SES II Performance Scheme Assessment of revised National ... · PRB assessment of revised National / FAB Performance Targets for RP1 (2012-2014) ... change from some stakeholders

Performance Review Body

SES II Performance Scheme

Assessment of revised National / FAB Performance Targets

1st Reference Period: 2012-2014

Prepared by the Performance Review Body (PRB)

of the Single European Sky

27 April 2012

PRB assessment of revised National / FAB Performance Targets for RP1 (2012-2014)

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This document has been produced by the Performance Review Commission (PRC) in its role as Performance Review Body (PRB) to assist the European Commission in the implementation of the Performance Scheme of the Single European Sky. It may be copied in whole or in part providing that the copyright notice and disclaimer are included. The information contained in this document may not be modified without prior written permission from the Performance Review Commission. The views expressed herein do not necessarily reflect the official views or policy of EUROCONTROL or of the European Commission, which make no warranty, either implied or express, for the information contained in this document, neither do they assume any legal liability or responsibility for the accuracy, completeness or usefulness of this information. Printed by EUROCONTROL, 96, rue de la Fusée, B-1130 Brussels, Belgium. The PRC’s website address is http://www.eurocontrol.int/prc. The PRU’s e-mail address is [email protected].


FOREWORD by the PRB Chair, Mr Peter Griffiths It is my pleasure to present to you the final report of the RP1 planning process. Like the earlier reports, it contains extensive comment on what states are proposing, and also makes recommendations on how states can improve their contribution to providing and high performance ATM system.

This report represents a planning programme which has taken two years to conclude. In that time, a lot has been achieved, some new ideas have been implemented and new techniques learnt. It is also evident that some States have learnt more about themselves: this has enabled them to plan a better

contribution to the European System. The fact that this process has also been conducted against a backdrop of one of the most serious downturns in the economy has amplified the urgency for change from some stakeholders. At the same time, it has made it more difficult for ANSPs to meet the stakeholders’ expectations.

There is still much to be done, but all states have shown they are willing to embrace the opportunity this new programme offers. With this report we now move to the critical final phase of RP1 – delivering on our plans. So I thought that as my final foreword to the RP1 planning process I would leave you with my comment on the challenge.

Traffic, as we all know, is an indicator of economic confidence, often used as a barometer of public sentiment on the economy with. Freight, commercial, business and leisure aviation, all indicate different aspects of what is happening in key sectors of society. Weakness in aviation shows a poor short-term outlook. During our planning period we have seen this twice: several airlines have now ceased operations, and some would contend that this is an indicator of continued weakness during RP1. High fuel costs have led airlines to cease flights on non-profitable routes, sooner than historically been the case, changing traffic flows and incomes.

ANSPs are faced with fluctuations in traffic originating from much more dynamic scheduling processes. These rapid changes are presenting challenges for the ANSPs, who must become more agile and responsive to variations in demand, in the same way as airlines do.

There are also signs of optimism for the longer term. The recent order for 220 aircraft by a Scandinavian short haul carrier suggests that growth is foreseen. Capacity must become flexible not only downwards but also upwards, to ensure that traffic can continue to grow when it is required. For ANSPs, the challenge is to become more adaptable safely, quickly, and efficiently. I have no doubt that the changes brought by the performance scheme give us some of the mechanisms for management of these conditions, if we can see the opportunities early, and adapt to the new conditions. The discussions for RP2 are now starting there is high expectation that key concerns of users will be addressed between 2015 and 2020.

Therefore, in closing, I believe the key to a successful RP1 for all of us as we move to delivery, is to build the mechanisms required to meet these demands. To enable our providers to anticipate trends, adapt, and maintain a world class, safe, cost efficient, and sustainable Air Transport Network.


Volume I - FINAL REPORT

1 INTRODUCTION AND CONTEXT ................................................................................................... 4

1.1 PURPOSE OF THE REPORT............................................................................................................ 4 1.2 BACKGROUND ............................................................................................................................... 4 1.3 CONTENTS OF COMMISSION RECOMMENDATION OF 23 NOVEMBER 2011................................. 6 1.4 STRUCTURE OF THIS REPORT ....................................................................................................... 6

2 PRB’S APPROACH ........................................................................................................................... 7

2.1 SUPPORT TO NSAS ...................................................................................................................... 7 2.2 LEGAL REQUIREMENTS ................................................................................................................. 7 2.3 PRINCIPLES, PROCESSES AND ORGANISATION............................................................................. 7

3 REVISION OF THE CAPACITY TARGETS ................................................................................. 10

3.1 CONTENT OF COMMISSION RECOMMENDATION......................................................................... 10 3.2 REVISED AGGREGATED CAPACITY TARGET ................................................................................ 10 3.3 DELAY COSTS.............................................................................................................................. 12 3.4 INDIVIDUAL CONTRIBUTIONS ....................................................................................................... 12

4 REVISION OF THE COST-EFFICIENCY TARGETS ................................................................. 15

4.1 CONTENT OF COMMISSION RECOMMENDATION......................................................................... 15 4.2 REVISED AGGREGATED COST-EFFICIENCY TARGET ................................................................... 15 4.3 TRAFFIC FORECAST .................................................................................................................... 17 4.4 COSTS FORECAST ....................................................................................................................... 18 4.5 INDIVIDUAL CONTRIBUTIONS ....................................................................................................... 19

5 OTHER COMMISSION RECOMMENDATIONS.......................................................................... 23

5.1 REVISION OF THE RISK PREMIUM AND RETURN ON EQUITY ........................................................ 23 5.2 REASSESSMENT OF THE SIZE OF AND NEED FOR INVESTMENTS................................................ 24 5.3 REFERENCES OF BUSINESS CASES AND/OR CBA OF INVESTMENTS AS WELL AS RELEVANCE

WITH THE EUROPEAN ATM MASTER PLAN ............................................................................................. 26 5.4 ASSUMPTIONS AND RATIONALE RELATED TO UNCONTROLLABLE COSTS ................................... 27 5.5 AGGREGATION OF TARGETS AT FAB LEVEL ............................................................................... 28

6 CONCLUSIONS AND PRB RECOMMENDATIONS .................................................................. 29

6.1 CONCLUSIONS............................................................................................................................. 29 6.2 PRB RECOMMENDATIONS .......................................................................................................... 30

ANNEX I – CAPACITY TARGETS ......................................................................................................... 35

ANNEX II – COST-EFFICIENCY TARGETS ........................................................................................ 36

ANNEX III – DESCRIPTION OF VOLUME II ........................................................................................ 37

Volume II – INDIVIDUAL ASSESSMENT REPORTS


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Executive Summary

Introduction

1. This report has been prepared by the Performance Review Body (PRB) of the Single European Sky for the Commission, in accordance with the provisions of the performance scheme Regulation, in particular Chapter III “The adoption of performance plans”.

2. It contains the PRB’s assessment of the revised performance plans submitted by States in response, inter alia, to the Commission’s Recommendation of 23 November 2011 asking certain States to revise some of their targets in order to contribute adequately to the efforts towards meeting the EU-wide targets.

3. This report is structured in two volumes: Volume I contains the PRB’s overall assessment of the revised Performance Plans and associated targets, as well as PRB’s recommendations. Volume II contains PRB’s individual assessments in respect of each revised Performance Plan.

4. The PRB’s recommendations are designed to provide the basis for a possible Commission Decision.

Key Points

5. From its analysis, the PRB wishes to make formal comments on the following key points:

(i) All States, with the exception of Cyprus, submitted revised performance plans on time. Cyprus has informed the PRB that a recent austerity budget imposed by the Government to meet economic general conditions will mean that further revisions to aspects of the plan will be necessary and cannot approve the plan until the Budget planning is completed.

