The solution for Europe's air traffic delays is simple. First, look at the causes - a fragmented air system controlled by a patchwork of control centres that leads to the inefficient management of air traffic flows. The solution, obviously, is to take away the fragments, replace them with one regulating body and the lowest number of air traffic control (ATC) centres as technologically permissible and commercialise Air Traffic Services (ATS) providers to make them economically responsible.
But bring in politicians and, suddenly, this easy solution looks more complicated. Some governments - notably those of the UK and Germany - say privatising their ATS providers will solve the problem, while others want to empower Eurocontrol and create the European equivalent of the US Federal Aviation Administration. The difficulty in solving Europe's ATC problems, it seems, is not the patchwork of airspace but the patchwork of different ideas, priorities and initiatives which politicians want to pursue.
In theory, the problems of air traffic flow management are obvious. There are 49 European ATC centres, 31 national systems, 30 programming languages, 22 operational systems and 18 suppliers of hardware, all in an area that technically could be controlled by four centres in four countries, using one programming system, one operating system and one type of hardware.
There have been steps to lower the number of control centres in some European countries, notably Germany and the UK, but no pan-European plan exists. In the early 1990s, programmes were introduced but did not decrease the fragmentation of the airspace.
Yet the air management system of Europe's skies is close to breaking point and something clearly has to be done.
Some blame service providers, pointing to those centres which have failed to meet the efficiency targets set by Eurocontrol. Some of the most vocal critics, including the airlines, point to the lack of commercialism at this level of service provision, adding that a degree of competition between control centres might improve efficiency.
"There are some ATS providers like Deutsche Flugsicherung [DSF] in Germany that are moving towards a more business-minded operation, looking and talking to their customers and attempting to understand future requirements," says Matthias Mette of Gemini Consultants in Berlin. "But there are a lot more ATS players who are inefficient and have no commercial minds or no ideas how to service their customers."
To solve the problems surrounding the ATC system, Europe has two options. It can create a sort of European FAA, or build a system around a series of privatised and competing ATS operations.
The European FAA system is favourite among politicians because this would require one central body overseeing the operations of the many service providers. Essentially, this would mean extended powers for Eurocontrol. With the European Union (EU) considering joining Eurocontrol as a fully fledged member, the political clout to back up sanctions would also be there.
But that is also the reason why critics of such a system, including many of the airlines, do not want this structure. They feel that the EU's involvement would only add a layer of unwanted bureaucracy to the whole system. Besides, the EU only covers 15 nations while Europe has 36 nations - how would non-EU nations be controlled?
Furthermore, the Euro FAA model does not add any guarantees that ATS providers would improve their efficiencies, as they would largely remain state owned. If this were so, where would investments come from? Some airlines, including the increasingly vocal Lufthansa, favour privatisation.
Inefficient ATC centres
Lufthansa and other advocates of privatisation suggest that it will foster competition and this will bring about a natural reduction in the number of ATS providers as owners look to cut the costs of inefficient ATC centres. "Privatisation would definitely help," says Phil Hogge, IATA's director of infrastructure for Europe. "Provided there are adequate safety and economic regulations and the inter-national links are in place, there is no reason to why we couldn't privatise ATS providers."
Pressure for this type of commercial overhaul, and even privatisation, looks set to grow, particularly if the airlines start to fail to meet growth plans because the airspace capacity does not exist. In July, the UK Government announced plans to privatise the National Air Traffic Services (NATS), the body charged with the country's airspace management. If the government overcomes the union-led opposition to this decision, it will be the first service provider in Europe to be fully privatised - although Germany's DSF has corporate status. The motivation of the government is to shift the burden of investment from the state to the private sector. However, it is likely to be a long time before the privatisation of Europe's ATS providers gets on the political agenda, let alone happens.
Similar to the Euro FAA idea, the pan-European competitive model rests on a stronger regulatory authority in Europe, which would provide a level playing field for all service providers to compete on. "This means there needs to be a clear distinction between regulators and operations," says Mette. In many countries, such as France, the authority which sets the rules, standards and targets also operates the ATC system, he says.
"This is exactly the model that leads to inefficiencies and poor air traffic management," says Mette. "This system doesn't work anymore. There needs to be an authority to set standards and have rights of sanction if nations do not comply with these regulations."
Gemini's vision is borrowed from the model of the telecoms, railway and power sector's privatisation, where the competitive structure of the privatised industry is based on separating infrastructure service provision from the direct service providers. "Air Traffic management (ATM), by its nature, can go down this path," adds Mette.
In the model of a fully privatised ATC grid, one service provider, or ATS centre, would be able to buy and control other service providers and offer airlines different levels of service. The Gemini model suggests this is where the competition between centres could be. Airlines would be able to choose the service that best meets their needs. For example, from one ATS centre, the following could be offered to airlines using its sector:
A premium service (eg a short-haul business flight) including on-time guarantees, service along an airline preferred route but paid for at a premium price. A standard service (eg a low-cost hub feeder) offering routing flexibility and guaranteed windows of arrival times. A budget service (eg tourist charter or low-cost flights) using routes that are adapted to capacity constraints with wider windows of arrival times.This model also has little prospect of being introduced soon. "The EU is the key to unlocking this potential," adds Mette. "ATC is not top of the airline agenda," he says, adding that with delays worsening, ATC is almost certain to climb the priority ladder.
