Position Paper On The Future Of Eurocontrol

GateOne believes that the European ATM system is characterized by considerable legal uncertainty. GateOne considers that the discussion on the future of EUROCONTROL provides an excellent opportunity to define a proper role for EUROCONTROL both as the means of carrying out state functions for its Member States within the context of the Chicago Convention and as a public body to which functions are delegated from the European Union. This would also facilitate the improvement of the legal framework of the European ATM system, as well as the clarification of the roles and responsibilities of the different actors.

Therefore, to support the ongoing discussions, GateOne suggests that discussions on the future legal status, roles and responsibilities of EUROCONTROL are conducted on the basis of drawing up an exhaustive list of EUROCONTROL’s current and future activities and categorising them as part of one of the following groups:

  1. Discontinued activities
  2. Activities carried out on behalf of the Member States, within the context of the Chicago Convention, the EUROCONTROL Convention and the Multilateral Agreement
  3. Activities carried out for the EU on the basis of EU law and an appointment
  4. Activities carried out for remuneration (services, UPP, etc.)
  5. Activities carried out by entities other than EUROCONTROL (PPPs, joint undertakings, service providers, etc.)

Discussions directed along these lines would in GateOne’s view provide sufficient clarity both in respect of the scope and the legal nature of the activities forming part of the future vision.

Gate One Position on the draft Implementing Decision setting revised Union-wide performance targets for the third reference period

Gate One members fully acknowledge extraordinary circumstances in the aviation sector imposed by the outburst and negative impact of the COVID-19 pandemic. All stakeholders need to work in close coordination in order to overcome this unprecedented period and prepare for recovery of air traffic. Equally, all stakeholders need to carry their share of burden, while being able to maintain high standard of their services, not compromising their safety.

Gate One members respect the effort of the European Commission to reflect changes resulting from COVID-19 crisis in the proposal of revised Union-wide performance targets for the air traffic management network for the third reference period. However, they would like to share their opinions on respective provisions proposed and encourage the European Commission to reflect them in the draft Implementing Decision.

Safety

Gate One members accept the safety performance targets as proposed in the draft Implementing Decision. At the same time, it needs to be stressed that safety does not correlate to the volume of traffic in terms of costs i.e. safety costs should be considered a fixed component of the overall costs. Sufficient financial resources are necessary (under cost-efficiency targets) to maintain the high safety level.

Capacity

Interdependencies between respective KPIs must be acknowledged. It is unrealistic to expect that ANSPs will be able to prepare for increased demand for capacity toward the end of the reference period and beyond while keeping the Union-wide cost base at the 90% of the 2019 level. It is a known fact that building capacity requires investments in training of ATCO personnel and in infrastructure and the leadtime related to those investments must be duly considered. What is more, there was shortage of capacity already in 2019, therefore it cannot be expected that additional capacity can be built with significantly reduced financial resources before the end of the reference period. Currently, lower traffic allows for providing required capacity and reduced delays but setting too ambitious Union-wide and local capacity targets against the proposed cost-efficiency targets may lead to reduced capacity and periodic increase in delays. The capacity targets must be balanced with necessary resources ensured through proper cost-efficiency targets – which is not the case under the current EC proposal, where there is no clear indication of correlation between capacity and the cost-efficiency targets (with one of the key EC/PRB assumptions for the cost-efficiency target being to maintain total costs over the whole RP3 flat at 10% below the 2019A).

Environment

The fact that ANSPs were barely able to meet ENV performance targets set in the draft performance plans of 2019 or even exceeded them during the significant downfall of traffic in 2020 and in the beginning of 2021 clearly demonstrates that there are external and structural factors beyond the control of ANSPs negatively impacting environmental performance. While we recognise that targets should be ambitious, they must also be realistic. The proposed targets lack analysis of feasibility of their achievement, especially in the light of expected traffic increase by end of RP3 (the environmental indicator does not respond as significantly to traffic decline as it does to traffic growth and increasing complexity).

Most of the ANSPs have already implemented main concepts with positive impact on environmental performance, such as FRA or PBN and there is little if anything at all in their control that they can do. It should be therefore acknowledged that KPI methodology should be amended in a way that only factors under direct control of ANSPs are included in measuring performance in this area.

