The ATM Policy Institute

Anintroduction

The ATM Policy Institute

HeadlineTheneedforreform

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The ATM Policy Institute

Current industry structure

Historic monopoly status

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Government control

Createsbehaviours

:HDN�LQFHQWLYHV�WR�LPSURYHperformance

Resistance to change

Management respond todemands of government rather than airline customers

Under-performance of ATM industry

This includes:

High prices

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Fragmented airspace

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Slow adoption of new technologies

7KH�PRQRSRO\�VWDWXV�RI�$163V�KDV�DOVR��DW�WLPHV��led to management complacency and created a FXOWXUH�RI�UHVLVWDQFH�WR�FKDQJH�LQ�WKH�ZRUNIRUFH��This often manifests itself in entrenched resistance DQG�VWDII�RSSRVLWLRQ�WR�DQ\�VLJQL¿FDQW�FKDQJHV��IUXVWUDWLQJ�HIIRUWV�WR�LQWURGXFH�UHIRUPV��)RU�H[DPSOH��GHVSLWH�HQGHDYRXUV�WR�FRQVROLGDWH�WKH�DLUVSDFH��it remains highly fragmented in many parts of the ZRUOG��WKHUHE\�FRPSOLFDWLQJ�WKH�SURFHVVHV�IRU�DLUFUDIW�WUDQVLWLRQLQJ�EHWZHHQ�$163V�DQG��LQ�VRPH�FDVHV��EHWZHHQ�VHFWRUV�ZLWKLQ�WKH�VDPH�$163��

The problems associated with the monopoly status of ANSPs are reinforced by ownership and governance structures. Many ANSPs are government departments or are in some other way publicly controlled. This can mean that they RIWHQ�LQFHQWLYLVHG�WR�PHHW�SROLWLFDO�DQG�6WDWH�GULYHQ�REMHFWLYHV��DQG�DUH�PRUH�DQVZHUDEOH�WR�WKH�demands of their government owners than to the needs of the airline customers.

Explaining the performance issues of the ATM industry

The ATM Policy Institute

Headline

• StrongincentivesforANSPstoimprovetheircostefficiencyandreducetheirprices,withoutcompromisingsafety

• ANSPsdriventodifferentiatethemselvesbyserviceofferingandqualityandtoadapttotheneedsoftheirusers

• Greatermanagerialandfinancialauthorityensuresafocusoncustomerserviceandperformance,andgoodgovernance

Thebenefitsofliberalisation

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The ATM Policy Institute

Liberalisation of the ATM industry may drive much of the necessary changeGreater liberalisation of the ATM industry would help address many of the performance issues facing ANSPs. Liberalisation would mean greater competition and the relaxation of ownership and FRQWURO�UXOHV��7RJHWKHU��WKHVH�ZRXOG�EULQJ�WKH�industry into the 21st�FHQWXU\��DQG�HQFRXUDJH�D�PRUH�FXVWRPHU�IRFXVVHG�$70�VHUYLFH��

7KHUH�LV�VLJQL¿FDQW�SUHFHGHQW�IRU�WKH�OLEHUDOLVDWLRQ�of industries that were previously considered to be PRQRSROLHV��7KLV�LQFOXGHV�WKH�WHOHFRPPXQLFDWLRQV��HQHUJ\�DQG�UDLO�LQGXVWULHV�LQ�PDQ\�SDUWV�RI�WKH�ZRUOG��as well as the airline industry (see the Appendix for more information). The success of liberalisation LQ�WKHVH�LQGXVWULHV��FRPELQHG�ZLWK�WHFKQRORJLFDO�DGYDQFHV�LQ�$70���VXFK�DV�WKH�HPHUJHQFH�RI�VDWHOOLWH�EDVHG�V\VWHPV���VWURQJO\�VXJJHVWV�WKDW�WKHUH�LV�VLJQL¿FDQW�SRWHQWLDO�IRU�WKH�OLEHUDOLVDWLRQ�RI�the ATM industry.

Liberalisation has a high potential to disrupt the ATM industry. Some ANSPs may consider this a WKUHDW��)RU�H[DPSOH��OLEHUDOLVDWLRQ�DQG�WKH�UHVXOWLQJ�competition may cause some concerns about the ULVNV�WR�MREV��WKH�YLDELOLW\�RI�VXSSO\�RI�$70�VHUYLFHV��SDUWLFXODUO\�LQ�XQHFRQRPLF�DLUVSDFH���DQG�VDIHW\�VWDQGDUGV��6LPLODU�FRQFHUQV�ZHUH�YRLFHG�LQ�WKH�OHDG�up to the liberalisation of the airline industry; the vast majority of which later proved to be unfounded.

Liberalisation will provide opportunities for those ANSPs who are willing to adapt and innovate. This LQFOXGHV�RSSRUWXQLWLHV�WR�H[SDQG�LQWR�QHZ�PDUNHWV��WR�ZRUN�FROODERUDWLYHO\��DQG�WR�VHFXUH�UHZDUGV�IRU�better serving airline customers. Learning from the H[SHULHQFH�RI�OLEHUDOLVDWLRQ�LQ�RWKHU�VHFWRUV��DQG�therefore ensuring the process of liberalisation is XQGHUWDNHQ�LQ�D�FRQWUROOHG�PDQQHU��ZLOO�DOVR�KHOS�HQVXUH�WKDW�PDQ\�RI�WKH�ULVNV�DVVRFLDWHG�ZLWK�liberalisation can be addressed and mitigated.

Liberalisation RI�DLU�WUDI¿F�

management

Corporatised ANSPs,operating independent

of government

Competitionfor selected

ATM services

The ATM Policy Institute

HeadlineWhatcouldcompetitionlooklike?

Unbundleddata,trainingandinfrastructureservices

TerminalAirNavigationServices(TANS)

Franchiseden-routeservices

Flowmanagement

OceanicservicesLongerterm,technologicalchangesenablecompetitionelsewhere

The ATM Policy Institute

Headline

Effectiveperformance-basedregulationofANSPsinareaswherecompetitionisnotcurrentlyfeasibleorpoliticallyacceptable,orwhereanANSPstillretainssignificantmarketpower

Continuingroleforgovernmentsandtheirregulatorsinareasofsafetyandstandards,andmilitaryuseofairspace

Theneedforeffective performance-basedregulation

The ATM Policy Institute

Headline

TheliberalisationofATMwillnotbeaneasytaskduetoindustry’sinnateconservatism,desiretopreservethestatusquo,institutional,regulatoryandlegalbarriers,andalackofpoliticalwill

Butthatdoesnotmeanitisnotaworthwhilegoal

TheATMPolicyInstitutewill:

• leadthedebateonhowtoimprovetheefficiencyandefficacyofATMthroughmarketliberalisation

• clearlycommunicatehowtoliberalise ATMandthebenefitsfromdoingso

• bringtogetherstakeholdersfromdifferentpartsoftheindustrywithacommonobjective

Ourpurpose

The ATM Policy Institute

HeadlineCurrent members

The ATM Policy Institute

Headline

• Continualworkprogramme ofresearchandanalysisonissuesrelatedtoliberalisation,includingtechnicalandpracticalissuesthatmustbeaddressedbeforecompetitioncanbeintroducedinsomeareas

• Wewillbepublishingdetailedanalysisofhowbesttoliberalise variousaspectsoftheATMserviceovernextsixmonths

• HostingworkshopinAutumn2017

Whathappensnext?

The ATM Policy Institute

HeadlineContact

www.atmpolicy.aero

TheATMPolicy InstituteRuedelaGare171260Nyon+41-22-363-0633