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EUROPEAN ORGANISATIONFOR THE SAFETY OF AIR NAVIGATION
EUROCONTROL EXPERIMENTAL CENTRE
EEC Note No. 8/99
Project GEN-4-E2
E C O N O M Y
P E R F O R M A N C E
PRF1200
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
0.9 0.95 1 1.05 1.1 1.15 1.2
Issued: June 1999
The information contained in this document is the property of the EUROCONTROL Agency and no part should bereproduced in any form without the Agency’s permission
The views expressed herein do not necessarily reflect the official views or policy of the Agency.
RREEPPOORRTT DDOOCCUUMMEENNTTAATTIIOONN PPAAGGEE
ReferenceEEC Note No. 8/99
Security ClassificationUnclassified
OriginatorEEC - PRF(Performance and Economy Research)
Originator (Corporate author) Name/Location :EUROCONTROL Experimental CentreB.P.15F-91222 Brétigny-sur-Orge CEDEXFRANCE.Telephone: +33 (0) 1 69 88 75 00
Sponsor Sponsor (Contract Authority) Name/LocationEUROCONTROL AgencyRue de la Fusée, 96B-1130 BRUXELLESTelephone: +32-(0)2-729 90 11
TITLE:COST OF THE EN-ROUTE AIR NAVIGATION SERVICES IN EUROPE
AuthorJ. C. Hustache
Date06/99
Pages27 +iv
Figs25
Tables12
Annex1
References9
EATCHIP Taskspecification
-
Project
GEN-4-E2
Sponsor Task No.-
PeriodJan-March
1999
Distribution Statement :(a) Controlled by : PRU(b) Special Limitations (if any) : None(c) Copy to NTIS : No
Descriptors (keywords) :
1998, capacity, costs, performance, unit rate, flight, kilometre, sector, distance, ATC, CRCO,FAP, MTOW, delay cost
Abstract :The study is performed in support of the Performance Review Unit.Subject of the study is the investigation of the economic performance for the European ATCproviders at the national level.
Objective: The objective of the note is to provide an evaluation of the differences in cost level throughout Europe.Methodology: Considering four different indicators we try to highlight the most expensive areas in 1998.
This document has been collated by mechanical means. Should there be missing pages,please report to:
EUROCONTROL Experimental CentrePublications Office
B.P. 1591222 – BRETIGNY-SUR-ORGE CEDEX
France
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
E C O N O M Y
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PRF1200
1300
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iii
Table of Contents
ABBREVIATIONS ______________________________________________________________ IV
1. INTRODUCTION ____________________________________________________________ 1
1.1 OBJECTIVE ________________________________________________________________ 11.2 SCOPE ___________________________________________________________________ 11.3 ASSUMPTIONS______________________________________________________________ 1
2. AIR TRANSPORTATION COST IN EUROPE______________________________________ 2
2.1 AIRLINE COST DISTRIBUTION ON EUROPEAN ROUTES __________________________________ 22.2 AERONAUTICAL CHARGES _____________________________________________________ 32.3 EN-ROUTE CHARGES _________________________________________________________ 4
2.3.1 States costs by type ____________________________________________________ 42.3.2 States costs by category ________________________________________________ 42.3.3 Eurocontrol costs by type ________________________________________________ 52.3.4 Eurocontrol costs by service unit __________________________________________ 5
3. ATC COST BREAKDOWN BY STATE ___________________________________________ 6
3.1 COST BY CATEGORY _________________________________________________________ 63.2 COST BY TYPE______________________________________________________________ 7
4. COST INDICATORS _________________________________________________________ 8
4.1 UNIT RATES _______________________________________________________________ 84.2 COST PER FLIGHT __________________________________________________________ 104.3 COST PER KILOMETRE _______________________________________________________ 114.4 COST PER SECTOR _________________________________________________________ 12
5. SYNTHESIS _______________________________________________________________ 13
6. TOWARD A PERFORMANCE APPROACH ______________________________________ 18
6.1 LONG TERM TRENDS ________________________________________________________ 186.2 FIRST STEPS ON THE FIELD OF COMPLEXITY ________________________________________ 206.3 COST FOR CAPACITY AND DELAY ________________________________________________ 22
7. CONCLUSION _____________________________________________________________ 23
8. REFERENCES _____________________________________________________________ 25
ANNEX 1 _____________________________________________________________________ 26
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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PRF1200
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iv
Abbreviations
ACC Area Control CentreAIS Aeronautical Information ServicesATC Air Traffic ControlATM Air Traffic ManagementATS Air Traffic ServicesCFMU Central Flow Management UnitCIM Capacity Indicator ModelCIP Convergence and Implementation ProgrammeCOM CommunicationsCRCO Central Route Charges OfficeEATCHIP European ATC Harmonisation and Integration ProgrammeEEC Eurocontrol Experimental CentreIANS Institute of Air Navigation ServicesIATA International Air Transport AssociationMAAS MaastrichtMET MeteorologyMTOW Maximum Takeoff WeightUAC Upper Area Control CentreUR Unit Rate
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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1
1. Introduction
The study is performed in support of the Performance Review Unit.Subject of the study is the investigation of the economic performance for the European ATCproviders at the national level.