(ii) States have made a major collective effort to close the gap with the capacity and cost-efficiency EU-wide targets. However, the revised Performance Plans collectively still fall short of the EU-wide targets for RP1 by a small margin (0.17 min/flight in capacity in 2014, 1% in determined unit rate in cost-efficiency over RP1).

(iii) A first draft of the Network Manager Performance Plan (NMPP) was submitted to the NMB at the end of March. The final version, once adopted, will complete the set of performance plans for RP1.

(iv) The PRB notes that the aggregated traffic forecast from the revised Performance Plans is close to the figures used for the EU-wide performance targets. It also notes that the latest STATFOR traffic forecast (February 2012) is forecasting a growth of 12.1% over 2009-2014, significantly below States’ forecasts (-4.7%), but remains within the bounds of the alert thresholds (10%).

(v) Such change in traffic levels will make it easier to reach the EU-wide capacity target. The Network Manager estimates that, all else being equal, the reduced traffic implies an EU-wide delay performance of 0.32 min/flight in 2014, i.e. below the EU-wide target for RP1. The NMPP and its implementation may bring further improvements.

(vi) As regards cost efficiency, the PRB notes that:

the revised Performance Plans collectively are close to the EU-wide targets and only fall short by a small margin (-0,3% in 2012, 1,4% in 2013 and 1.7% in 2014. Overall, 1% over RP1);


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the revised Performance Plans collectively represent a significant improvement over initial plans. The revised plans will result in savings of some €2.4Bn over RP1 compared to the 2009 unit rate baseline;

moreover, if the revised traffic forecast materialises, application of the risk sharing mechanism of the Charging regime will result in revenues for 2014 being €143M lower than in the revised Performance Plans;

under the Charging regime, unlike full cost-recovery, this revenue is lost and cannot be recovered through subsequent adjustment to the unit rate. The Scheme therefore creates strong incentives on ANSPs to manage their costs in response to traffic downturn, while mitigating the full impact through the traffic risk-sharing mechanism.

(vii) Overall, savings in delays between the initial and the revised performance plans are expected to compensate the increase in unit rates linked with risk sharing by a considerable margin.

(viii) The PRB considers that the traffic development needs to be carefully monitored by States and the European Commission.

(ix) As already highlighted in its first assessment report in September 2011, the PRB considers that delivering the Performance Plans is at least as important as adopting them. In particular:

For the capacity target, the day-to-day management of capacity at ANSP and Network level will be essential during RP1; and

For the cost-efficiency target, NSAs should monitor closely the total amount of uncontrollable costs during RP1, and report annually to the Commission.

(x) In view of revised traffic forecasts, reopening the Performance Plans would very unlikely result in improved cost-efficiency targets.

(xi) For these reasons the PRB recommends that the Commission accepts the revised Performance Plans, subject to the detailed recommendations in Section 6 below.

(xii) The focus now should be on delivery of the Plans supported by regular and robust monitoring of performance by NSAs and the PRB

(xiii) All States should align their national performance planning process for RP2 to ensure that EU-wide targets are properly taken into account and that the approval of Performance Plans does not pre-empt their assessment by the PRB and the Commission.

(xiv) In summary, the PRB recommends that the Commission secures what States have proposed and paves the way for RP2. This reports contains PRB proposals to this effect.


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1 Introduction and context

1.1 Purpose of the report

1.1.1 This report has been prepared by the Performance Review Body (PRB) of the Single European Sky in accordance with the provisions of Article 3 of Regulation (EU) No 691/2010 (the performance scheme Regulation) [Ref. i].

1.1.2 EUROCONTROL, acting through its Performance Review Commission (PRC) supported by the Performance Review Unit (PRU) has been designated as the PRB until mid-2015 [Ref. ii] to assist the Commission in the implementation of the performance Scheme.

1.1.3 This report presents PRB’s assessment of the revised performance targets at national/Functional Airspace Block (FAB) level for the first reference period (RP1: 2012-2014).

1.1.4 These revised national/FAB performance targets have been prepared by Member States following European Commission (EC) Recommendation dated 23 November 2011 [Ref. iii].

1.1.5 The purpose of this report is to support the Commission in preparing either notifications or recommendations to the Member States on further actions that could be considered in accordance with Article 14 of the performance scheme Regulation.

1.2 Background

1.2.1 The performance scheme Regulation structures the preparation of the first Reference Period (2012-2014) around the following key steps:

1.2.2 First step: Adoption of EU-wide performance targets. In February 2011, the European Commission adopted EU-wide performance targets and alert thresholds for the provision of air navigation services for the first reference period 2012-2014 [Ref. iv].

1.2.3 Figure 1 presents the geographical scope of the EU-wide targets which corresponds to the airspace controlled by the 27 EU Member States in the ICAO EUR region.

1.2.4 It also covers the airspace controlled by Norway and Switzerland (29 States) in the ICAO EUR region, as well as the Canaries FIR (Spain), Bodø FIR (Norway) and NOTA/SOTA (UK/IRL).

Figure 1: Geographical scope of EU-wide

targets

1.2.5 These EU-wide performance targets are as follows (see Figure 2 for an illustration):

Environment target: an improvement by 0.75% point of the average horizontal en route flight efficiency indicator in 2014 as compared to the situation in 2009.

Capacity target: an improvement of the average en route Air Traffic Flow Management (ATFM) delay so as to reach a maximum of 0.5 minutes per flight in 2014.


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Cost efficiency target: a reduction of the average European Union-wide determined unit rate for en route air navigation services (expressed in real terms, Euros 2009) leading to €53.92 in 2014, with intermediate targets of €57.88 in 2012 and €55.87 in 2013.

EnvironmentEU-wide + Network Manager level

2009 2014

- 0.75 % point

2009 2014

- 0.75 % point

Horizontal en-route flight efficiency

2011 2014

- 3.5%p. a.

€59.97

2012 2013

€57.88

€55.87

€53.92

Average EU-wide determined unit rate for en route ANS

Cost efficiencyEU-wide + National / FAB level

2011 2014

- 3.5%p. a.

€59.97

2012 2013

€57.88

€55.87

€53.92

Average EU-wide determined unit rate for en route ANS

Cost efficiencyEU-wide + National / FAB level

Average en route ATFM delay per flight

CapacityEU-wide + National / FAB level

maximum of 0,5 minutes per flight in 2014

Average en route ATFM delay per flight

CapacityEU-wide + National / FAB level

maximum of 0,5 minutes per flight in 2014

Figure 2: EU-wide performance targets adopted by the Commission

1.2.6 Second step: Preparation and adoption by States of National/FAB Performance Plans. States prepared Performance Plans at national or FAB level and sent them to the Commission by the end of June 2011.

1.2.7 Third step: Assessment of the Performance Plans by the Commission. The European Commission, assisted by the PRB, assessed the Performance Plans against the EU-wide performance targets using the assessment criteria defined in the performance scheme Regulation, during the following four months.

1.2.8 The PRB presented its report [Ref. v] to the Commission in September 2011 for an initial presentation at the 43rd Meeting of the Single Sky Committee (SSC/43).

1.2.9 This assessment resulted in a Commission Recommendation, which was presented to the Single Sky Committee on 24 October 2011 and adopted by the Commission on 23 November 2011 [See Ref. iii].

1.2.10 Fourth step: Revision of performance targets. States referred to in Commission Recommendation had two months to adopt revised targets, taking due account of the European Commission’s views together with the appropriate measures for reaching those targets. States had to send these revised targets to the Commission by 9 January 2012.

1.2.11 Fifth step: Assessment of the revised Performance targets. The European Commission, assisted by the PRB, assesses the revised performance targets against the EU-wide performance targets using the same assessment criteria and the content of Commission Recommendations, during the following four months.

1.2.12 The PRB conducted its assessment in consultation with the Commission during January-March 2012. This report represents the culmination of that assessment work and will serve as a basis for the Commission to prepare a Decision.