Cost-Efficiency

The draft Implementing Decision proposes EU-wide targets based on traffic forecast, which is highly unlikely to come even close to the actual levels in respective years throughout the reference period. To the contrary, it is very likely that already the forecast due to be published in May will vary substantially from the one proposed performance targets are based on.

Therefore, these assumptions must be duly reflected in the revision mechanism in order to enable flexible adaptation of performance plans in the situation of highly volatile traffic evolution.

The expected 10% cost reduction for 2020 and 2021 is in contradiction to recital (11) of the EC Implementing Regulation 2020/1627 on exceptional measures and the statement of the European Commission during the Appeal Committee of 12 October 2020 that cost-efficiency targets regarding years 2020 and 2021 should be based on actual costs and only unjustifiable or ineligible cost are not to be recovered. Since 2020 costs are estimated to be only 1% below 2019, the proposal about the 10% decrease clearly fails to consider this principle. It is unrealistic to expect that in the remaining months of cumulated 2020-2021 period this requirement will be offset by a decrease of up to -20%. It cannot be reliably expected that ANSPs would be able to reduce their costs in 2021 by almost 20% without negative consequences for their operations and further development, also considering that first months of 2021 already passed. The EU target for 2020-2021 must consider that cost reductions cannot be applied retroactively – in practice States/ANSPs will have only ca. 8 months to reflect this target in their financial proceedings (as the targets are to be adopted by 1st May 2021).Therefore, Gate One members request that the European Commission adjust cost efficiency targets to be in line with their former declaration made during the Appeal Committee and recital (11) of the EC Implementing Regulation 2020/1627.

What is more, cost reductions in 2020 and 2021 have been achieved mainly through temporary changes in collective agreements, postponement of investments and other extraordinary measures, which cannot be sustained in the long run. Thus, it cannot be expected that they can be applied throughout the entire reference period. This has been communicated by individual ANSPs and ANSPs associations since the outburst of the COVID-19 crisis.

High level of volatility in the pace of traffic level recovery throughout Europe is another important factor, which must be sufficiently reflected in target setting and performance plans assessment when it comes to cost-efficiency. Bearing in mind that cost-efficiency targets were set based on average European values, it is apparent that they will be more suitable for Member States, whose percentage values come close to those average ones. However, due account of the local circumstances of the outliers must be taken when setting performance targets and assessing performance plans at a later stage to allow ANSPs to plan their resources in such a way as to flexibly react to changing traffic level and traffic flows. Due to uncertainty linked to future traffic evolution the financial risks related to ANSPs operations remain high. Further clarity is needed on foreseen approach to assessment of local targets, as the underlying traffic forecast may significantly change (EU targets are to be based on November 2020 forecast, while new forecast is planned to be published in May 2021 - which would be underlying local revised RP3 targets).

As is the case with the volatile traffic recovery rate in Europe, there is also a number of other local circumstances highly impacting cost-efficiency performance, which need to be taken into account when setting performance targets and assessing revised performance plans to be submitted in autumn.

In 2020 ANSPs successfully maintained a full and continues service despite the changes in traffic levels and the revenues. However, with the additional monitoring, it has become obvious that some ANSPs achieved significantly more cost savings than others. Target setting must duly recognize this fact to avoid any discrimination of those ANSPs who contributed most during the peak crisis.

One of the assumptions for definition of cost-efficiency targets is based on the overestimated costs by Member States by 8% in the second reference period when comparing the determined costs and the actual costs. Such assumption is distorted and cannot be applied to those Member States, which did not overestimate their costs in the previous reference period.

Another fundamental aspect where the Union-wide averages and the Member States situations differ greatly are the baseline values. PRB finds that on the Union-wide level the 2019 actual costs were the highest of any year in the second reference period, even higher than the determined costs for 2019. By proposing that the 2019 actuals are used as the baseline for the third reference period cost efficiency trends, the proposal explicitely applies the inappropriate one-size-fits all approach, without due consideration of local performance in 2019. It effectively penalises the well-performing Member States that met their cost efficiency targets or decreased their actual costs in 2019 (the baseline year), while favouring those that did not.

