Will Europe's aviation industry be ready for the year 2000? The honest answer is that nobody yet knows. To date, companies have largely been preoccupied with their own internal compliance issues, but the wider debate over how the issue will affect the industry as a whole has only just begun. There will be few direct answers until that industry-wide debate gets going in earnest.
The issue is further complicated by lurking fears over potential legal liabilities arising from the bug and of the need to avoid panic among clients and shareholders.
Questionnaires are currently flying backwards and forwards between Europe's airlines, air traffic control centres and aviation authorities to establish the state of affairs. Consultants and lawyers are joining the fray, warning that airlines need to look beyond strictly operational questions and make sure they are legally covered.
Most European airlines appear to be on top of the issue and are 'a little less preoccupied than nine months ago' according to David Guillebaud, consultant with Arthur D Little, which has been advising airlines on the problem. 'But I wouldn't be surprised if small airlines are in real trouble,' he adds. The view is shared by colleague François Geannet, at the firm's Zurich office. He believes that issues which are 'a matter of life and death are pretty much under control'. He adds, however, that there are still concerns over smaller companies with fewer resources. He believes that 'it is vital that the whole thing is pushed forward' by the International Air Transport Association.
Iata is currently in the midst of a world-wide road show to promote information gathering and assessment of the Y2Kissue. The show is due to arrive in Europe from Latin America this month.
Airports with over 3.5 million passengers annually, including all Europe's main hubs, can expect one-week-long site visits, while smaller airports will be invited to participate in seminars. Air traffic control centres in key areas will also be inspected for adequate compliance programmes.
Thomas Windmuller, who heads Iata's Y2K project, says that the 'awareness level in Europe, along with the US, is probably as high as anywhere', although he admits that this less true of eastern Europe and the CIS states.
In the UK, British Airways has budgeted £100 million (US$164 million)for the three years preceding 2000 to ensure business as usual over the Millennium New Year. The carrier completed its inventory of Y2K sensitive systems in June, and aims to have key systems ready by the end of 1998 'leaving 1999 for any adjustments and problem resolution', says BA's Y2000 co-ordinator Peter Cooke. BA is following a five stage approach: inventory; assessment; fix; test; and for non-critical systems, contingency plans which might involve employing more staff.
BAA, Europe's largest airport operator, is also beavering away with a £50 million budget and plans to have made all critical systems compliant by early 1999.
In France, where the millennium bug is known as the 'bogue de l'an 2000', the industry is working hard to beat the clock. This year Air France is dedicating FFr100 million ($16.7 million)- out of total expenditure of FFr40 billion - and 1,200 man-months to the problem, says Jean Cremet, Air France's Y2K programme co-ordinator. The French carrier began the debugging process in September 1997 and hopes to have most systems ready by December 1998. According to Cremet, financial computer systems, which must also be adapted to Europe's new single currency, the euro, will not be given a clean bill of health until March 1999.
Of the 500 applications Air France will be testing, one third (including reservation systems) are based on four digit time and are therefore 'safe', says Cremet. Another third will have to be updated, and the remainder decommissioned before 2000. He sees no risk of air accidents, but does add that there is a possibility that hiccups such as baggage arriving late at the airport may occur 'if adequate actions are not taken'.
At the French airline's main Paris hub, Aéroports de Paris (ADP)Y2K project manager Jean Pierre Bernigaud, states that its compliance effort will be subsumed into a FFr100 million overhaul of the company's entire data processing system.
In Spain Iberia's reservation systems, ticketing, check-in, message switching and load departure planning are already compliant. The rest are now being processed with completion expected by the middle of next year, including administration, workforce management, engineering, end user applications and freight systems.
Lufthansa is targeting mid-1999 for compliance and 'process-critical' items will be ready 'well before' this date, says a company spokesman. The German carrier projects that compliance with Y2K, together with the adjustments for Europe's euro currency, will cost some DM53 million ($30 million).
Alitalia says that it does have its own Y2K compliance programme but would not reveal any details. Milan airport operator SEA, which started sifting through some 6,000 programmes a year ago, says it will have adapted all its IT software to the double zero rate by September 1999.
KLMis spending Dfl100 million ($50 million) and has 200 IT specialists working on the problem. In July the carrier launched a 'global millennium council' with its alliance partners Northwest, Continental Airlines and Alitalia. The Dutch carrier claims that 75 per cent of its fleet is compliant, as are 43,000 reservation terminals. Acompany spokesman says he believes it 'is rather foolish to think there will be no problems', but suggestions that 'aircraft will fall out of the sky' are not to be taken seriously.
While KLM denies press reports that it was considering grounding its fleet, as does Lufthansa, all the airlines are categoric that they will not compromise safety.