1.2.13 Sixth step: Communication of corrective measures. States concerned have two months after Commission’s Decision to communicate to the Commission the corrective measures they have adopted, together with the elements showing how consistency with the Commission’s Decision is ensured.


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1.3 Contents of Commission Recommendation of 23 November 2011

1.3.1 The Commission’s Recommendation dated 23 November 2011 [Ref. iii] contains seven types of recommendations which are addressed to different groups of States:

Recommendations Reference States concerned

Revision of the capacity targets. Article 2(a), 2(b), 3(a) &

3(b).

FABEC States, Greece, Spain, Austria, Poland, United Kingdom

Revision of the cost-efficiency targets. Article 2(c) & 3(c).

Bulgaria, Czech Republic, Germany, Estonia, Ireland, Spain continental, France, Italy, Cyprus, Latvia, Hungary, Malta, Austria, Portugal, Finland, Romania, Slovenia, Slovakia, Sweden, United Kingdom

Revision of the assumptions underlying the risk premium and, consequently, the return on equity.

Article 3(d). Czech Republic, Germany, Estonia, Ireland, Spain, France, Malta, Austria, Slovakia, Finland, United Kingdom

Reassessment of the size of and need for investments necessary to achieve the performance targets over the reference period.

Article 3(e). Bulgaria, Czech Republic, Estonia, France, Italy, Latvia, Hungary, Malta, Portugal, Romania, Slovenia, Slovakia, Finland, United Kingdom

Provision of references to business cases and/or cost-benefit analyses and describing their relevance in relation to the European ATM Master Plan.

Article 4(a).

All

Provision of the assumptions and rationale related to uncontrollable costs.

Article 4(b) All

Communication for information to the Commission aggregated performance targets at FAB level.

Article 4(c). All

1.4 Structure of this report

1.4.1 The PRB report consists of two distinct and separate volumes:

Volume I: contains the PRB’s overall report.

Volume II: contains the PRB’s assessment reports for each revised national/FAB performance targets prepared by the Member States concerned.

1.4.2 This High Level Report (or Volume I) is organised following the various specific recommendations of the Commission.

1.4.3 Each individual assessment report of the Volume II covers both the recommendations of the Commission as well as the PRB conclusions of the initial assessment published in September 2011, in particular in terms of safety.


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2 PRB’s approach

2.1 Support to NSAs

2.1.1 In the second half of 2011, the PRB provided support and guidance to National Supervisory Authorities (NSAs), to assist them in developing their revised performance targets. This support has taken the form of:

Meeting of the Performance Working Group of the NSA Co-ordination Platform, held on 5 October 2011, on the preparation of a guidance material for presenting the revised performance targets.

Publication on 27 October of a guidance material for revised performance targets together with individual spread sheets pre-filled with the data from the initial Performance Plans.

Individual letters sent to each NSAs early November together with spread sheets prefilled with the route charges data sent by States to Eurocontrol for the November Enlarged Committee meeting. Each individual letter highlighted the specific recommendation of the Commission on the cost-efficiency target and commented the figures provided to Eurocontrol.

Numerous bilateral meetings with NSAs between October and December 2011 with the objectives of clarifying the issues identified in the first loop, sharing additional information on specific context and local issues, discussing the trade-offs and interdependencies (in particular with France, Germany, Spain, Italy, United Kingdom, Romania, Bulgaria, FABEC).

2.2 Legal requirements

2.2.1 The assessment of each Performance Plan was carried out according to the requirements of the performance scheme Regulation (Article 14 and Annex III), as well as the recitals of European Commission’s Decision 2011/121/EU setting the EU-wide targets for RP1.

2.3 Principles, processes and organisation

PRINCIPLES

2.3.1 The PRB applied the following principles in its assessment of the revised Performance Plans:

Independent assessment: The assessment team comprised the PRB, which is an independent body, supported by the PRU. For the safety part, EASA experts were also involved.

Objective and impartial assessment: An objective and predefined analysis framework was applied consistently to all Plans.

Evidence based analysis: The analytical framework used information from the national/FAB initial and revised Performance Plans.

Differential analysis: Compared to the initial assessment, the assessment of the revised performance targets was organised around the identification of the changes (improvements or deteriorations) compared to the initial Plans.

Transparent and fair processes: Transparency and fairness of the processes were sought by developing with NSAs, ahead of the submission of the revised performance targets, extensive guidance materials to ensure a uniform level of information as to what was expected, and helped ensure some consistency across the Performance Plans.


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Collective contribution to EU-wide targets: the analysis sought to identify whether Performance Plans collectively meet the EU-wide targets.

Clear accountability for meeting the targets: Evidence was sought for such accountability, especially in case of multiple accountable entities or FAB plans.

PROCESS AND ORGANISATION

2.3.2 The corresponding reference data were assembled, tools were developed and the methodology was tested based on initial revised targets submitted by States. A “risk register” was maintained and regularly shared with the Commission to monitor variances from EU-wide targets as well as evolution from the initial performance targets.

2.3.3 The European Commission asked States to communicate their revised performance targets by 9 January 2012 at the latest. Figure 3 shows the official dates of receipt of the revised Performance Plans (or addendum to the initial Plan).

Revised Performance Plans

Status Date of receipt

Date of signature

Austria Final 27-12-2011 27-12-2011 Bulgaria Final 26-01-2012 25-01-2012 Cyprus Provisional 10-01-2012 Czech Republic Final 09-12-2011 08-12-2011 Danish / Swedish FAB Final 21-12-2011 21-12-2011 Estonia Final 31-01-2012 31-01-2012 FAB EC Final1 22-12-2011 22-12-2011

Belgium / Lux. Final 17-01-2012 17-01-2012 France Final 22-12-2011 22-12-2011

Germany Final 20-12-2011 20-12-2011 Switzerland Final 06-01-2012 06-01-2012

The Netherlands Final 07-11-2011 07-11-2011 Finland Final 21-10-2011 20-10-2011 Greece Final 16-01-2012 12-01-2012 Hungary Final 03-01-2012 22-12-2011 Ireland Final 09-01-2012 09-01-2012 Italy Final 30-01-2012 30-01-2012 Latvia Final 12-01-2012 09-01-2012 Lithuania Final 25-01-2012 30-12-2011 Malta Final 18-01-2012 09-01-2012 Norway Final 17-02-2012 17-02-2012 Poland Final 23-01-2012 23-01-2012 Portugal Final 30-12-2011 30-12-2011 Romania Final 06-01-2012 21-12-2011 Slovak Republic Final 09-01-2012 09-01-2012 Slovenia Final 06-12-2011 30-11-2011 Spain Final 01-02-2012 01-02-2012 United Kingdom Final 19-12-2011 19-12-2011

Figure 3: Dates of reception and signature of revised Performance Plans and Targets

2.3.4 At the time of finalising this report (27 April 2012), the European Commission is still awaiting the final version of Cyprus’ revised Performance Plan. For the purpose of this

1 FABEC Performance Plan is final but requires the entry into force of the FABEC Treaty still under ratification.


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report, the PRB has therefore used the draft sent by Cyprus on 10 January 2012. Cyprus has informed the PRB that the reason for the delay is that a new budget is being planned by the Cypriot Government, and that overall performance of the ANSP will need to be examined in line with the new budget policy. This issue has been referred to the European Commission by the PRB Chairman for further action.

2.3.5 As the performance plans were received, the revised performance targets contained therein were validated. Where necessary, the team contacted the NSAs concerned, raised specific questions and asked for clarification.

2.3.6 On 29 February 2012, the revised Performance Plans and Targets were published on the PRB’s public website together with formal corrigendum where necessary.