1.1 ObjectiveThe objective of the study is to provide an evaluation of the differences in en-route ATCcost levels throughout Europe for the year 1998. Evaluation shall be based on a set ofindicators. These are:• Cost per service unit• Cost per flight• Cost per kilometre• Cost per sector
1.2 ScopeThe study covers all those CRCO member States that declared a cost for 1998.
1.3 Assumptions
Generally:• The study uses the 1998 forecasted cost figures provided to the CRCO. (Reporting
Table N°4 transferred in Euro)• The costs represent the en-route service only, as defined in the “Principles for
establishing the cost-base for route facility charges and the calculation of the unit rates”(Ref. /1/).
• The numbers of flights and kilometres for 1998 are those recorded by the CRCO.• The airline cost distribution is assumed to remain constant from 1997 to 1998.
Exceptions:• Slovenia and Greece did not provide a detailed cost breakdown for 1998. Therefore the
latest cost breakdown available, respectively 1996 and 1997, was used.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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2. Air transportation cost in Europe
2.1 Airline cost distribution on European routesThe IATA report “Airline Economic Results and Prospects 1996-1997” (Ref. /2/), publishesthe following cost breakdown for “airlines within Europe” valid for the year 1997:
General andadministrative
6%
Fuel and Oil7%
Aircraft costs12%
Maintenance9%
En route charges5.6%
Aeronauticalcharges
7%
Crew12%
Passenger service8%
Ticketing, sales,and promotion
17%
Station and groundhandling
16%
The total chargeable cost for the European en-route ATC service was 3.828 billion Euro in1998. Derived from the 5.6% on en-route charges, equals 3.828 billion Euro, the followingtotal cost for the air transportation in Europe can be estimated: 68.356 billion Euro.
And in detail:
Airline Cost BreakdownShare on
Airline Cost (%)
Yearly Cost inEurope(MEuro)
Crew 12.1 8,271Passenger service 8.0 5,468Ticketing, sales, and promotion 16.8 11,484General and administrative 6.4 4,375Fuel and Oil 7.3 4,990Aircraft costs 12.4 8,476Maintenance 9.2 6,289En route charges 5.6 3,828Aeronautical charges 6.6 4,511Station and ground handling 15.8 10,800
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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2.2 Aeronautical charges
The aeronautical charges represent:
- runway charge- passenger charge- transfer passenger charge- security fee- aircraft parking- air bridge- terminal navigation- noise charge
The following distribution of the airport operating cost is an average based on the 11 annualreports (1996) of the following European airports: Frankfurt, Munich, Dusseldorf, Paris,Bale-Mulhouse, Amsterdam, Zurich, Manchester, Birmingham, Dublin, Milan.
Depreciation20%
Others11%
Material cost and services
29%
Staff40%
If we apply the 6.6% aeronautical charges on the total cost for air transportation in Europe,the following breakdown for the aeronautical charges can be estimated:
Airline Cost BreakdownYearly cost in Europe (Meuro)
Aeronautical charges 4,511Material cost and services 1,304
Personnal exp. 1,818Depreciation 884
Others 505
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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2.3 En-route chargesThe en-route charges represent 5.6% of the total airline costs. The costs for the serviceinclude the costs of the national ATC provider (up to 91.4%) and the cost of Eurocontrol (upto 8.6%).
