PRFP E R F O R M A N C E - Eurocontrol · PRFP E R F O R M A N C E 1200 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

EUROPEAN ORGANISATIONFOR THE SAFETY OF AIR NAVIGATION

EUROCONTROL EXPERIMENTAL CENTRE

EEC Note No. 8/99

Project GEN-4-E2

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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

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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



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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



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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.



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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



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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



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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%


States by Type 3,498Staff 1,803

Depreciation 522Operating cost (maint., energy, etc.) 874

Interest 251Others 48


States by category 3,498ATS 2,252AIS 89

MET 308Training 165

Studies and tests 189Administration 456

Others 38



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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%


Eurocontrol by Type 330Staff 232

Operating cost 33Depreciation 61

Interest 19Others -14


Eurocontrol by Service Unit 330MAAS UAC 72

IANS 9EEC 44

CFMU 67Logistic 62

EATCHIP 76Others 0



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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



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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



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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.



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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



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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



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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



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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.



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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/).



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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.



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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.



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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.



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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

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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

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1

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1.4

91A 92A 93A 94A 95A 96A 97A 98F

Belgium-Lux. United Kingdom Switzerland Portugal

Canarias Turkey Malta Slovenia



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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.



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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.



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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



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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.



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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.



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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



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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



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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 [email protected] ++33 1 69 88 7634 7352

ATFMResearch

M. Dalichampt [email protected] ++33 1 69 88 7574 7352

Complexity T. Chaboud [email protected] ++33 1 69 88 74 09 7352

PAMELA M. Gibellini [email protected] ++33 1 69 88 75 68 7352

Economics J.C. Hustache [email protected] ++33 1 69 88 7802 7352

ATFMsimulator

J. Lebreton [email protected] ++33 1 69 88 7604 7352

AirspaceAnalysis

A. Marsden [email protected] ++33 1 69 88 73 61 7352

ATFM E. Petit [email protected] ++33 1 69 88 73 95 7352

Applied math. L. Saîntigny [email protected] ++33 1 69 88 78 36 7352

Related activities

Contacts Email TelPRU X. Fron [email protected] ++32 2 729 3778CRCO E. Letreguilly [email protected] ++32 2 729 3890