2.3.7 The assessment reports were prepared under PRB Chairman’s oversight with regular meetings and teleconferences of the PRB during the first quarter of 2012. In order to ensure, and be seen to ensure, total independence of analysis, the PRB Chairman and members were excluded from taking part in the deliberations related to the assessment of the Performance Plan of the State or FAB corresponding to their nationality.

2.3.8 A team of 15 dedicated specialists in the PRU, together with experts from EASA for the safety part, worked throughout January, February and March to analyse carefully each revised Performance Plan. The PRB acknowledges, with gratitude, their dedication, professionalism and commitment.

2.3.9 The PRB takes this opportunity also to thank the NSAs for having submitted the national/FAB performance targets before or close to the stipulated deadline and for their support in January/February when clarifications were needed.


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3 Revision of the capacity targets

3.1 Content of Commission Recommendation

Revision of capacity target

2. Based on the Recommendations contained in the assessment report of the Performance Review Body, the Commission considers that:

2.a) capacity targets set by Greece, Spain, Austria, Poland and the United Kingdom in their national plans are not consistent with, and do not adequately contribute to, the European Union-wide targets;

2.b) The capacity target set by Belgium, Germany, France, Luxembourg and the Netherlands in the plan for the Functional Airspace Block European Central (FABEC) is not consistent with, and does not adequately contribute to, the European Union-wide targets;

3. When adopting revised performance targets, Member States concerned are requested to ensure that the recommendations set out in the assessment report of the PRB are taken into account.

In particular, having taken note of the circumstances of each Member State:

3.a) Greece, Spain, Poland, Austria and the United Kingdom should improve their capacity targets to reach or fall below, by 2014, the following reference values (values as computed by Eurocontrol and used in the assessment report of the Performance Review Body):

— Greece: 0,26 minute of average delay per flight,

— Spain: 0,31 minute of average delay per flight,

— Poland: 0,26 minute of average delay per flight,

— Austria: 0,23 minute of average delay per flight,

— United Kingdom: 0,27 minute of average delay per flight;.

3b) Belgium, Germany, France, Luxembourg and the Netherlands should improve the capacity target for FABEC to reach or fall below, by 2014, the reference value of 0,4 minute of average delay per flight;

3.2 Revised aggregated capacity target

3.2.1 The methodology used for the consolidation of national/FAB targets is straightforward. The aggregated delay per flight for a particular year is calculated as the product of individual delay per flight of each Performance Plan with the expected traffic in the State/FAB concerned divided by the expected traffic at EU-wide level.

3.2.2 The EU-wide capacity target for RP1 is for the EU-level capacity KPI not to exceed 0.5 min/flight in 2014. Indicative values for 2012 and 2013 (0.7 and 0.6 min/flight respectively) were proposed by the PRB in December 2010 to EUROCONTROL capacity planning process for the calculation of the individual capacity reference values.


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0,0

0,5

1,0

1,5

2,0

2,5

En-

rout

e A

TF

M d

elay

per

flig

ht (

min

.)

Initial plans 1,18 1,04 0,76

Revised plans 1,07 1,00 0,67

Historic values 1,00 1,18 1,40 0,93 2,06 1,14

EU-wide targets 0,70 0,60 0,50

2006 2007 2008 2009 2010 2011 2012P 2013P 2014P

Source: CFMU & Performance PlansEU-29

Figure 4: EU-wide, initial and revised aggregated capacity targets

3.2.3 Figure 4 shows the aggregated capacity targets (both initial and revised targets) together with the EU-wide indicative values for 2012 and 2013, the EU-wide capacity target for 2014 and the historical values over 2006-2011. Detailed information for each State is presented in Annex I. Several observations can be made at this stage:

The revised targets collectively present a real improvement compared to the initial ones. For 2014, the aggregated capacity targets (0.67 min/flight):

offer better performance than ever achieved (0.93 min/flight in 2009);

offer better performance than the historical EUROCONTROL delay target (1 min/flight during the summer period) which is equivalent to 0.7 min/flight over the whole year; and

represent an improvement compared to the initial plans (0,76 min/flight).

This shows the efforts made by the parties concerned and also the positive effect of target-setting under the SES. However, they collectively fall short of the EU target (0.5 min/flight) by a small margin.

For 2012, the aggregated capacity target (1.07 min/flight) does not meet the indicative value (0.7 min/flight2) and exceeds delay values achieved in 2009 (0.93 min/flight), although traffic growth is relatively slow. This indicates that there is room for further improvement from States/FABs.

The gap between the aggregated capacity plans and the SES targets3 is reducing over the period, which is a positive trend.

2 A target of 0.7 min/flight for the whole year is equivalent to the current EUROCONTROL target of 1 min/flight for the summer.

3 Target for 2014, indicative values for 2012 and 2013.


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The aggregation of national/FAB capacity targets does not take into account actions of the Network Manager. Through adequate airspace, flow and capacity management, the Network Manager and ANSPs together can achieve a better outcome than the sum of individual capacity plans. The final Network Operations Plans (NOP) is expected to provide further information on this subject.

3.2.4 In February 2012, EUROCONTROL STATFOR released its Medium-Term Forecast of Service Units for 2012-2017 [Ref. vi]. While forecasting growth of 12.1% over RP1, this figure presents a significant downward revision (-4.7%) of the previous forecasts. The Network Manager has simulated4 the impact of this downward revision, using the current ANSP capacity plans, which indicates an EU-wide delay performance of around 0,32 min/flight in 2014, i.e. below the EU-wide capacity target of 0.5 min/flight.

3.3 En-route ATFM delay costs

3.3.1 Delays translate into additional cost for airspace users, which is quantified using the latest estimate of delay cost, i.e. €81 per minute [Ref. vii].

3.3.2 Figure 5 shows the difference in delay costs5 associated with the aggregated capacity targets and the EU-wide target6 respectively. This calls for several observations:

Thanks to efforts to progressively close the capacity gaps, the additional cost of delays is likely to reduce by some €188M over the period 2012- 2014. This illustrates the value of efforts made by most States under the SES performance scheme.

The capacity gap remaining in 2014 represents some €119M, which has reduced by 39% compared to the initial plans.

The value of this gap, when compared to the cost-efficiency gap (see Section 4 below) underlines the importance of meeting the capacity target, the strong leverage of capacity management on operational and economic ANS efficiency, and the value of Network Manager action if the capacity EU-wide target is achieved collectively.

Cost of delays above indicative values (2012 & 2013)

and EU-wide target (2014) (M€ in nominal terms)

2012 2013 2014 Total

Initial targets 389 337 195 922

Revised targets 302 312 119 734

Difference -87 -25 -76 -188

% -22% -7% -39% -20%

Figure 5: Additional delay costs between the aggregated and EU capacity targets

3.4 Individual contributions

3.4.1 According to the Commission’s Recommendation, six plans were assessed as contributing insufficiently to the capacity EU-wide target set for 2014: Greece, FABEC, Austria, Spain, Poland and the United Kingdom (in order of decreasing impact).

3.4.2 After revision of the capacity targets, four plans still contribute insufficiently for 2014: namely: FABEC, Greece, Spain and Poland. Figure 6 below shows the impact of those

4 Draft version of the Network Manager Performance Plan presented at NMB/3 on 28 March 2012. 5 Computed as the sum of additional minutes of delays above the reference values. 6 Indicative values for 2012 and 2013.


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four national/FAB targets, i.e. how far they contribute to exceeding the indicative values for 2012-13 and the EU-wide target for 2014.

3.4.3 Figure 6 also shows the evolution between the initial Performance Plans of June 2011 and the revised Performance Plans of January 2012. In particular, it shows that in 2014, Austria, Greece, Poland and the United Kingdom have improved their targets while FABEC and Spain have left their target unchanged.