2.3.1 States costs by typeThe following distribution is an average throughout all the CRCO member States
2.3.2 States costs by category
Staff52%
Depreciation15%
Interest7%
Operating cost 22%
Others1%
ATS64%
Training5%
AIS3%
MET9%
Administration13%
Others1%
Studies and tests5%
Airline Cost BreakdownYearly cost in Europe (Meuro)
States by Type 3,498Staff 1,803
Depreciation 522Operating cost (maint., energy, etc.) 874
Interest 251Others 48
Airline Cost BreakdownYearly cost in Europe (Meuro)
States by category 3,498ATS 2,252AIS 89
MET 308Training 165
Studies and tests 189Administration 456
Others 38
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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2.3.3 Eurocontrol costs by type8.63% of the en-route charges are attributed to services provided by Eurocontrol (includingMaastricht). The Eurocontrol costs can be broken down by type and by service unit:
2.3.4 Eurocontrol costs by service unit
Staff67%
Operating cost10%
Depreciation18%
Interest5%
MAAS UAC22%
IANS3%
EEC13%
CFMU20%
Logistic19%
EATCHIP23%
Airline Cost BreakdownYearly cost in Europe (Meuro)
Eurocontrol by Type 330Staff 232
Operating cost 33Depreciation 61
Interest 19Others -14
Airline Cost BreakdownYearly cost in Europe (Meuro)
Eurocontrol by Service Unit 330MAAS UAC 72
IANS 9EEC 44
CFMU 67Logistic 62
EATCHIP 76Others 0
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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3. ATC cost breakdown by State
To establish the cost base for invoicing the airspace users, each CRCO member Statedeclares at the CRCO the total costs of its ATC services, with a breakdown by category(ATS/COM, AIS, MET, studies and tests, administration, training) and by type (staff,operating costs, depreciation, interest).
According to the “Principles for establishing the cost-base for route facility charges and thecalculation of the unit rates” (Ref. /1/), the declared costs for the ATC service should onlyinclude the en-route part of their service.
The cost breakdowns given in this section are based on the national costs (excludingEurocontrol/Maastricht costs and other CRCO adjustments).
3.1 Cost by category
0%
20%
40%
60%
80%
100%
Austria
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denm
ark
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyMalt
a
Nethe
rland
s
Norway
Portug
al
Roman
ia
Santa
Mar
ia
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turke
y
United
King
dom
other
MET
AIS
Administration
Studies and tests
Training
ATS
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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3.2 Cost by type
0%
20%
40%
60%
80%
100%
Austri
a
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croati
a
Cypru
s
Czech
Rep
.
Denmark
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyM
alta
Nethe
rland
s
Norway
Portu
gal
Roman
ia
Santa
Mar
ia
Slovak R
ep.
Sloven
iaSpa
in
Sweden
Switzer
land
Turkey
United K
ingdo
m
Other
Interest
Depreciation
Operating
Staff
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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4. Cost Indicators
Cost indicators relate the cost of a service with its production. This chapter uses fourdifferent indicators to analyse the variance and characteristics of the capacity costthroughout Europe.
The CRCO en-route charges include a contribution of each State to the Eurocontrol budget.This contribution is calculated based on factors such as gross national product and totalcost from the previous years. This contribution was excluded in the computation of the costindicators since the gross national product has no relation to operating factors.
However, the production of Belgium-Luxembourg, Germany, and the Netherlands computedby the CRCO do include the services provided by Maastricht. As a consequence,computing cost indicators for those countries requires to add their contribution to Maastrichtbudget (72 Meuro in 1998).The sharing keys for the contribution of each State are approved by the Provisional Council(Ref. /3/). The percentages used in this study are 38% for Belgium-Luxembourg, 42% forGermany, and 20% for the Netherlands.
4.1 Unit rates
The unit rate is the most common indicator, as it is the one used to invoice the airspaceusers. It is the total chargeable cost divided by the number of service units. The number ofservice units is a function of the maximum takeoff weight (MTOW).
