Investment opportunities in European Air Traffic Control I f t t

Transcription

© Dr. Christoph Brützel & Christopher M. Cooper Aviation Consulting 2008
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Investment opportunities in European
Air Traffic Control
I f t
Infrastructure
t
Dr Christoph Brützel & Christopher M
Dr.
M. Cooper
Aviation Consulting
December 2008
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Content
1 Current situation of the European ATC industry
1.
2. Major trends in the European ATC industry
3 Upcoming
3.
U
i
investment
i
t
t opportunities
t iti
4. Approach for strategic positioning
5 Our
5.
O background
b k
d
2
1. Current situation of the European ATC industry
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The global ATC industry‘s value chain is based on principles that were
d fi d 60 years ago.
defined
Rationale of air traffic control
services
1. States are responsible and liable for
safety of air traffic within national
boundaries
• Navigation aids
• Air traffic management (guidance)
• Surveillance
2 Only in very few cases
2.
cases, national
borders and geographic range of
national air traffic control centers
do not correspond (Eurocontrol
Maastricht upper area control
center being such an exemption).
First Edition: Dublin, March 1946
Fifteenth Edition – 2007
3. Open sea areas have been allocated
to national airspaces by ICAO
convention
3
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In consequence, air traffic control competencies are fragmented within and
along
l
national
ti
l borders
b d
and
d so are processes and
d supportt systems
t
Air Traffic Control Centers and ATM support systems in Europe
Maastricht
upper area
control
> 24.500 ft.
Within the groups system bases are heterogeneously
tailored to individual ANSP specifications
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Within the current air traffic control system,
y
, air space
p
capacity
p
y is
congested and is becoming short. Congestion obviously can not be
managed at national level.
TOP 50 – Most constrained points in Europe
Source: Eurocontrol Performance Review Commission – Performance Review Report 2006
5
Backup
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Air traffic keeps
p growing
g
g and density
y keeps
p increasing.
g Bottle neck areas
focus in Central Western Europe.
2025: 21 Mil.
2020: 17.2 Mio.
2010: 12.5 Mio.
Source:
Sou
ce EUROCONTROL
U OCO
O 2007
00
2005: 10.5 Mio.
Source: EUROCONTROL 2007
Source: EUROCONTROL 2007
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In order to cope with future demand, ATC has to change its philosophy –
the industry will have to manage a shift of paradigms.
paradigms
Growth scenario 2020
Ch
Change
off paradigms
di
1. European integration and
harmonization of air
navigation service
provider industry
Traffic
2. From control of structure
(air space sectors) to
processes control
t l (gate( t
to-gate flight trajectories)
Additional capacity
enhancement
programs within
current systems
and processes
Ongoing short &
medium term
programs
2008
2013
2020
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Single European Sky (SES) is the European Commission’s key initiative to
push ATC in Europe towards consolidation and integration.
integration
Situation in year 2000
Single European Sky intiative
Key objectives
USA: Airspace (Mil. km2)
Hubs
9.8
31
Europe: Airspace (Mil. km2) 10.5
Hubs
27
Restructure European
airspace as a function of
air traffic flows,, rather than
according to national
borders
Create
additional
dditi
l
capacity
1
21
1
1
ATC Organization (civil + mil.)
mil )
en route control centers
Operating system
Software
900 Flights / AT controller
380 US $ ATC cost / flight
46
58
22
30
ATC Organizations (civil + mil.)
mil )
en route control centers
Operating systems
Software
Increase the overall
efficiency of the air
traffic management
system
480 Flights / AT controller
667 US $ ATC cost / flight
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Initiativ
ves level
Targ
get level
SES is based on three pillars.
Restructure
European
airspace as a
function of air
traffic flows
Liberalization
• Framework regulation
g
• Service Provision
regulation
• Airspace regulation
• Interoperability
regulation
Create
Additional
Capacity
g
Integration
Increase
overall
efficiency of
the air traffic
management
New ATM business
model
Functional
Airspace
Blocks
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A regulatory framework has been set to facilitate the change from national
autonomy and
d separation
i to European
E
harmonization
h
i i and
d integration.
i
i
SES regulatory
g
y framework1)
¾Integration of air space and alignment with traffic
requirements
q
(Functional
(
Airspace
p
Blocks))
¾Harmonized processes and systems
¾Measurable performance and improved economic
efficiency
¾Harmonized certification requirements acknowledged
internationally
¾Separation of regulatory and operational
competencies / duties
Integration and
harmonization
of operation
Harmonization
and
liberalization of
governance
¾Separation
¾S
ti between
b t
assignment
i
t (nomination)
(
i ti ) and
d
operation of Services (subcontracting to certified
ANSP)
1) Regulation laying down the framework for the creation of the single European sky (No. 549/2004);
Regulation on the provision of air navigation services in the single European sky (No. 550/2004);
Regulation on the organisation and use of the airspace in the single European sky (No. 551/2004);
Regulation on the interoperability of the European Air Traffic Management network (No. 552/2004)
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Teaming up within Functional Airspace Blocks (FABs), ANSPs consolidate
airspace
i
and
d aim
i at exploiting
l ii
resources synergies.
i
FAB intiatives
Key Objectives:
9 Consolidate and reshape airspace according to traffic
requirements
9 Enhance air space capacity, productivity and cost
effectiveness of ATC services
9 Harmonize ATM processes and support systems
9 Exploit synergies on the resources side
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SES Air Traffic Management Research (SESAR) has been launched as a
j i effort
joint
ff
off all
ll stakeholders
k h ld
SESAR Key Objectives
¾ Eliminate the fragmented approach to ATM
¾ Transform the ATM
system in Europe
¾ Synchronize the plans
and actions of the
different partners and
¾ Federate resources.
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The SESAR project is to drive the change in the ATC business model.
From structure to process
Today: Controlling trafffic within
sectors of air space
Tomorrow: Controlling trajectories from
gate to gate
Unmanaged
Low Density
FL 460 (500)
Managed
Mid-High Complexity / Density:
Sustained
S
i d Throughput
Th
h
FL 200-250
Managed
Low-Mid Complexity / Density
FL 100
Managed
Very High Complexity
/ Density
Unmanaged
Low Density