0,15 0,150,13 0,13

0,06 0,06

0,06 0,050,07

0,05

0,090,05

0,05 0,05 0,060,06

0,04

0,04

0,080,05 0,05 0,08

0,02

0,02

0,11

0,05

0,10 0,07

0,04

0,02

0,02

0,010,01

0,02

0,02

0,01

0,01

0,01

0,00

0,10

0,20

0,30

0,40

0,50

0,60

Initial Revised Initial Revised Initial Revised

2012 2013 2014

United Kingdom

Hungary

DK‐SE

Austria

Poland

Spain

Greece

FABEC

Source: PRB

Figure 6: Evolution of the impact of plans exceeding the reference values on EU-wide capacity target between the initial plans (June 2011) and the final plans (January 2012)

3.4.4 Details of the capacity reference values, the capacity targets of the initial and revised Performance Plans and the impact on EU-wide KPI for 2012, 2013 and 2014 are shown in Figure 7 (Red shows a negative contribution in min/flight while green shows a positive contribution. The last 3 columns show the remaining share in the aggregated delay figure at EU-wide level7).

2012 2013 2014 2012 2013 2014 2012 2013 2014

Austria 0,30 0,24 0,23 1,39 1,28 0,65 0,85 0,98 0,23 -0,54 -0,30 -0,42 0,05 0,07 0,00

Bulgaria 0,11 0,14 0,12 0,11 0,14 0,12 0,11 0,13 0,11 0,00 -0,01 -0,01 0,00 0,00 0,00FABEC 0,52 0,47 0,40 0,77 0,68 0,50 0,77 0,68 0,50 0,00 0,00 0,00 0,15 0,13 0,06

Greece 0,37 0,32 0,26 1,20 1,35 1,50 1,10 1,00 0,95 -0,10 -0,35 -0,55 0,05 0,05 0,05Ireland 0,09 0,13 0,14 0,14 0,14 0,14 0,07 0,12 0,14 -0,07 -0,02 0,00 0,00 0,00 0,00

Poland 0,32 0,31 0,26 1,50 1,00 0,50 1,00 1,50 0,48 -0,50 0,50 -0,02 0,05 0,08 0,02Spain 0,52 0,42 0,31 0,80 0,75 0,50 0,80 0,75 0,50 0,00 0,00 0,00 0,05 0,06 0,04

United Kingdom 0,31 0,28 0,27 0,36 0,31 0,31 0,31 0,26 0,26 -0,05 -0,04 -0,04 0,00 0,00 0,00

2013 20142012

Individual contribution (min/flight)

2012 2013 2014Initial targets Revised targets

Performance Plan

Tar

get

to

be

revi

sed

Rev

ised

ta

rget

s

Reference Values(min/flight)

Capacity targets(min/flight)

Revised targets vs. Initial targets

Figure 7: Reference values, initial and revised capacity targets

7 For example, the aggregated capacity KPI for 2014 is 0.67 min/flight. The “2014” stacked bar shows the respective contributions to exceeding the EU-target for 2014 (0.5 min/flight) by 0.17 min/flight.


14

3.4.5 The revised plans can be organised in three categories:

REVISED PLANS MEETING THE 2014 REFERENCE VALUES:

Austria: proposes an improvement for each year of RP1, converging to the reference value in 2014. The 2012 and 2013 intermediate values remain higher than the respective reference values.

United Kingdom: proposes an improvement for each year of RP1, meeting the reference values for each year, even exceeding them in 2013 and 2014.

REVISED PLANS MISSING THE 2014 REFERENCE VALUES:

FABEC States: the six FABEC States (Belgium, France, Germany, Luxembourg, The Netherlands and Switzerland) do not propose any change and are still planning to miss the reference values in each year of RP1.

Greece: proposes an improvement for each year of RP1. Despite these efforts, Greece still falls short of meeting the reference values in each year of RP1.

Poland: proposes an improvement for 2012 and 2014 but plan a deterioration in 2013. Despite these efforts, Poland still falls short of meeting the reference values in each year of RP1.

Spain: does not proposed any change and is still planning to miss the reference values in each year of RP1.

STATES HAVING DECIDED PROACTIVELY TO REVISE THEIR PLAN:

Bulgaria: proposes an improvement in 2013 and 2014, exceeding the reference values over these two years.

Ireland: proposes an improvement in 2012 and 2013, exceeding the reference values over these two years.

3.4.6 The PRB notes that, after the revision, most States have presented Performance Plans consistent with the EU-wide targets and considers that those States whose Performance Plan does not meet their capacity reference value in 2014 should take actions with the assistance of the Network Manager.

3.4.7 The PRB notes that the latest simulation of the Network Manager using the most recent STATFOR Medium-Term traffic forecast of February 2012 indicates an EU-wide delay performance of around 0,32 min/flight in 2014, i.e. below the EU-wide target of 0.5 min/flight8.

3.4.8 By analysing the latest NETOPS9 information, the PRB notes that some ANSP capacity plans do not seem to provide enough capacity to meet the targets proposed in the Performance Plans (this is particularly the case for Austria and the provisional plan for Cyprus and could also be the case for France, Greece, Poland, Spain, Switzerland and Germany). The PRB considers that the ANSP capacity plans should be updated as soon as possible to enable the capacity targets to be met.

8 Draft version of the Network Manager Performance Plan presented at NMB/3 on 28 March 2012. 9 The Network Operations Team (NETOPS) is a technical, operational, specialist advisory body, established within

the framework of EUROCONTROL, providing a direct channel of consultation between all stakeholders involved on activities pertaining to performance and delivery aspects under the technical and operational development/deployment level, for Airspace, Operational Capacity Planning, Air Traffic Flow and Capacity Management and Navigation Applications technical and operational issues and activities. The Network Operations Team shall facilitate the design, planning and implementation of a safe, cost-efficient, dynamic, European airspace network


15

4 Revision of the cost-efficiency targets

4.1 Content of Commission Recommendation

Revision of cost-efficiency target

2. Based on the Recommendations contained in the assessment report of the Performance Review Body, the Commission considers that:

2.c) cost-efficiency targets set by Bulgaria, Czech Republic, Germany, Estonia, Ireland, Spain (for its continental en route charging zone), France, Italy, Cyprus, Latvia, Hungary, Malta, Austria, Portugal, Finland, Romania, Slovenia, Slovakia, Sweden and the United Kingdom in their national plans are not consistent with, and do not adequately contribute to, the European Union-wide targets”.



3.c) Member States referred to in paragraph 2 c) should take every opportunity for further improving cost-efficiency targets in national or functional airspace block performance plans during the reference period, in particular with regard to the evolution of the general context, the reduction of the cost of capital and support costs (costs other than those for air traffic controllers in operation), the increase in productivity and the rationalisation of investments in the context of the establishment of functional airspace blocks.

4.2 Revised aggregated cost-efficiency target

4.2.1 The methodology used for the consolidation of national/FAB targets is the following: the aggregated determined unit rate for a particular year is calculated as the sum of the individual en-route determined costs of each Performance Plan (expressed in €2009) divided by the total en-route service units of each Performance Plan.

4.2.2 The EU-wide targets for cost-effectiveness are three Determined Unit Rates (DUR): €57.88 in 2012, €55.87 in 2013 and €53.92 expressed in real terms, EUR 2009 (hereafter “€2009”) per en-route service unit (SU).

4.2.3 All States adopted cost-efficiency targets as national targets, none as FAB targets.

4.2.4 Figure 8 presents the EU-wide cost-efficiency targets, the initial and revised aggregated DURs from the Performance Plans, as well as past performance indicators. Detailed information for each State is presented in Annex II. The following general observations can be made:

The aggregated DUR for 2012 is slightly below the EU-wide target (-0.3%).

The aggregated DUR from revised plans for 2014 is 13.9% below the DUR for 2009 (i.e. -3.0% per annum in average since 2009). This shows a significant collective improvement in cost-efficiency over five years, which must be acknowledged.