Number of service units = Distance/100 x sqrt (MTOW / 50)
The formula is designed to obtain fair service prices attributed to the whole range of aircraftsizes in the European airspace. According to the CRCO principles, the total cost of theservice per State shall be equal to its total price. However, the price of a service unit doesnot consistently reflect the cost for the capacity unit, since the cost of a capacity unit israther independent of the weight of the aircraft. As a consequence, States with the sametotal costs, and the same number of kilometres controlled, charge different prices for theirservice units if the weight of the traffic controlled is different.
In conclusion, the unit rate is a price rather than a cost indicator. Evaluation of costefficiencies throughout Europe on the base of the unit rates has to be taken with care.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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Unit rates
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
Austria
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denm
ark
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyM
alta
Nethe
rland
s
Norway
Portug
al
Roman
ia
Santa
Mar
ia
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turke
y
United
King
dom
Eu
ro 1
998
Maximum Take-off weight
0
50
100
150
200
250
Austria
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croati
a
Cypru
s
Czech
Rep
.
Denmar
k
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyMalt
a
Nether
lands
Norway
Portug
al
Roman
ia
Santa
Maria
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turke
y
United
King
dom
Met
ric
ton
nes
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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4.2 Cost per flight
This indicator may depend on the size of the airspace: longer distances may require morecontroller workload resulting into higher cost per flight. We assume that cost per flight givesan advantage to smaller airspace.
Cost per flight
0
50
100
150
200
250
300
350
400
Austria
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denm
ark
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyM
alta
Nethe
rland
s
Norway
Portug
al
Roman
ia
Santa
Mar
ia
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turke
y
United
King
dom
Eu
ro 1
998
Average distance flown
0
200
400
600
800
1000
1200
1400
Austri
a
Belgium-L
ux.
Bulgaria
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denmar
k
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyMalt
a
Nethe
rlands
Norway
Portu
gal
Roman
ia
Santa
Mar
ia
Slovak R
ep.
Sloven
iaSpain
Sweden
Switzerla
nd
Turke
y
United
King
dom
Kilo
met
res
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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4.3 Cost per kilometre
To assess the differences in cost performance this indicator appears to be better than theunit rate or the cost per flight.However, the cost per kilometre may depend on the ATC complexity (traffic density, conflictprobability, etc.). Smaller countries / centres, for example, may require more external co-ordination resulting into higher workload and thus cost per kilometre controlled.
Cost per kilometre
0.00
0.20
0.40
0.60
0.80
1.00
1.20
Austria
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denm
ark
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyMalt
a
Nethe
rland
s
Norway
Portu
gal
Roman
ia
Santa
Maria
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turke
y
United
King
dom
Eu
ro 1
998
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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4.4 Cost per sector
The cost per sector could be a better indicator than the cost per kilometre because it takesinto account the extra co-ordination workload (complexity) and the number of controllersneeded to control a flight within the airspace.However, the number of sectors used here are the maximum number of sectorssimultaneously operable. (Ref. /4/) This figure represents more the cost for the maximumpotential capacity rather than the actually exploited capacity.
Cost per sector
0
5,000
10,000
15,000
20,000
25,000
Austria
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denm
ark
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyM
alta
Nethe
rland
s
Norway
Portug
al
Roman
ia
Santa
Mar
ia
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turk
ey
United
King
dom
Th
ou
san
ds
Eu
ro 1
998
Number of sectors
0
10
20
30
40
50
60
70
80
90
Austri
a
Belgium
-Lux
.
Bulgar
ia
Canar
ias
Croat
ia
Cypru
s
Czech
Rep
.
Denmar
k
Franc
e
Germ
any
Greec
e
Hunga
ry
Irelan
dIta
lyM
alta
Nethe
rland
s
Norway
Portu
gal
Roman
ia
Santa
Mar
ia
Slovak
Rep
.
Sloven
iaSpa
in
Sweden
Switzer
land
Turke
y
United
King
dom
Max
imum
num
ber
of s
ecto
rs s
imul
tane
ousl
y op
erab
le
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5. Synthesis
The synthesis exercise is made by a comparison of the States performance for all costindicators, after normalisation of the data (the average value of each indicator is set to 100and is shown as a dotted red square).All the countries, which are above the average for all indicators, are considered as “highcost countries” (Class 1). Conversely, all countries below the average for all indicators areconsidered as “low cost countries” (Class 2).
