UK Irish Functional Airspace Block FAB Lawrence Hoskins Managing Director NATS 12th January 2006

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UK / Irish Functional Airspace Block
(FAB)Lawrence HoskinsManaging Director
NATS12th January 2006
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Introduction European Context

• European ATM undergoing unprecedented reform,
  with SES legislation driving
• Separation of regulation from service provision
• Interoperability technology implementation plan
  via SESAR
• Revisions to current charging regime
• Rationalisation of airspace / operations via FABs
• UK at forefront of private sector model
• NATS well established as independently owned ANSP
• Licensed regulated in en-route / terminal
  approach contestable market for airport services
• ANSP technology rationalisation now underway
• Common systems e.g. SACTA co-developed by UK
  Spain ( other potential partners to join)
• Principle of improving service cost efficiency
  well supported
• But pace of change dependent upon complexity of
  accommodating range of views and perspectives of
  interested parties

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Introduction - UK / IRL FAB

• Progress Status of FAB discussions
• Solar Alliance report (Jan-Jun 05)
• Phase 2 activities (Sept 05-March 06)
• EC vision of introducing FABs to improve traffic
  flows in optimised airspace appears a feasible
  objective for UK / IRL
• UK-Ireland characteristics
• Common boundary history of operational
  cooperation (N Atlantic)
• Overlapping customer base
• Precedent for government and regulatory
  cooperation
• Shared commercial outlooks, language cultural
  ties
• Combined, UK Ireland FIRs would occupy 2 or 3
  position in Europe
• 13 by flight hrs, 11 by distance flown, 10 by
  FIR area

UK and Ireland is a natural first choice for both
parties
Source ACE 2003
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Current Arrangements

• Plan to consolidate from 6 ? 4 centres
• Swanwick (inc London TCC) from 07/08
• Prestwick (inc. Mchester) from 09/10
• Shannon
• Dublin
• Joint responsibility for Shanwick oceanic area
• Overlapping customer base of those flights in
  Irish airspace, 92 also in UK airspace
• North Atlantic (NA) traffic
• Fewer flights but more hours revenue
• Concentrated in time, variable in space
• Jetstream can move flows 120 miles N or S

Common North Atlantic traffic base to manage
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Solar Alliance Recommendations

• Include all UK and Irish airspace, inc Ocean
  (ICAO permitting)
• Maximise flexibility for traffic mgt. / route
  optimisation
• Avoid arbitrary vertical divisions between upper
  lower a/s
• Operational cost savings likely to be achievable
  through
• Consolidating North Atlantic transition zone
  (managed by Prestwick) to Shannon
• Consolidating Dublin TMA at Prestwick
• Transition costs low as responsibilities moved to
  where resources existi.e. minimise relocation of
  people infrastructure
• UK /Ireland FAB should not close doors to future
  co-operation with other neighbours
• FAB legislation encouragement of single
  integrated charging regime likely to be less
  appropriate than zone charges reflecting cost
  complexity of service provision

Prima facie case exists for establishing a UK /
Ireland FAB
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Current Process

• Objective validate Solar Alliance findings
• 5 joint NATS / IAA Workstreams
• (a) Operations Airspace (b) Charging
  Economic Regulation (c) Systems (d) HR /
  people(e) Co-ordination (business case, legal,
  etc)
• Ongoing stakeholder consultation
• Governments, regulators, users, others
• TEN-T funding (2m over next 18 months)
• Outputs
• Develop Business Case that identifies clear
  significant net benefits to users without
  prejudicing safety or service, in a form
  complimentary to existing investment capacity
  growth plans
• (Conditional on the above) Develop MoA for
  signature by ANSPs in March 06 with approval by
  States / regulators in July 06
• Develop implementation plan with clear
  objectives, milestones consultation plans.

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Findings to date (1)

• Joint Network Management
• What joint airspace, flow capacity management
  function across UK / Irish FIR
• Benefits smooth peaks across network, reduce
  flow restrictions, LR speed control
• Joint Airspace Design and Planning
• What common route system design, sectors can be
  reconfigured to meet demand
• Benefits enable by-pass longer direct routes
  (ultra high sectors)
• Relocation and integration of sectors
• What 2 high level Scottish sectors ? Shannon
  Dublin Low East sectors ? Prestwick or Swanwick
• Benefits staff savings (modest) training
  savings

Confidence that holistic joint planning can
offer early tangible service benefits
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Findings to date (2)

• CNS Infrastructure synergies
• What G-A and G-G comms networks control
  monitoring of remote sites
• Benefits procurement, maintenance staff
  savings reduced asset base
• Rationalisation of ancillary operational services
• What AIS, MET, Flight Plan reception across UK /
  Irish FIR
• Benefits staff procurement savings, improved
  service quality
• HQ and training synergies
• What Rationalise shared corporate services
• Benefits improved utilisation of facilities,
  cost savings, improved HQ services

Circa 81 ratio between NATS IAA scale limits
overhead savings achievable
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Charging (1)

• The most significant issue surrounds integration
  of charging where the current UK service charges
  are consolidated into one rate (covering
  multi-complexity tasks) compared to the current
  Irish charges which are lower complexity task
  based
• NATS / IAA charging criteria
• Simplicity, cost reflectivity (create right
  pricing signals), distribute charges equitably,
  ensure regulatory compliance, encourage efficient
  behaviour
• 2 options being assessed (with without oceanic
  area included)
• (a) Single charge for FAB or (b) Multi-tariff
  charging structure
• Initial view is that single charge does not
  address cost reflectivity complexity of service
  provision and is therefore unlikely to drive
  efficiency improvement
• Interim arrangement likely to be necessary in
  short term to enable benefits to be passed onto
  customers under existing charging regimes whilst
  reviewing optimum charging mechanisms for future

Effects of single FAB charge to be reviewed
against alternative of optimised zonal
arrangements
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Charging (2)
Min cost routing is via Strumble Min fuel
routing is via spine of UK Difference in routes
due to difference in overflight charges Min cost
route burns c. 1000kg more fuel (450) than min
fuel route but charges are 900 less
LHR-LAX Min Cost vs. Min Fuel Routing
Grey Min Fuel
Red Great Circle
Blue Min Cost
Source British Airways
Existing regime encourages sub-optimal routeings
constrains capacity flexibility
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Future Timetable

• 24 January 06 Next NATS / IAA Steering Group
  meeting
• Spring 06 Stakeholder Consultation
• Approval by NATS and IAA Boards
• Summer 06 Endorsement by UK and Irish Govts
  and Regulators
• Spring 07 Stage 1 Implementation (joint
  planning, etc)
• 2009 Stage 2 Implementation (airspace moves,
  etc)

Timetable dependent upon workstream findings
stakeholder consultation
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Conclusions

• NATS keen to participate in ongoing European
  rationalisation inc.development of FABs where
  these make viable economic sense where they are
  compatible with emerging technology capacity
  growth plans
• FABs not a capacity / service panacea but one
  element of overallplan to provide better,
  cheaper, more integrated service
• Charging issues sensitive and inevitably involve
  winners andlosers. Benefits of zonal charges
  vs. single integrated charge tobe carefully
  evaluated before formal proposals made. Short
  term contractual arrangements between ANSPs
  feasible
• FABs corporate structure are intrinsically
  linked !
• Depth of FAB will condition charging
  organisational solutions e.g. contractual vs.
  joint venture vs. merger
• Customer engagement stakeholder alignment is key

UK / Ireland FAB a first for Europe