The revised Performance Plans still collectively fall short of the EU-wide cost-efficiency target for 2014 by €0.91 (or +1.7%), although this represents an improvement from the gap of €1.30 (or +2.4%) in the initial plans.


16

48

52

56

60

64

68

Det

erm

ined

uni

t ra

te (

€200

9 pe

r S

U)

Initial plans 58,08 57,04 55,22

Revised plans 57,73 56,68 54,83

Historic values 63,70 60,37 58,97

EU-wide targets 57,88 55,87 53,92

2009 2010 2011F 2012P 2013P 2014P

Source: Performance PlansEU-29

Figure 8: EU-wide, initial and revised aggregated cost-efficiency targets

4.2.5 The combination of cost-efficiency targets adopted under the performance scheme and strong incentives to reach them under the charging scheme Regulation will secure savings10 of some €2.4Bn over RP1 vs. the unit rate in 2009, as shown in Figure 9. This is somewhat below the €2.6Bn savings associated with the EU-wide targets. The proposed revised aggregated DUR in 2014 is -13.9% below the 2009 DUR in comparison with the 2014 EU-wide target which was -15.4% below the 2009 DUR.

Figure 9: Revised plans vs. EU-wide target

10 Subject to revisions linked with uncontrollable costs.


17

4.3 Traffic forecast

4.3.1 Figure 10 presents the difference between en-route service unit forecasts included in the Commission Decision on the EU-wide targets and the aggregated service units from the revised Performance Plans. It must be noted that the States’ aggregated service unit forecasts are very close to the forecasts used in 2010 for the establishment of the EU-wide targets and even slightly higher (by 0.4%) for the year 2014.

2009-2014 En-route service units (in ‘000) 2012 2013 2014

Overall Annual average

Service units in Commission Decision setting EU-wide targets for RP1

108 776 111 605 114 610 17.1% 3.2%

Aggregated service units from revised Plans

108 465 111 592 115 119 17.6% 3.3%

Difference (%) -0.3% 0.0% 0.4%

Figure 10: Traffic forecasts in the EC decision and revised Performance Plans

4.3.2 The PRB notes that the current economic context introduces some uncertainties for the traffic outlook. In February 2012, EUROCONTROL STATFOR released its Medium-Term Forecast of Service Units for 2012-2017 [Ref. vi]. This document presents a significant downward revision compared to previous forecasts. The difference with the forecasts used in the revised Performance Plans is illustrated in Figure 11.

2009-2014 En-route service units (in ‘000) 2012 2013 2014

Overall Annual average

Aggregated service units from revised Plans

108 465 111 592 115 119 17.6% 3.3%

STATFOR Feb 2012 104 707 106 648 109 726 12.1% 2.3%

Difference (%) -3.5% -4.4% -4.7%

Figure 11: EUROCONTROL STATFOR Medium-Term traffic forecast (Feb 2012)

4.3.3 In particular, should this scenario materialise, traffic in 2014 would be 4.7% below the forecasts of the Performance Plans (i.e. the annual average growth over 2009-2014 would be 2.3% instead of 3.3%).

4.3.4 Although this remains within the bounds of the alert thresholds (±10%) at EU-wide level, the situation is very contrasted across States. Such a change in traffic levels, should it materialise, would require a significant adaptation of ANS costs but make it easier to reach the capacity target (see Section 3.4.7).

4.3.5 The PRB has estimated the impact of this revised traffic forecast on en-route revenues for the year 2014, by applying the traffic risk sharing mechanism (and excluding the effects such as carry-overs and revenues from other sources). This is shown on Figure 12,

4.3.6 Figure 12 shows in particular the States’ revised targets for 2014 (orange dot), the line of the revenues including the traffic risk sharing mechanism with the various thresholds (2%, 10%) (red line), the 2014 EU-wide target (grey dot) and the situation if the latest STATFOR forecast for 2014 was to materialize (blue dot).

4.3.7 From Figure 12, the PRB notes that the States’ revised targets for 2014 are €133M above the EU-wide targets but that the potential loss of revenues for ANSPs if the February 2012 STATFOR traffic forecast was to materialize is €143M. The PRB also notes that the maximum exposure for 2014 is €219M.


18

4.3.8 The PRB notes that the potential loss of revenues in 2014 due to this downward traffic forecast (€143M) is covered by the RoE of ANSPs which has been estimated at around €200M.

2014 Potential Revenues(After consideration of the traffic risk sharing mechanism

but excluding other effects such as carry‐overs and revenues from other sources)

5.900 M€

6.000 M€

6.100 M€

6.200 M€

6.300 M€

6.400 M€

6.500 M€

6.600 M€

6.700 M€

97.000 102.000 107.000 112.000 117.000 122.000 127.000 132.000

En‐route Service units 2014

2014 Revenues

States' traffic forecast in revised Performance Plans (DUR 54,83€)

STATFOR Feb. 2012 Traffic forecast (‐4,7% below States' forecast)(DUR 55,91€)

States' minimum revenues

EU‐wide target (DUR 53,92€)

133M€

Alert

mechanism

Alert

mechanism

‐10% +10%

143M€

219M€

Figure 12: 2014 Potential Revenues after the application of the traffic risk-sharing mechanism,

4.3.9 Finally, it should also be noted that the latest traffic forecast from IATA [Ref. viii] suggests a less pessimistic outlook for Europe in the sense that the February 2012 EUROCONTROL STATFOR traffic forecast (see Figure 11) could be considered as a more conservative scenario.

4.4 Costs forecast

4.4.1 Figure 13 presents the difference between en-route determined costs included in the Commission Decision on the EU-wide targets and the cumulative determined costs from the revised Performance Plans.

(M€ 2009) 2012 2013 2014 Total

Determined costs in Commission Decision setting EU-wide targets for RP1

6 296 6 234 6 179 18 709

Aggregated determined costs from revised Plans 6 262 6 325 6 312 18 898

Difference -34 +91 +133 +189

% -0.5% +1.5% +2.1% +1.0%

Figure 13: Determined costs in the EC Decision and revised Performance Plans

4.4.2 It shows that, over RP1, the sum of proposed determined costs is 1% above the determined costs of the Commission Decision setting the EU-wide targets.


19

4.4.3 It must also be noted that some €104M of determined costs (in €2009) have been removed over RP1 compared to the initial (June 2011) Performance Plans (i.e. €293M minus €189M), which represents one third of the initial gap of €293M11.

4.5 Individual contributions

4.5.1 After having submitted their Performance Plan in June 2011, some States were assessed as contributing adequately to the EU-wide cost-efficiency target and were a priori not expected to revise their cost-efficiency target.

4.5.2 This section covers first the evolution between the revised and the initial Performance Plans. The end of the section covers the overall contribution compared to 2009. More information on the individual contributions of each Performance Plan are detailed in Volume II of this report.

4.5.3 PRB’s objective was to capture genuine performance improvements (or deteriorations) by excluding the effect of the reallocation of Eurocontrol costs12. Since the Determined Unit Rate (DUR) is a ratio between the en-route Determined costs (DC) and total en-route Service Units (SU), understanding the changes in DUR requires analyzing both the changes of DCs (excluding the effect of the reallocation of Eurocontrol costs) and SUs.

4.5.4 Figure 14 below presents the “genuine” variations between the initial Performance Plans and the revised ones, when excluding the effect of the reallocation of Eurocontrol costs. It is however important to also take account of the overall situation in order to capture the efforts made by States in their initial Performance Plans, as well as the efforts made prior to RP1 as required by the Performance scheme Regulation.

