National Air Traffic Services

1
National Air Traffic Servicesa Single Sky for
Europe
Institute of Insurance - 5 February 2004

• Hugh Westaway
• Strategy Regulation DirectorNational Air
  Traffic Services

2
This Presentation...

• What NATS does today
• Its Structure Approach
• The Future ...and the Single European Sky

3
What Does NATS Do ?

• En-Route ATC Service in UK airspace (c. 450m
  p.a.)
• ATC services at 14 UK Airports (c. 80m p.a.)
• Oceanic Service to the eastern Atlantic (c. 20m
  p.a.)
• A Joint and Integrated Service with the RAF(NATS
  provides key military infrastructure under
  contract)
• Manages operates a UK navigation network
• Operates within an internationally-recognised
  regulatory environment - ICAO, Eurocontrol, CAA
  etc
• 2 million flight movements p.a. employs 5,000
  staff

4
A key part of Europes Air Traffic System
Airspace Controlled by NATS
London Scottish FIRs 1 million km2 - 11 of
Europes airspace
2.2 million km2
5
NATS Public Private Partnership (PPP)

• An enterprise partnership between the private
  sector and Government
• Strategic direction set through a business plan
  approved by the Airline Group,Government and BAA
• Managed on business lines with private sector
  investment control

The Airline Group 42
Government 49
BAA 4
Employees 5
6
PPP - Benefits
Delivering what our customers want...

• Separation of Regulation and Service Provision
• Strengthens safety management system through
  independent regulation, encouraging performance
  transparency
• Closer relationship with Customers
• Strong customer influence on NATS performance,
  involvement in capital expenditure choices
• Keeping customers on-board in highly regulated
  environment
• Commercially-based Investment
• Need to satisfy Capital Market that Projects are
  worth doing
• Incentives for operating cost efficiency
• Performance based charges (price caps volume
  risk) replacing traditional cost pass through
  process

7
PPP - The Challenges

• Financial Structure
• Severely tested by traffic downturn
• Enabled NATS to deploy a Private Sector Response
• Major Restructuring now complete
• Customer Ownership
• Broader stakeholder base
• Stronger customer objectives
• New discipline for Air Traffic Service Providers
• Living within an RPI -X price cap
• Service incentives penalties

8
NATS - Current Situation

• Safety performance maintained
• Significant improvement in delay performance
• Fast changing market - flights up, income down
• Dramatic shift in demand - ...decline in North
  Atlantic traffic replaced by growth in low cost
• Dramatic change in customer dynamics - ...speed
  of airline reaction to market has increased
  volatility of demand on ATC providers

9
The Future
People, Systems Investment to handle 3 million
flights in 2010-12 Growth Single European Sky
Industry Deregulation
10
Future ATC Capacity - A Significant Challenge
Increasing Complexity of the ATC Task

• Current capacity approaches will have diminishing
  returns
• Creating more airspace sectors is manpower
  intensive
• Expected to deliver decreasing benefits in
  busiest airspace from c. 2007/8 ?
• Strategic route to improved safety more
  airspace capacity through new systems platform
  automation tools
• A significant Technological Human challenge

No other country in Europe has same complexity,
or faces the same capacity challenge, in the same
time-scales, as NATS
11
People Investment
...to handle 3 million flights in 2010-12

• People
• More controllers automation tools to enhance
  productivity
• Working Together initiative to secure real
  engagement in meeting the main challenges of the
  business
• 10 Year, 1bn Investment Plan in Safety
  Capacity
• Replacing ATC Centre systems updating ATC
  infrastructure
• Integrated into the European Single Sky
• Market-Driven Capital Investment - customer
  expectation for capacity ahead of demand (not
  catch-up) value for money from investment

12
Two Centre Strategy
Scottish ACC (ScACC) Shanwick Oceanic
ACC PRESTWICK
To Prestwick in 2009 (in new Centre)
Scottish FIR
London FIR
Manchester ACC (MACC)
London Terminal (LTCC) London Military(ACC)
WEST DRAYTON
London ACC (LACC) SWANWICK
To Swanwick in 2007
13
European Air Traffic Management (ATM)Planning
for the Future ?

• ATM Strategy for 2000 is Europes master
  plan for doubling ATM capacity by 2020
• No notion that the current approach / structure
  adequately provides for growth
• Airlines not persuaded
• Travelling public sceptical
• No notion that Governments have the drive to
  achieve a better solution
• Progress will only be made through collaboration
• airlines, airports ATC working together
• to put pressure on Governments and the EC

14
Single European Sky

• A reaction to the significant inefficiencies
  costs in Europes fragmented ATM system
• ATM unit costs c. 70 higher in Europe than USA
• Single European Sky is a major catalyst for
  change
• Provides framework for rationalising ATM service
  delivery organisation to deliver improved
  services economies of scale
• EC legislation in place in late 2003

15
Commercial ATC - Driving Change in Europe
Politics Practice
Politicians set goals
ATC Providers have to deliver
Single Sky - Key Areas

• Functional Blocks of Airspace
• Flexible Use of Airspace
• Interoperability of Systems

Commercially-minded ATC Providers are taking the
lead in finding solutions - through
collaboration, co-operation technology
16
Commercial ATC Providers are Delivering...

• NATS is working with other main ATC Providers on
  collaborative approaches - e.g.
• UK, Germany, Spain - iTEC collaboration on
  Advanced FDP, automation tools
• UK Spain - Systems Procurement
• UK, Canada Ireland - North Atlantic Oceanic ATS
• UK Canada - Airport ATS
• UK Germany - High Level Highway into Europe
• UK, France, Germany and Spain - Future ATM
  Concepts
• Impetus to collaborate is stronger among
  Commercial ATC Providers
• Brings disciplines of the market place - e.g.
  Incentives to deliver and Penalties for failure
  to deliver

17
Single European Sky
What taking the lead means for NATS...

• Influencing UK government policy on SES
• Working with technology partners (AENA DFS) on
  European interoperability
• Working with neighbouring ANSPs on functional
  blocks of airspace
• Working with ANSPs on better management of
  European centralised functions e.g. European
  AIS Database, EGNOS, CFMU, CRCO, etc.

all providing opportunities for Growth
18
In summary, I hope I have explained .

• Who we are and how we operate
• How our structure approach provides a sound and
  robust blueprint for other air traffic service
  providers
• but above all
• how through collaboration, innovation and a
  stronger commercial focus, NATS will play a
  leading role in air traffic management in Europe
  and around the world