Class 1 : High costs Class 2 : Low costsBulgaria CroatiaCanaries Czech RepublicFrance DenmarkItaly GreeceUnited Kingdom Ireland
MaltaNorwaySloveniaSweden
0
20
40
60
80
100
120
140
160
180
KM
FlightSector
Bulgaria
Canarias
France
Italy
United Kingdom
Average
• United Kingdom has one of the clearest positions with all cost indicators more than 60%higher than the average.
• Spain Canaries position compared to the continental part of Spain is quite surprising,the cost per kilometre being 25% higher in the Canaries.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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• Italy and France have similar indicators. One can observe a very high cost per flighteasily explainable by longer distances controlled (more than 400 km in average for bothcountries) whereas the other costs are just above the average.
• Bulgaria appears also to be a very expensive country, especially when we look at thecost per sector and per kilometre. However, it is possible that Bulgaria suffers from thecrisis in Ex-Yugoslavia, which might impact the level of traffic, obliging then to work atover-capacity.
0
20
40
60
80
100
120
140
160
180
KM
FlightSector
Croatia
Czech Rep.
Denmark
Greece
Ireland
Malta
Norway
Slovenia
Sweden
Average
In Class 2, some big cost differences exist, but without establishing any distinction ofperformance, it is interesting to notice that there is some geographical coherence within thisclass.
• Scandinavia, with Denmark, Sweden, and Norway. They would be disadvantaged if theunit rates were considered, because their traffic mix is lighter than the Europeanaverage.
• Central Europe, with Croatia, Czech Republic, and Slovenia.
• The southern border of the Mediterranean area, with Greece and Malta. Because of thelong distance flown (522 Km in average), Greece should have a clear disadvantage forthe cost per flight, but it is not observed. This good level of the cost indicators couldnonetheless be an obstacle to the delay performance which is problematic, as shown inthe Capacity Plan 99 (Ref./5/).
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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Class 3 : Low cost per flight with relative high cost per kilometreBelgium-LuxembourgCroatiaNetherlandsSlovak RepublicSloveniaSwitzerland
0
20
40
60
80
100
120
140
160
180
KM
FlightSector
Belgium-Lux.
Croatia
Netherlands
Slovak Rep.
Slovenia
Switzerland
Average
As seen in section 5, smaller countries should be advantaged for the cost per flight andslightly disadvantaged for the cost per kilometre. Belgium, Switzerland, and SlovakRepublic are very representative of this situation.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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Class 4: Relatively high cost per sector compared to the cost per kilometreCyprusHungaryPortugalSanta MariaTurkey
0
20
40
60
80
100
120
140
160
180
KM
FlightSector
Cyprus
Hungary
Portugal
Santa Maria
Turkey
Average
• Turkey shows an outstanding set of indicators. It is the largest airspace after SantaMaria. The few sectors for so large a country denote a particular organisation ofcontrolled flows. It can be noticed that the cost breakdown for Turkey, by category or bytype, is also atypical (section 3), and that the cost evolution shows a drastic increase in1996. (section 6)
• Cyprus and Hungary have a similar set of competitive indicators except for the cost persector.
• As Santa Maria is an oceanic centre, probably the structures of the flows require fewersectors, which could explain the high cost per sector. On the other hand, the longestdistances controlled (1,230 km) could justify the high cost per flight.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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Class 5: Unclassified countriesAustriaGermanyRomaniaSpain
0
20
40
60
80
100
120
140
160
180
KM
FlightSector
Austria
Germany
Romania
Spain
Average
No clear characteristics are coming out of the remaining countries.• Continental Spain has a relatively high cost per flight compensated by a lower cost per
kilometre. The difference of cost with the Canaries remains unexplained.• Germany is really close to the “high cost” class. Only the cost per sector is below the
average. Actually, Germany is the country with the highest number of sectors.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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6. Toward a performance approach
6.1 Long term trendsOnly the countries with at least 5 years history are shown. An exception is made forSlovenia because the evolution of its cost per kilometre during the last three years isparticular. The trends are inflation-adjusted until 1997, and as forecasted by the CRCO for1998.