4.5.5 Figure 14 shows that, after excluding the effects of reallocation of Eurocontrol costs:

Several States used the opportunity of revising their Performance Plans and improved their cost-efficiency performance either by adapting their costs, the traffic or both;

However, a number of States (Austria, France, Germany, Romania, Sweden and the United Kingdom) have decided to leave their costs and traffic forecast unchanged;

Three States have deteriorated their cost-efficiency performance during the revision: Czech Republic (decrease in costs and decrease in traffic), Poland (increase in costs) although its initial target was considered as contributing adequately to the EU-wide target, and Italy (decrease of traffic due to the Libyan and North African crisis and no change in costs).

4.5.6 The PRB would like to comment on two specific States: Italy and Romania.

4.5.7 Regarding Italy, the PRB notes that two local alert mechanisms are proposed:

a specific local alert threshold on traffic to take account of the exceptional circumstances arising in 2011 as a result of the Libyan crisis and events in North Africa.

a specific local alert mechanism on costs, for variations of costs (or revenues) originated from socio-political or financial factors that cannot be foreseen in advance by the State.

11 The initial report of the PRB mentioned a total gap of €256M over RP1 but the actual figure was €293M. The difference is due to the fact that France did not used total Determined costs (DCs) and total Services Units (SUs) but rather chargeable DCs and chargeable SUs. This had of course no impact on the French cost-efficiency target (which is expressed in Determined Unit Rates) and has been corrected in the revised Performance Plan.

12 The allocation keys used to calculate the contributions of each Eurocontrol States to the Eurocontrol budget are calculated on an annual basis. The latest keys were presented to States in October 2011, between the initial and the revised Performance Plans. Whilst the total remained unchanged, some States faced some significant changes which have been excluded by the PRB to measure genuine changes.


20

4.5.8 It is the PRB opinion that where a State opts for a specific local traffic alert threshold in accordance with Article 18 of the performance scheme Regulation, the State shall provide the values as well as the detailed justifications for the consistency with the thresholds defined in Commission Decision setting the EU-wide targets and thresholds for RP1.

4.5.9 The PRB does not recognise the need for any specific alert mechanism on costs since such mechanism as described in the Italian Plan is not foreseen by the performance scheme Regulation. Moreover, the PRB notes the acceptable type of costs risk is already covered by the "uncontrollable costs" mechanism foreseen in the charging scheme Regulation.

4.5.10 Insofar as Romania is concerned, the PRB notes that ROMATSA’s major investment “ROMATSA 2015+” is planned to be amortized over 4 years which does not seem to correspond to the “expected operating life” as required by Article 6(2) of the charging scheme regulation. The PRB therefore recommends that Romania be asked to change this duration and notes that this will not affect RP1 DURs as the investment will be commissioned in 2015.

Genuine decrease

in determined costs No change

in determined costs Genuine increase

in determined costs

Finland, Malta (improvement in DURs) Increase

in SUs

Cyprus**, Portugal, Norway, Bulgaria, Estonia, Slovenia,

Denmark*

Belgium-Lux*, Greece*, Lithuania*, Netherlands*,

Switzerland* No change in SUs

Spain, Hungary, Latvia Austria, France,

Germany, Romania, Sweden, UK

Poland* (deterioration in DURs)

Ireland, Slovakia (improvement in DURs) Decrease

in SUs Czech Republic (deterioration in DURs)

Italy (deterioration in DURs)

"Genuine" refers to changes in determined costs excluding the effect of the reallocation of EUROCONTROL costs. States with * are those for which the initial Performance Plan was considered to contribute adequately to the EU-

wide cost-efficiency targets. Cyprus’ assessment is based on an unsigned version of Performance Plan sent on 10 January 2012. Light blue cells refer to genuine deterioration of DURs, dark blue cells refer to genuine improvements of DURs and

white cells refer to no changes in DURs.

Figure 14: Factual comparison of determined costs (excluding effects of reallocation of Eurocontrol costs) and traffic and resulting “genuine changes” between initial and revised

Performance Plans

4.5.11 To complement the analysis of the evolution between the initial and the revised Performance Plans, Figure 15 presents the overall contribution, taking into account the efforts made in the initial plans since 2009 (2009 being the last year with actual figures when EU-wide targets for RP1 were set). In particular Figure 15 presents three important information for each State (excluding the Eurocontrol reallocation effect. For absolute figures, see Annex II):

the proposed DUR level in 2014 from the revised Performance Plans expressed in €2009;


21

the contribution to gap closing over RP1 (excluding the effect of the reallocation of Eurocontrol costs); and

the average annual variation of the DUR over the period 2009-2014. It must be recalled that the EU-wide target for 2014 of €53.92 was equivalent to an average annual decrease of -3.2% from the 2009 DUR.

4.5.12 Figure 15 shows in particular that the States’ contributions arising from the revision of the targets are not spread evenly and they have to be analysed taken into account also the overall contribution over the period 2009-2014. In particular:

Some States have made a significant contribution to reducing the gap and have an above average reduction of their DUR over the period. For instance, Portugal, Spain and Norway account for 70% of the gap reduction (when excluding the Eurocontrol reallocation effect);

Some States while contributing to the gap reduction, nevertheless still propose an increase of their DUR over 2009-2014, thus departing from the EU-wide target trend over 2009-2014 (-3.2% per annum) (examples are Hungary and Finland which implemented during this period a significant reallocation of cost between terminal and en-route services);

Some States while contributing to the gap reduction, nevertheless still have a relatively high DUR in 2014 (examples are the Slovak Republic, Slovenia, Denmark and Sweden);

Other States have not made any contribution to the gap reduction and still have a high DUR in 2014 (examples are the United Kingdom and Germany).


22

-7,1%-6,7%

-3,9%

3,7%

-4,5%

1,5%

-1,2%-1,8%

-3,4%

-6,8%

-0,2%

-3,2%

0,8%

-4,1%

-1,3%-1,9%

-4,8%

-1,6%

-7,1%

-2,3%

-5,1%

-0,9%

-5,1%

-1,6%

-4,5%

-1,4%-1,5%-2,0%-2,0%

PT

ES-Co

NO

HUBG

FI

CY

EEMT

ES-Ca

IE

SI

LV

DK*

SK

FR

RO

AT

GR*

LT*

NL*

UKBE*

SE

CH*DE

PL*

CZ

IT

-40

-20

-

20

40

60

80

PT ES-Co

NO HU BG FI CY EE MT ES-Ca

IE SI LV DK* SK FR RO AT GR* LT* NL* UK BE* SE CH* DE PL* CZ IT

EU

R20

09 (

revi

sed

DU

R)

ME

UR

2009

(co

ntr

ibu

tio

n t

o c

losi

ng

RP

1 g

ap f

rom

fir

st a

sses

smen

t lo

op

)

-10%

-5%

0%

5%

10%

15%

20%

Ave

rag

e an

nu

al v

aria

tio

n i

n t

he

DU

R 2

009-

2014

Contribution to gap closing over RP1 (MEUR2009) without effects of EUROCONTROL costs reallocation

Average annual decrease 2009-2014

Revised DUR2014 in EUR2009

Figure 15: Factual comparison of contribution to gap closing, proposed DUR 2014 and average annual variation over 2009-2014

* States for which the initial Performance Plan was considered to contribute adequately to the EU-wide cost-efficiency target


23

5 Other Commission Recommendations

5.1 Revision of the risk premium and return on equity

Revision of the assumptions underlying the risk premium and, consequently, the return on equity.



3.d) Czech Republic, Germany, Estonia, Ireland, Spain, France, Malta, Austria, Slovakia, Finland and the United Kingdom should review the assumptions underlying the risk premium and, consequently, the return on equity, and should provide justifications for the significant increases in the cost of capital.

5.1.1 In each individual assessment report (see Volume II), the PRB analyses the potential changes of the Return on Equity (RoE) and the associated risk premium as well as the additional information provided in the revised Performance Plan. Table 1 presents an overview of this information for the States mentioned in the Commission recommendation.