Gate One members strongly oppose the PRB’s proposal to voluntarily waive or reduce the return on equity, which is allowed to be recovered as part of air navigation charges. The return on equity is clearly eligible and justifiable and the request to waive it is not legitimate and out of place. In fact, it equals requesting an additional state aid to airlines in the long run. Moreover, a number of ANSPs were forced to use bank loans to finance their operations during the crisis. It would be irrational to expect that repayment of these debts would be possible if they waive or significantly reduce their return on equity. As another way to reduce costs, the European Commission and the PRB expect that there will be no overtime hours in the entire reference period. Savings amounting to 4% of the total actual costs in 2019 are expected. Again, flat-rate cost reduction of estimated overtime hours would be harmful to those ANSPs, which managed to spend less on overtimes in 2019. In addition, in certain Member States overtime of ATCOs is not allowed by law and such local specifics should be catered for in the Implementing Decision. Moreover, using certain level of overtime might be “the norm”, as it may allow to flexibly use staff resources in peak periods instead of employing additional staff – this is the case especially in smaller units whit limited number of employees.

Increasing amount of investments in line with the ATM Master Plan will lead to higher asset base related costs (depreciation, cost of capital) which must be considered, when setting the targets. Furthermore, it is evidently false to anticipate, that the cost of depreciation can be decreased by 10% from one year to another (even without the effects of new capital expenditures). Moreover, since depreciation and cost of capital is not deflated as part of the calculation of real determined costs, the anticipation of a general 10% decrease for the whole cost-base means, that due to the non-flexibility of CAPEX related cost items, a minimum of an additional 10%+inflation on these items should be saved on staff and other OPEX cost elements. Continued limitation of financial resources in RP3 would prevent technological changes foreseen by ATM Master Plan and lead to capacity problems in RP4 – the proposed approach (cost capping at 90% of 2019A) would lead to unintended consequences.The European Commission and the PRB need to acknowledge the cost increasing effects of the ATM Master Plan, the deployment of new technologies necessary to maintain or improve capacity levels.

Lastly, it is unclear what the combination of the criteria for the assessment of the cost-efficiency KPA of draft performance plans would be as per the Regulation 2019/317, i.e., trend over the period, long-term trend, comparison with the DUC in the comparator groups in view of the inequal traffic recovery patterns, and if a deviation in case investments in capacity are grounded for the period beyond the third reference period will be allowed.

Gate One members adopted positions on SES 2+

December 4, 2020 - Just a few days before the videoconference of EU transport ministers, Gate One members approved two position papers regarding the Single European Sky 2+ (SES2+) recast proposal. While the first paper summarizes the most important observations and concerns regarding the SES 2+ proposal, the second examines the proposed future arrangements for economic regulation and the new Performance Review Body.

Considering the unprecedented challenges the aviation sector is facing in the shadow of the COVID-19 pandemic and the environmental crisis, Gate One members are determined to contribute to the creation of an efficient legislative framework, which will create legal certainty and a clear distribution of roles and responsibilities for the years to come.

“We absolutely welcome re-launching the debate on the future of the Single European Sky, as we feel that the current legal framework does not sufficiently reflect developments in the ATM sector and its broader environment. However, we do have some concerns about the SES 2+ proposal. I would mention the less than clear division of competences between the Member States and the EU, legal uncertainty and the uncertainties associated with the CDM process among the most important ones.

Gate One calls for a stable and transparent legal environment. We strongly believe that Europe needs a safe, efficient and sustainable transport sector, with aviation as one of its main pillars. We need new, innovative policies and rules to address the unprecedented global challenges we are facing. While overarching intersectoral regulation may be necessary to address these, sectoral regulation should ensure the continuous availability of economically and environmentally sustainable aviation infrastructure.” said Gate One Chairman and CEO of HungaroControl Kornél Szepessy.

A position paper on ATM Data Service provision, another crucial component of SES2+, was elaborated and published by Gate One earlier this year. All three position papers can be found below.

Gate One - Future economic regulation and new PRB

Gate One - General SES2+ position

Gate One position paper on ADSPs

Gate One Position Paper on ATCO Mobility Definition

1. Workforce mobility dimensions

Historically ATCO mobility between states has not been used too often. The reasons are far from simply the geographically specific training or lack of technology. On the one hand the availability of technology does not automatically mean that an ATCO, a doctor, a pharmacist or a lawyer can work in another EU Member State without fulfilling the specific requirements of that state. On the other hand, as stated by CANSO, ATCEUC and ETF, mobility should continue to be on a voluntary basis to avoid the introduction of social dumping and assist in the prevention of social tensions.