Cost per kilometre (inflation adjusted, Euro 1997) Countries with the lowest variations
0
0.2
0.4
0.6
0.8
1
1.2
1.4
91A 92A 93A 94A 95A 96A 97A 98F
Germany France Netherlands Ireland Spain
Santa Maria Greece Cyprus Hungary
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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19
The majority of the States produce an ATC service at a relatively stable cost per kilometre.Two situations can be observed for countries with higher variations of their service costs:• the cost per kilometre is either on a decreasing trend,• or increasing before 1994 and decreasing after.Turkey is an exception with a non-cyclic evolution compared to other States.The case of Slovenia shows the effect of a drastic increase in traffic when the total cost iskept almost constant.
Cost per kilometre (inflation adjusted, 1997 euro)Countries with the highiest variations
0
0.2
0.4
0.6
0.8
1
1.2
1.4
91A 92A 93A 94A 95A 96A 97A 98F
Belgium-Lux. United Kingdom Switzerland Portugal
Canarias Turkey Malta Slovenia
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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6.2 First steps on the field of complexity
The former paragraphs showed the differences or similarities of the cost levels and theirevolution. Now, we try to approach a more performance / efficiency related domain.Complexity indicators are particularly difficult to estimate, especially when we work at theNational level. This report does not aim to explain the cost of complexity and will thereforeremain at a general level.
Cost per kilometre and CIP classification
0.00
0.20
0.40
0.60
0.80
1.00
1.20
United
King
dom
Belgium
-Lux
.
Bulgar
ia
Austri
a
Slovak
Rep
.
Switzer
land
Italy
Germ
any
Franc
e
Canar
ias
Turke
y
Sloven
ia
Nethe
rland
s
Roman
ia
Denm
ark
Portu
gal
Spain
Malt
a
Sweden
Norway
Irelan
d
Croat
ia
Czech
Rep
.
Cypru
s
Greec
e
Hunga
ry
Santa
Mar
ia
Eu
ros
1998
Hight cost countries Low cost countries
RED at least one ACC with high complexity
BLUE low - medium complexity area
YELLOW at least one ACC with very low complexity
This chart helps to pinpoint some surprising performance relative to the supposedcomplexity. Actually, we observe that nearly all countries with a high cost per kilometre arealso countries classified as high complexity areas by EATCHIP.
The exceptions are:
• Netherlands• Bulgaria, Slovak Republic, and Spain Canaries.
Another general indicator for the relative “complexity” could be the percentage of overflightsper country (Ref. /6/). In that case, it is assumed that with less overflights, the traffic is morecomplex.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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21
This new picture could be interpreted in the following way:• North-east quarter: relatively complex and expensive countries• South-east quarter: less complex but still expensive countries• South-west quarter: less complex and cheap countries• North-west: relatively complex but cheap countries
Santa Maria
Hungary
Greece
Cyprus
Czech Rep.
Croatia
Ireland
Norway
Sweden
Malta
Spain
Portugal
Denmark
Romania
Netherlands
Slovenia
Turkey
Canarias
France
Germany
Italy
Switzerland
Slovak Rep.
Austria
Bulgaria
Belgium-Lux.
United Kingdom
0%
100%
0.00 0.40 0.80 1.20
% overflights
Cost per kilometre
All countries, except Greece, with a cost per kilometre lower than 0.45 Euro are alsocountries with more than 50% overflights. This could mean that a high percentage ofoverflights is a necessary, but not sufficient, condition to achieve a very good performancein cost per kilometre.The positions of Bulgaria and Slovak Republic, which were already identified to beexpensive relative to the EATCHIP complexity classification, are confirmed with this newindicator.
However, the percentage of overflights might depend on the geographic position of thecountry within Europe. For example, Austria, located at the centre of the studied area, haslogically more overflights than Norway, at the border. We believe this indicator is notsufficient to evaluate the complexity of an airspace. Ongoing studies aim to generate amore comprehensive picture of complexity, including elements such as traffic density,frequency of vertical movements, and conflict probability.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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22
6.3 Cost for capacity and delayTo be complete, the assessment of the cost performance must take into account theservice quality and, consequently, the user cost for delays.The delay costs are computed from the CFMU statistics of ATFM delays in 1998 and thelast estimates for one-minute ground delay made by IATA, (22 Euro).