Dramatic increase in utilization of air space
Better utilization of congested airport infrastructures
R d
Reduced
dd
de-routes,
t
holding
h ldi patterns
tt
and
d polution
l ti
Enhanced economic efficiency and reduced cost and polution
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The SESAR flight plan encompasses variing time horizons
considering the degree off innovation involved.
SESAR flight plan
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These time horizons result into five service levels.
SESAR service levels
Implementation of initial service levels has been launched.
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3. Upcoming investment opportunities
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Part of the definition phase was to define sources of funding for the initial
i
investments
t
t in
i implementing
i l
ti
the
th service
i levels
l
l 1 – 3.
3
SESAR Investment Plan
6,220
6,220
Source: SESAR Definition Phase – Deliverable 5: Master Plan
DLM – 710 – 001 – 02 – 00, April 2008, p 84 ff.
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Once in operation, these investments will be served by a continuous cash
fl
flow
from
f
costt based
b
d user charges.
h
1. Capital employed in ATC
investment will be
served by
y cost based
user charges (published
air traffic control
charges).
2. Harmonized methodologies to assess capital
employed
p y and rates of
return ensure
continuous cash flow at
attractive level
COMMISSION REGULATION
(EC) No 1794/2006
of 6 December 2006
laying down a common
charging scheme for air
navigation services
Source: SESAR Definition Phase – Deliverable 5: Master Plan
DLM – 710 – 001 – 02 – 00, April 2008, p 88 f.
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Today initial ATC infrastructure investment funding follows different
models
d l resulting
lti in
i unequall rates
t off return.
t
Funding of ANSP investments
Governance of Air
Navigation Service
Provider (ANSP)
State body
Public
administration
ANSP
F ll state o
Fully
owned
ned
Company with
public / private
shareholders
B
C
D
E
Long term
liabilities
Equity
and
reserves
Equity
ratio
(B /(A+B))
Capital
employed
Cost of
capital
employed
F
Return on
capital
employed
(E / D)
DSNA
(France)
712.716
273.980
27,8 %
986.696
40.062
4,1 %
DHMI
(Turkey)
0
419.111
100 %
419.111
34.952
8,3 %
574.339
269.027
31,9 %
820.738
48.039
5.9 %
48.112
340.564
87,6 %
1.026.796
56.093
5,5 %
1.348.508
700.822
34,2 %
1.179.275
85.569
7,3 %
DFS
(Germany)
Corporized
A
AENA
(Spain)
NATS (UK)
Return on capital employed corresponds with the “risk free” category of investment
Public as well as private ANSP organizations make use of capital markets to varying extent
The governance of ANSP organizations ranges from public administration to public private partnerships
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Low risk and sustainable profitability are the key value propositions of the
upcoming
i
market.
k t

Initial infrastructure investment from innovative SESAR developments will open
opportunities for private funding in terms of debt and, most probably, in terms of equity
contributions.

