Two Steps Forward and One Step Back on SES - says IATA Director General

The International Air Transport Association (IATA) praised the European Commission for pushing forward Europes long-delayed Single European Sky (SES) with two important achievements this week: (1) the signing of the treaty establishing the functional airspace block (FAB) for Belgium, France, Germany, Luxembourg, the Netherlands and Switzerland (known as FAB Europe-Central or FABEC), and (2) the introduction of pan-European performance targets. At the same time, IATA severely criticized governments for setting the cost efficiency performance target at a watered-down 3.5% annual improvement for 2012-14.
Taking two steps forward and one step back is not going to deliver the SES.  We need much tougher cost reduction targets driven by political leaders with a vision for building a more competitive Europe, said Giovanni Bisignani, IATAs Director General and CEO.

Two Steps Forward

The SES achieved two major milestones this week. For the first time governments accepted performance targets to drive efficiencies in Europes air traffic management (ATM) system. This ends the concept of we spend and airlines pay as the modus operandi for Europes 34 air navigation service providers (ANSPs). The second is the signing of a treaty to formalize FABEC. This will be Europes third FAB and the handle the largest traffic volume of the nine planned European FABs. Both milestones move us closer to fulfilling the decades-old dream of the SES, said Bisignani.
SES has five main targets to achieve by 2020: a 50% reduction in the cost of European ATM, a three-fold increase in airspace capacity, an improvement in the safety record by a factor of 10, a reduction in average delays to an average of 30 seconds, and a 10% reduction in the effects of aviation on the environment.

One Step Back
A meeting of the Single Sky Committee on Friday concluded an agreement giving an annual 3.5% cost reduction target for the 2012-14  period to European ANSPs. This is watered down from the 4.5% cost reduction target recommended earlier this year by Europes independent Performance Review Board (PRB).

 The watered-down 3.5% target is a major disappointment. It is not a serious challenge to ANSPs to reduce costs. Instead it is a license for them to continue with business as usual over the next three years. Targets need to drive change, not support the status quo. Given the PRBs assumption of 2.7% traffic growth and inflation of 1.9% over the 2012-14 period, ANSPs can meet the 3.5% cost reduction target simply by containing their costs. To drive real change and achieve the full SES by 2020, we will need much tougher targets from 2015, said Bisignani.

Political Leadership Needed
An average flight in Europe faces ATM costs of EUR 771 compared to EUR 440 in the US. The SES is meant to improve Europes competitiveness by closing this gap with a goal of a 50% reduction in European ATM costs by 2020.

ATM in Europe is an uncompetitive mess. Introducing performance targets or re-grouping the administration of ANSPs will not deliver meaningful results without challenging targets. SES will be successful when I see SESs long-promised EUR 5 billion cost savings. Until then, Europe has a EUR 5 billion competitive disadvantage that is felt by everybody who travels or ships on the continent. That is why we need political leaders to step in and drive the process with a vision to restore Europes competitiveness, said Bisignani.


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