'Airlines are not really so concerned about avionics - computer systems on the aircraft - they are concerned about what is happening on the ground and ATC systems,' says David Relf, head of aviation at lawyers Sinclair, Roche and Temperley.
But Eurocontrol is confident that ATC systems are on track to beat the bug. 'Eighty per cent of ECAC is aware of the problem,' states Jürgen Blume, Eurocontrol's resident Y2K expert. 'As far as I know they have all passed the phase of awareness and set up project management carrying out inventories,' he says. When Eurocontrol's web site, which includes a page for each of the ECAC states that are members of Eurocontrol, goes live in September, the pan-European air traffic control organisation expects 'awareness' to rise further. Blume is calling on each state to post information on their Y2K action plans on dedicated Internet pages.
He also wants all the ATC systems to have passed the 'technical and operational tests' by mid-1999, in time to beat the 9 September deadline when the 9/9/99 code will turn off some systems.
People are at various stages of compliance in the UK, says Peter Stastney, head of safety regulation policy at the UKCivil Aviation Authority. The CAA has sent letters to its ATC centresrequesting that they 'provide safety assurances of Y2K readiness' and wants replies by the end of the year.
The UKCAA is aiming for compliance in the 'second half of 1999' but if by mid-year there are indications that there is still much to do it would consider 'intervention', says Stastney.
According to the UK's National Air Traffic System, its £10 million ($17 million)programme has identified 200 of the total 582 pieces of equipment as 'potentially at risk'. Nats has already changed over 70 types of equipment, and upgraded old PCs, and is 'confident' that it will be 'fully compliant in time for the millennium', says a spokesman. Nats is 'afraid', however, that other countries may have 'left it too late' to cope with compliance.
In some cases less sophisticated ATC equipment could mean fewer areas where the millennium bug can pose a problem. At the other end of the spectrum, new systems are already Y2K proof.
Slovenia, for example, installed a 'highly sophisticated' Siemens ATC system in 1990-2, says ATS operations expert of the Slovenian Civil Aviation Authority, Boris Klemencic. He says that the system, also operated in Kazahkstan and Austria, was built to be millennium-proof. Staff numbers will be boosted and, if necessary, the centre at Ljubljana will go manual. 'We expect greater [ATC] problems in places like east Europe and Africa,' he adds.
With flight bookings possible up to one year in advance, reservations feature high on airline Y2K hitlists. Jean Christophe Robert, who heads the $23 million Y2K project at Amadeus, 'is pretty confident the industry has got it together' on the millennium bug, although he admits 'some started before others'. The 55 man-year Amadeus project will allow for compliance by the end of 1998, Christophe claims. The Amadeus system allows bookings to be made 362 days in advance.
The Amadeus inventory, completed earlier this year, will be followed by 'interim' testing with partners like Air France which involves connecting up Amadeus' simulated Y2K environment.
As a whole, the aviation industry in Europe has tended to be too cautious when publicising its Y2K problems. One reason is liability.
'The trouble is that there has been a lot of scaremongering and the threat of litigation can hamstring companies. You don't want to alienate customers [and worry investors] but at the same time you do not want to admit liability,' says Stephen Digby, partner at London-based Withers law firm. Withers is advising UK companies to introduce guidelines to employees of how to handle external enquiries and offers a legal audit for a fixed sum. Digby says companies which know their legal position have a 'better way to move forward' on the Y2Kproblem.
The firm recently carried out a study which concluded that a quarter of the UK's top 70 companies could not confirm that they had carried out a legal audit for Y2K. If larger companies are falling down legally, 'it gives rise to concerns about what must be happening among the thousands of smaller organisations', it argues.
The aviation industry may also lack insurance cover for the millennium. Insurers appear to be sufficiently worried and unclear as to their clients' readiness for the millennium to be considering a Y2K exclusion clause as annual contracts come up for renewal.
The London Aviation Insurance Market sent out questionnaires to clients at the beginning of the year on their Y2K readiness and drew up an exclusion clause and write-back with the advice of John Balfour, a partner at London-based lawyers Beaumont and Son.
Balfour says insurers are willing to cover liability for loss of aircraft, injury to passengers and damage of personal property on the ground but not disruption and delays, widely predicted for the millennium.
The lack of such cover may force airlines to avoid certain airports and regions, unless they want to take on the liability themselves, he says. The harsh wording of the exemptions being inserted into new insurance policies has already raised alarm and some anger among carriers, faced with the prospect of entering the new millennium without insurance cover.
Cooke at BA says the carrier is studying the questionnaire from its insurers and 'is hopeful that we can convince them that our programme is sufficiently robust'. No doubt other airlines will be striving to do the same.
Source: Airline Business