Direct and indirect costs for en-route services
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
United
King
dom
Belgium
-Lux
.
Bulgar
ia
Austri
a
Slovak
Rep
.
Switzer
land
Italy
Germ
any
Franc
e
Canar
ias
Turke
y
Nethe
rland
s
Roman
ia
Denm
ark
Portu
gal
Spain
Sweden
Norway
Irelan
d
Croat
ia
Czech
Rep
.
Cypru
s
Greec
e
Hunga
ry
Santa
Mar
ia
Eu
ro (
1998
)
Delay cost per Km
Capacity cost per Km
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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23
7. Conclusion
The study investigated the significance of five cost indicators (CRCO unit rates, cost perflight, cost per kilometre, cost per sector, and cost per kilometre including delay). It could beshown that each of the indicators has its strengths and weaknesses. A stand-alone analysisof just one indicator may lead to wrong conclusions.
Therefore, the study tried to classify the States by their direct capacity cost performancebased on the three direct cost indicators (cost per kilometre, cost per sector, cost per flight).
Cost per flight (Euro)
Cost per sector (K Euro)
Cost per km (Euro)
Cost per km including delay costs
(Euro)Switzerland 82 5,928 0.73 1.31United Kingdom 335 15,211 1.07 1.20Belgium-Lux. 119 10,710 0.81 0.87Italy 299 8,210 0.73 0.83Netherlands 91 11,109 0.56 0.81France 304 8,998 0.67 0.80Austria 146 7,946 0.79 0.80Germany 216 5,820 0.70 0.77Bulgaria 223 12,934 0.79 0.79Slovak Rep. 124 4,467 0.75 0.77Greece 179 7,354 0.34 0.75Canarias 229 10,425 0.66 0.71Portugal 230 12,712 0.53 0.62Spain 230 8,919 0.52 0.62Turkey 312 20,944 0.59 0.60Slovenia 48 1,429 0.59 0.59Denmark 96 5,879 0.54 0.56Romania 255 5,263 0.56 0.56Malta 137 6,756 0.52 0.52Croatia 62 1,102 0.40 0.45Ireland 120 5,484 0.42 0.42Hungary 84 8,836 0.34 0.42Cyprus 107 9,618 0.35 0.41Czech Rep. 84 4,222 0.40 0.40Santa Maria 322 8,824 0.26 0.26Norway 116 4,153 0.49 0.54Sweden 162 4,706 0.50 0.55
LEGEND:
Hig
h co
mpl
exity
ar
eas
Med
ium
or
low
com
plex
ity a
reas
Ver
y lo
w
com
plex
ity
area
s
High Medium Low
Table 7.1
There are several reasons for high cost indicators:• High input prices• Complexity of the service provided• Inefficient operations
We then compared the capacity cost with the complexity of the service, an indicator usedby EATMP (ref. /4/), and observed a significant correlation. It appears that “complexity” isprobably the most important cost factor for the air navigation services.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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24
But currently complexity is a very vague and undefined parameter. Therefore, thePerformance Review Unit requested further investigations on complexity, its componentsand costs. The delivery of first results is planned for summer 1999.
FAP studies (Ref. /5/) have shown that from the airspace user point of view, the cost of theair navigation services includes direct and indirect costs such as the costs for delays andcosts for a low capacity exploitation.
Input prices (salaries, interest rates, energy cost, etc.)
Complexity (traffic density, conflict probability, etc.)Directcost factors
Inefficient operations (non-optimised sectorisation, procedure, equipment)
Low capacity exploitation (high capacity / demand ratio)Indirectcost factors Delays (low capacity / demand ratio)
Table 7.2
Consequently, the study introduces, besides the direct capacity cost indicators, a totalservice cost indicator (cost per kilometre including delay cost).
Table 7.1 summarises the main results of this study. The table shows the States groupedby the complexity of their service (Ref. /4/), and sorted by the total cost (cost per kilometreincluding delay cost). Indicators in red highlight that the cost in that category belongs to thetop 33% throughout Europe.