2. How to respond to Airspace Architecture Study

In the Airspace Architecture Study, the geographical constraints on air traffic services provision are identified as limiting factors for capacity. In the new target architecture, the term “ATCO mobility” should be replaced by “Geographically decoupled ATS” which gives the notion of ATS provider decoupled from its geographical location.

The use of technology and automation always imposes many safety and capacity related uncertainties and risks that can be managed only at the level of an ATS provider.

3. Safety in ATM is managed by an organisation

There is a drive to make the ATCO profession more commercial off-the-shelf, less specific, easily achievable and interchangeable. However due to specifics, the ATCO profession is far from being a set of trivial competencies (“turn left”, “turn right”). Those specifics stem from the ultimate role of ATM to ensure the safety of air traffic. This must be acknowledged, and rigorously managed because incidents in aviation have unacceptably heavy consequences. This is well documented by ICAO and commonly known as Safety Management System (SMS). The management of safety is a pivotal obligation in Regulation 2017/373 as well.
The ability for an ATCO to manage, within certain defined parameters, any airspace independently from its geographical location could make sense only in the context of an ATS provider. Although ratings of the ATCO licenses are recognized in all EU Member States, the endorsement for a particular working position is a different process. According to Commission Regulation 2015/340 skills and competencies are applicable only at the organization at which the ATCO has been certified.
Both regulations give us the grounds for the selection and training of ATCOs, management of the changes of the systems, procedures and ATCO competencies. ATCOs by themselves cannot ensure safety as standalone entities. The Safety Management System is a part of the ATS provider. Therefore “ATCO mobility” at the level of an individual professional is not possible. The ATCO will exercise her or his competencies only after she or he has been granted the endorsement as part of that particular ATS provider.

4. Automation is not a panacea

The pilot’s job is always put forward as an argument – pilots can “freely” move from airline to airline, why not the ATCOs. But the differences with the pilot working mode and environment that allow natural “pilot mobility” are to be clearly acknowledged. The cockpit’s layout, instruments (HMI) and the level of airborne automation is the same in the same type of aircraft be it at another airline. But you cannot transfer an Airbus A320 pilot to another airline which operates Airbus A380 aircraft, although she or he will know all the equipment in the cockpit. Neither the pilots’ nor the ATCOs’ skills should be explained in a simplistic “cockpit” concept. It is not only about knowing how to push the right sequence of buttons and pronouncing standard phraseology.
In the cockpit there has already been a trend to introduce new technology and more automation. Therefore there are more and more voices that pilots’ skills are undermined by overrelying on automation and human skills must be trained and maintained. Taking the human more and more out of the loop has been proven to be dangerous. The Boeing 737 Max accidents clearly showed the risks of undermined skills combined with incomprehensible automated flight control systems.
These lessons learnt must be kept in mind all the time by people who manage aviation. The new SESAR technological concepts should not be considered to be the ultimate solutions to solve human type of deficits, neither in quantity nor in quality. Such concepts presently targeted at V1 and V2 level of maturity do not provide sufficient basis for reasonable expectations yet. Furthermore, SESAR concepts, which aim at “ensuring safety” while the ATCO “only monitors” how safety is ensured might lead us to a dangerous analogy with the 737 Max case and should be reviewed with caution.
The tendency to rely more and more on systems and less on human skills might lead us into times when safety will no longer be managed with clear mind of human decisions, but we will rely on software, systems, AI and robots, which will hopefully ensure safety. But machines fail from time to time and people might have to live with some level of safety failures, which are not manageable nor understood by humans. Switching the paradigm to “systems are enough, an ATCO only helps” can lead us into a safety challenging future.

Cross-border FRA cooperation

On September 10, enhanced webex meeting of FAB CE Airspace Task Force took place. Besides FAB CE member ANSPs, four other Gate One members‘ representatives – BULATSA, PANSA, ROMATSA and SMATSA together with Network Manager experts joined the meeting to discuss potential for expanding of existing cross-border free route airspace arrangements.

The meeting was a successful kick-off of what the participants believe will become a meaningful cooperation bringing tangible benefits to airspace users.