Based on charging principles that have been agreed upon at European level,
investments will be served at steady rates of return.

Operational ATC-Services will remain public monopolies – consolidated, harmonised
and integrated at European level.

Public private partnerships will allow to combine public service offerings with private
funding background.

Furthermore private partners will facilitate a governance model acceptable to the
differentiated community of public partners.
partners
Combining risk aware long term investment funding experience with industry know-how and
a credible partnering approach will allow to achieve a favorable market position.
position
A timely definition of a well structured strategic approach to the market is a prerequisite to
gain first mover advantages
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As the turf is yet under construction, a well defined investor‘s strategy may
offer
ff profound
f
d first
fi t mover gains.
i
¾
¾
Market analysis
¾
¾
¾
¾
¾
Financial investors
Strategic investors
¾ Public funding
¾ Best Practices
Partnering options
Players / investors / decision makers
Volumes and timing
Customer targets / product requirements
Key success factors
¾
Competitive analysis
Resource analysis
¾
¾
¾
¾
¾
¾
Migration / implementation planning
¾ Business p
plan specification
p
¾ Budgeting
¾ Communication plan
(to whom, what and when)
¾
¾
Develop value proposition,
strategic options
and
d value
l chain
h i
¾
¾
¾
Develop strategic action plan
¾
Strategic fit / product portfolio
Market intelligence / know how
Reference success stories
Benchmarking
Value proposition (equity / debt)
Options to approach market
Products / ROI targets
Target accounts / prospects
Own value chain integration
Partnering / co-operations
Assessment of options
Business case
Implement action plan
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A three months assignment will provide you with a clear proposal
whether and how to go forward.
Project week
Aktivitäten
1
2
3
4
5
6
7
8
9
10
11
12
Kick-off
Market analysis, Interviews
Competitor analysis,
analysis Interviews
Resource analysis and
benchmarking
Develop value proposition and
strategic options
Assessment of options
Business case development and
specification
Development of action plans
and detailing of strategies
Feedbacks / Reviews
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5. Aviation Consulting background
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We offer broad experience in the industry and a proven strategy
consulting background.
Dr. Christoph Brützel
Christopher M. Cooper
Since 2003 Independent Strategy Consultant
Since 2008 Independent Consultant
Airlines, Airports, ATC, Service Providers
1996-2007 DFS German Air Traffic Services
1998-2002
1998
2002 A.T. Kearney International Strategy
Consultants
Director Corporate Development
Director Corporate Communications
Head, Human Resources Development
Principal of European Transport.Practice
1994-1997 LTU International Airways
1991-1995 Kienbaum & Partners, Consultants
Managing Director Group and Airline
1984-1994 Lufthansa AG
S i Consultant
Senior
C
lt t
1990-1991 Software AG
…, VP Controlling, Exec. VP Asia/Pacific,
Middle East & Africa
¾
Recognized to combine strategic thinking with
development of implementable solutions
¾
Broad and extremely strong senior management
background and know how through-out the aviation
industry
¾
Numerous consulting assignments with major
European Air Navigation Service Provider including
strategy review,
review privatization strategy,
strategy business
plan development, strategic positioning SES,
SESAR and internationalization
Senior Consultant International Projects
1980 1989 Unicef Germany
1980-1989
Executive Director
¾
Senior manager with over ten years of
multifaceted experience in the Air Traffic Control
industry; broad exposure to and contacts in the
related European arena
¾
management experience in the field of public
affairs with both ministries and parliamentarians;
recognised analytical and strategic thinker with a
drive to changing the industry
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5. Aviation Consulting background
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Contacts
Dr. Christoph Brützel
A i ti Consulting
Aviation
C
lti
Tannenweg 6
D-40670 Meerbusch
Christopher M. Cooper
Friedensweg 32
D-53332 Bornheim
Tel.:
Fax.:
Mobile:
Email:
Web:
Tel.:
Fax.:
Mobile:
Email:
+49 2159 8159804
+49 2159 670981
+49 151 15360956
Christoph@Bruetzl.com
http://www.bruetzel.com
+49 2227 9091097
+49 2227 9089648
+49 172 6627565
C.Cooper@Arcor.de
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