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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8. References
/1/ CRCO Principles for Establishing the Cost-Base for Route Facility Chargesand the Calculation of the Unit RatesEUROCONTROL, Brussels
/2/ IATA Airline Economic Results and Prospects 1996-1997
/3/ Conseil provisoire, Document de travailPC/98/3/9 POINT 12
/4/ CIP Convergence and Implementation ProgrammeStatus Report 1997, Edition 3.0 - January 1998EUROCONTROL, Brussels
/5/ M. Dalichampt Capacity Plan 1999J.C. Hustache for the European Air Navigation ServicesS. Mahlich EEC Note 23/98
EUROCONTROL Experimental CentreBrétigny sur Orge, France, Oct. 1998
/6/ STATFOR Air Traffic Statistics and ForecastsDoc. N. 98.70.14
/7/ CRCO Report on the Operation of the Route Charges SystemYearly reportsEUROCONTROL, Brussels
Related subject: Airport costs
/8/ ITA Les Redevances Aéroportuaires en EuropeITA Etudes et Documents, volume 44, 97/1
/9/ AEA Users Costs at Airports in Europe Asia & USAPrepared by Cranfield College of AeronauticsFebruary 1997
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
EEC: Cost of the En-Route Air Navigation Services in Europe
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26
Annex 1
Kilometres 1998(CRCO)
Flights 1998(CRCO)
Sectors 1998(EATMP / CIP)
Austria 141,684,977 759,785 14Belgium-Lux. 132,209,684 898,262 10Bulgaria 81,371,253 289,981 5Canarias 79,270,108 227,226 5Croatia 19,156,411 125,287 7Cyprus 55,018,239 179,747 2Czech Rep. 52,768,965 252,128 5Denmark 97,860,932 550,931 9France 1,053,456,588 2,312,354 78Germany 718,614,102 2,340,158 87Greece 193,432,554 370,501 9Hungary 104,408,674 419,158 4Ireland 117,151,240 412,314 9Italy 495,436,104 1,207,789 44Malta 12,997,757 49,292 1Netherlands 138,366,619 853,906 7Norway 109,893,157 464,010 13Portugal 119,679,352 276,114 5Romania 112,928,380 247,835 12Santa Maria 101,234,954 82,324 3Slovak Rep. 23,816,989 143,920 4Slovenia 12,141,197 148,005 5Spain 459,751,299 1,045,606 27Sweden 198,078,215 610,408 21Switzerland 104,929,083 937,968 13Turkey 246,528,362 470,315 7United Kingdom 584,354,430 1,864,198 41
EEUURROOCCOONNTTRROOLL EExxppeerriimmeennttaall CCeennttrreePPeerrffoorrmmaannccee aanndd EEccoonnoommyy RReesseeaarrcchh -- PPRRFF
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27
Contacts
European Organisation EUROCONTROLfor the Safety of Rue de la Fusée, 96Air Navigation B-1130 Brussels___________________ _________________
Organisation EUROCONTROLeuropéenne pour la Experimental Centresécurité de la B.P. 15navigation aérienne F-91222 Brétigny s/Orge Cedex
Contact the PRF team
Domain Contacts Email Tel FaxHead of PRF S. Mahlich Mah@eurocontrol.fr ++33 1 69 88 7634 7352
ATFMResearch
M. Dalichampt Dal@eurocontrol.fr ++33 1 69 88 7574 7352
Complexity T. Chaboud Chb@eurocontrol.fr ++33 1 69 88 74 09 7352
PAMELA M. Gibellini Gbl@eurocontrol.fr ++33 1 69 88 75 68 7352
Economics J.C. Hustache Hus@eurocontrol.fr ++33 1 69 88 7802 7352
ATFMsimulator
J. Lebreton Lbt@eurocontrol.fr ++33 1 69 88 7604 7352
AirspaceAnalysis
A. Marsden Mrs@eurocontrol.fr ++33 1 69 88 73 61 7352
ATFM E. Petit Pet@eurocontrol.fr ++33 1 69 88 73 95 7352
Applied math. L. Saîntigny Sai@eurocontrol.fr ++33 1 69 88 78 36 7352
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Contacts Email TelPRU X. Fron Xavier.fron@eurocontrol.be ++32 2 729 3778CRCO E. Letreguilly Eric.Letreguilly@eurocontrol.be ++32 2 729 3890
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