But this does not mean a solution to commercial agreements are imminent. There is little will from many politicians to allow "their" air service providers to be controlled by "foreigners". Even in the UK, the most advanced country in these terms, the privatisation of NATS is restricted to UK companies.
"There is still a long way for politicians to go before they understand the commercial needs of airlines on ATC provision," says Mette. "There are only a few open-minded players that see that the industry has to go this way."
The military influence in some countries is so strong, for example, that deregulation of airspace management will be almost impossible. In France and Switzerland, the military still has quite a role to play, especially when it comes to aviation and ATC. In Germany there are constitutional barriers which limit the scope for foreign providers to act as an ATC provider in German airspace. Some believe that improved co-operation between European countries on military issues could turn into improved co-ordination on commercial airspace usage.
Privatisation question
A big question is whether privatisation of ATS providers would even work in improving ATM flows. After all, it has never been tried and other utility privatisations, such as the railways in the UK, have yet to prove that they achieve higher rates of investment or improve efficiency. There is also a major concern, propagated by the sections of the UK's national press, that privatisation of NATS could lead to safety compromises.
The IPMS union in the UK, which includes air traffic controllers, also believes safety could be undermined. It adds that a privatised NATS would have to make higher profits and the only way of achieving this is to lower fixed costs - in other words reduce the number of air traffic controllers in each centre. "If labour costs are responsible for 90% of NATS running costs," says the IPMS, "how else can it make substantial savings on running costs other than by cutting labour costs?" This, it adds, will lead to greater concerns over safety.
"All the commercial efficiencies in the world will fall to the ground the minute the public gets a whiff of fear that the ATC system is unsafe. The ultimate commercial idiocy would be to allow your commercial obsessions to reduce safety standards in the skies," says the IPMS. "The reason why there are delays is not because of inefficiencies in ATC. It is because of current equipment and organisation in the skies."
Advocates of privatisation counter this by saying that an inflation-linked formula for change, used by the UK's privatised airports, is enough to balance excessive profits against investment requirements. But privatisation, says the IPMS, is further flawed because some of the confidential information which is shared would suddenly become commercially sensitive. If information is not freely flowing between ATM operators, then this could also compromise safety, says the union.
But there is another problem attached to the privatisation model. If, technically, it is only necessary to have four or five control centres in Europe, would each of these not become a private monopoly, earning huge profits for the operators at the expense of the airlines? "There is always a danger that in a consolidating industry, air traffic control might become non-competitive," says Mette. "But this is the final stage of consolidation, as we are seeing with the airlines."
Eurocontrol's line on privatisation is difficult to pin down. Dirk Duytschaever, director of the Central Flow Management Unit at Eurocontrol, says the ATS service providers have not been proactive enough in providing capacity growth in line with traffic growth and that privatisation could help. "But privatising a natural monopoly may have drawbacks. In some countries it may be the best way to provide an efficient service, but it may not be the answer in others. I don't think privatisation is the universal solution for every country."
If privatisation were not carried though by at least several countries, the idea of a competing and commercially aware network of ATS providers falls through. So if privatisation is not the answer, what is?
Even privatisation sceptics say that a degree of commercialisation is needed, if only to force under-performing service providers to improve. In Germany, the corporatising of DSF made it more commercially aware. This led to a rethink on how German airspace was used.
But the problem is that where Germany has improved its system immensely as a result of this, the project stopped at its borders. "When you are looking at European air traffic control," says Hogge, "you can't do that. When you are looking for the most operational efficient shaped sectors, national borders should not count. What DSF has done needs to be done on a European scale."
There are some largely technical solutions to capacity constraints in Europe's skies. Reduced vertical separation minima (RVSM) is one of them. Another is free flight. This entails aircraft above a certain height controlling their own routes. But while the latter is becoming a more defined as a concept, the technological complexities are only just beginning to be addressed. In terms of solving the problems of air traffic control in Europe in the short or even medium term, most observers believe free flight is not a viable solution.
In the short term, the solution to Europe's ATC problems will probably come down to whether Eurocontrol can gain more powers of sanction against its member service providers.
Privatisation will happen, in a piecemeal fashion. How the model created by Gemini would work in an environment consisting of both privately and publicly owned ATS providers remain to be seen. It also far from clear that unions concerns about safety will prove correct.
In the end, the choice of funding an expanded Eurocontrol over a fully privatised system of service providers will be up to the politicians to decide. Sadly, there only seems to be limited political will to fix Europe's delay crisis and before long the ability of airports to handle delayed passengers will exceed its limits. For now, "the plaster is crumbling," says David Henderson of the Association of European Airlines, "but the bricks are still holding firm".
Source: Airline Business
