

FABs constitute the essential foundation in the creation of the SES, which is why the substantive requirements I’ve listed above were included in Regulations in the first place. Now timing is essential since the deadline for establishment of all FABs, including compliance with all substantive requirements, is 4 December 2012.  The current approach is bottom-up, allowing States to develop objectives and priorities at FAB level. Meeting the substantive requirements by 4 December may be hard to achieve if national borders remain too prevalent in current FAB developments. Notwithstanding States’ willingness to give up any more control, if any FABs fail to meet these requirements by 4 December, the Commission should then decide whether to launch infringement procedures against Member States or to revise the current approach to the establishment of FABS.

A wide consultation process has just been initiated that would allow the ATM community in 2012 to share observations with the FAB stakeholders as regards the objectives of the various FAB initiatives. From a formal standpoint, national sovereignty is not affected and it is indeed not jeopardised by SES Regulations, in line with States’ prerogatives under ICAO’s Chicago Convention. But if all FABs requirements are met in full, Europe can achieve the sought efficiency gains from the very concept of FABs.

ATM: CANSO’s latest Global Air Navigation Services Performance Report (2011) shows that the average cost per IFR flight hour for the 17 EU ANSPs in their database is $708, compared with $429 for the United States and just $297 for Canada. In the latter two cases, airspace boundaries and centre locations are independent of political boundaries.

Do you think a genuinely self-supporting, rather than state-owned ANSP could more easily achieve the desired levels of efficiency in a Single European Sky scenario?

If so, how would the Commission go about assisting industry restructuring, such as permitting the devolving of control towers to new owners who would then be free to either self-supply or outsource services?

Kallas: Your question relates to a mix of ownership, efficiency and airspace boundaries. Note that the links between these are not direct and that the US system is, by the way, state-owned.

In Europe, due to national boundaries, the airspace configuration is not always linked to an optimal structure of service provision. The number of Air Traffic Control Centres is high compared to the amount of traffic, is not linked to the amount of service providers and the efficiency of the service provision differs per state. This is not directly linked to the legal status of the providers on which the Commission has no say. However I agree that more efficiency should be achieved.

The SES regulatory framework is developed with a view of providing more capacity in the airspace at lower costs. Therefore a separation of functions is required, between the state as regulator, the service provider and the oversight authority. The Service Provision Regulation requires certification and designation of service providers. This was deliberately introduced to create more opportunities for service provision across the borders. The Commission had in mind to encourage cross-border service provision, but service provision at national level is not legally restricted to one national provider. In several EU states, airports (the tower) are served by other service providers than the main ‘national’ one. Luxembourg, for instance, has its national provider for the airport, Belgocontrol for the intermediate airspace and UACC-Maastricht for the upper airspace.

ATM: Does the Commission have any policy position for or against ANSP mergers and acquisitions in the light of DFS’s reported interest in acquiring a major state in UK provider NATS?

Kallas: The Commission is neutral as to the ownership structure of service providers or acquisitions provided that competition and other rules of the Single Market are fully respected. Cross-border mergers in this sector might help to integrate the system. Therefore if these processes are continuing the more important it becomes to have a well-functioning performance scheme in place. What I don’t want is that acquisitions are financed by high charges to the detriment of users.

ATM: Would the advent of cross-border mergers and acquisitions of ANSPs achieve far more than state-owned entities ever could?

Kallas: The goals of the Commission are in line with the SES regulatory framework. There is no particular position on either size and ownership.

The EU has created the opportunities for cross-border service provision. A service provider certified by an EU State can in principle provide services all over the EU territory, if the national authority designates this provider to perform services in its airspace. Due to the separation of functions, the legal status of a service provider does not make the difference. It is perfectly possible to merge providers, to take shares in other service providers with the existing EU framework.

The performance Regulation is also developed to bind the Member States with targets; in future this may be done at FAB level as well. States have the options to critically define the required capacity, efficiency at lower costs. Optimisation of sector configuration, cross-border service provision, common procurement of equipment for service providers, training of air traffic controllers and maintenance are made possible by SES Regulation.

ATM: In terms of Single European Sky deployment, industry is to be offered the chief responsibility to ensure the timely and synchronised implementation of Europe’s future air traffic control system.

When the Commission says deployment should be led by industry, what is its vision in terms of an ideal mix of constituents within a future industrial partnership at the helm?

The special Task Force advising the Commission recommended that because public oversight would need to offer guarantees of independence, as well as oversee the expenditure of public funds, the Deployment Manager would need to be an essentially public body.

What prompted the Commission to effectively go against the advice of the main European organisations that have and continue to play an important role in the implementation of the Single European Sky and SESAR?

Who will supervise the powers it will be given to evaluate the financing needs of the various implementation projects and direct €3 billion worth of public funds into them as it sees fit over a ten year period?

Kallas: I would not go so far to say that we have gone against the advice of the Task Force. The common objective is to achieve a credible and efficient governance structure that will ensure a timely and synchronised deployment of SESAR technologies and systems in accordance with the European ATM Master plan. Such governance must ensure that each deployment stakeholder plays a role for which he is competent and responsible for.

One of the Commission’s driving principles for organising SESAR deployment is that the investing stakeholders, those who are responsible for the performance of the ATM system, must play a central role in coordinating and synchronising deployment activities under the political oversight of the EU. We also insist very much on making an optimal use of the existing Single European Sky and EU instruments and mechanisms and avoid creating new heavy and expensive entities. The three level governance we envisage, and suggested by the Task Force, aims to accomplish just that.

The European Commission, in the first level, maintains oversight on SES policy and full control of any EU funds allocated to deployment. In the second level, an appropriate participation of ANSPs, airspace users and airports, with the contribution of the ground and airborne manufacturing industry to ensure synchronisation with industrialisation processes, will be tasked to coordinate, on the basis of an agreed programme, their deployment investments for essential components of the new system.

ATM: The Commission has said the Deployment Manager could possibly, in future, define the roles of, and working arrangements with, the Network Manager, the SJU and the co-ordinator of military ATM efforts in addition to promoting regional co-ordination through Functional Airspace Blocks. What will this mean in terms of how both Eurocontrol and the SJU evolve as institutions?

Kallas: The Commission will define these roles, again by activating existing Single Sky instruments, such as Common Projects and the related guidance material. Currently, we are discussing with each of these stakeholders how to establish clear and appropriate roles in accordance with their respective competencies and possible future developments of these competencies.

ATM: Finally, ATM noted with interest that money raised by Europe’s controversial carbon trading scheme could help fund the modernisation of its outdated air traffic system. With more than two thirds of SESAR costs – a massive €22 billion – to be picked up by airlines together with the military for aircraft equipage, how much of the carbon levy imposed on international airlines could be realistically directed back into funding infrastructural improvements?

Kallas: Only a small proportion (15%) of the total aviation allowances under the EU emissions trading system are to be auctioned each year. This is not a carbon levy. The total annual revenue likely to be raised through auctioning of such allowances is expected to be around €300-400m a year. These revenues will accrue to the EU Member States and, under the EU legislation, it is for Member States to determine the use to be made of these revenues, although the legislation specifies that the revenues should be used to tackle climate change in the EU and third countries. While this can include investment in infrastructure improvements, any contribution from this source would clearly be small relative to the overall funding requirements of SESAR.

ATM: Other potential sources of financing will be explored too, such as loans from the European Investment Bank and the Single European Sky Charging. What is the Commission’s thinking on how they may be structured?

Kallas: We are currently exploring these and other funding mechanisms for on the essential deployment requirements.

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