State Information from revised Performance Plans

Austria Austria has neither reviewed the assumptions underlying the RoE (8.6%), nor provided any additional information or justifications for the cost of capital.

Czech Republic Czech Republic has reviewed the assumptions underlying the RoE which has reduced from 7.37% in the initial plan to 7.04% in the revised plan.

Estonia Estonia has reviewed the assumptions underlying the RoE which has reduced from 11.1% in the initial plan to 8.9% in the revised plan. Estonia has also revised downwards the asset base and provided clarifications on the assumptions used to calculate the RoE which leads to the PRB to calculate an effective RoE of 7.7%. A “company risk” premium of 1.2 percentage points has therefore been added which is challenged by airspace users.

Finland Finland has reviewed the risk premium which has reduced from 3.7% in the initial plan to 2.6% in the revised plan.

France France has provided a detailed description of the methodology used to compute DSNA RoE (8%) and provides two reasons for the high value of the risk premium (4.6%). The PRB would like to emphasize that the CAPM assumptions for the equity beta warrant some caution in particular when they are mechanically applied to a State body. Moreover, the reasoning for computing a higher RoE because of opting for a more optimistic traffic forecast does not seem appropriate.

Germany Germany did neither revise the assumptions used to compute DFS risk premium and RoE nor provide detailed justifications for the increase in DFS RoE planned between 2011 (4.0%) and 2012-2014 (annual value of 7.8% on average). However, Germany decided that the additional costs stemming


24

from the new collective agreement signed in October 2011 will be absorbed by the ATSP thus implicitly reducing significantly the planned RoE.

Ireland Ireland has reviewed the assumptions underlying the RoE which has reduced from 9.01% in the initial plan to 7.71% in the revised plan.

Malta Malta has not reviewed the assumptions underlying the RoE and has reported the same RoE (4.8%). However, Malta has used a lower WACC which results in a lower cost of capital.

Slovak Republic The Slovak Republic has reviewed the assumptions underlying the RoE which has reduced from 8.5% in the initial plan to 7.5% in the revised plan.

Spain Spain has significantly reviewed the assumptions underlying the RoE which has reduced from 9.2% in the initial plan to 7.9% in the revised plan.

United Kingdom The United Kingdom has not revised the assumptions underlying the risk premium and the RoE which remains at 11.5%.

Table 1: Additional information on the Return on Equity

5.1.2 The Return on Equity, and more generally the cost of capital, is an important and sensitive part of the determined costs since it is closely related to the degree of profitability of the ANSPs. However, the cost of capital only represents some 5% of the total determined costs.

5.1.3 The PRB notes from its analysis that there is a significant variance in the level of the RoE applied by the ANSPs, the methodology for its calculation as well as the assumptions which have been used by States for its determination.

5.1.4 The PRB recommends that the Commission launches a study to further analyse the issue and come up with recommendations and guidance materials.

5.2 Reassessment of the size of and need for investments

Reassessment of the size of and need for investments necessary to achieve the performance targets over the reference period.



3.e) Bulgaria, Czech Republic, Estonia, France, Italy, Latvia, Hungary, Malta, Portugal, Romania, Slovenia, Slovakia, Finland and United Kingdom should re-assess the size of and need for investments necessary to achieve the performance targets over the reference period, taking account of the opportunity for their rationalisation in the context of functional airspace blocks or regional projects.

5.2.1 In each individual assessment report (see Volume II), the PRB analyses the potential changes of the size of and need for investments necessary to achieve the performance targets over RP1. Table 2 presents an overview of this information for the States mentioned in the Commission recommendation.


25

State Information from revised Performance Plans

Bulgaria No change: Bulgaria confirms that the forecast capex presented in Table 32 of the initial Plan of June 2011 is still valid for RP1 revised targets.

Czech Republic No change: the Czech Republic re-confirmed planned ANSP investments for RP1 as contained in the initial Plan.

Estonia No change but additional justifications: Estonia did not modify the amount of planned capex for each year of RP1 but provided more detailed descriptions of the major capex projects.

France No change but additional justifications: France did not change the amount of planned capex for each year of RP1 but provided more detailed descriptions for the major capex projects. France reconfirms that the increase in capex planned over RP1 is mainly due to the fact that in 2009 and 2010 the level of capex was artificially lower than originally planned since some important investment projects were postponed to future years. France also indicates that the investments planned over RP1 are critical in order to ensure an adequate level of quality of service in the future years.

Italy No change: Italy did not provide new information on the amount of planned capex for each year of RP1. However, Italy specifies that a revision of the investment plan submitted in the initial Performance Plan will be performed in the first months of 2012.

Latvia No change but additional justifications: Latvia did not submit new capex data, but provided more detailed descriptions of the major capex projects.

Hungary No change but additional justifications: Hungary did not modify the amount of planned capex for each year of RP1 but provided more detailed descriptions of the major capex projects.

Malta No change but additional justifications: Malta did not modify the amount of planned capex but provided more detailed descriptions of the major capex projects.

Portugal Deterioration: Portugal has reassessed the amounts and scheduling of the main investment projects for its ANSP (Nav Portugal). Over RP1, the cumulative planned capex has been significantly increased (by some €14.5M) now reaching €47.8M compared to €33.3M in the initial Performance Plan. The PRB notes that the largest increases relate to ITEC e-FDP, North Radar Enhancements and Lisbon ATM System projects.

Romania No change but additional justifications: Romania did not change the amount of planned capex for each year of RP1, but provided more detailed descriptions for the major capex projects. However, the PRB would like to reiterate its reservations and concern on the fact that the programme “ROMATSA 2015+” (some €80M), which is planned to be the backbone of the development of the ANS in Romania for the next 15 to 20 years in line with the SESAR and SES objectives, is planned to be fully amortised within 4 years.


26

Slovenia No change – except for some minor adjustments impacting 2014 costs downwards: Slovenia did not provide any new information.

Slovak Republic No change – except for some minor adjustments made to the forecast capex: The Slovak Republic slightly modified the amount of planned capex of LPS for 2012 and 2013, thereby increasing the RP1 capex by +2.8% in nominal terms.

Finland No change but additional justifications: Finland did not modify the amount of planned capex for each year of RP1 but provided more detailed descriptions of the major capex projects.

United Kingdom No change but additional justifications: The United Kingdom did not change the amount of planned capex for each year of RP1, but provided more detailed descriptions for the major capex projects. UK also describes in its Addendum a number of collaboration initiatives with other partners, whether at FAB level or with other ANSPs sharing common interest.

Table 2: Size of and need for investments necessary to achieve the performance targets

5.2.2 The PRB notes that most States have not resized their capex for RP1.

5.2.3 In view of the traffic development, the PRB considers that the assessment of the size and need for investments impacting the ANSP performance in future reference periods, as well as the monitoring of the implementation of the ANSP’s investment plan during RP1 should be part of the oversight responsibilities of the NSA during RP1.

5.3 References of business cases and/or CBA of investments as well as relevance with the European ATM Master Plan

Provision of references to business cases and/or cost-benefit analyses and describing their relevance in relation to the European ATM Master Plan.

4.a) Member States are requested to specify in national or functional airspace block performance plans the contribution of investments over the reference period to, and impact on, the performance targets by providing references to business cases and/or cost-benefit analyses and describing their relevance in relation to the European ATM Master Plan, in particular as far as the deployment of the first implementation package (IP1) is concerned. This information should be consistent with the information contained in the business plans of air navigation service providers as specified in paragraph (b) of Section 2.2 of Annex I to Commission Regulation (EC) No 2096/2005.

5.3.1 Most States provided additional information about the investments of their ANSP (except Austria, Bulgaria, Switzerland, Lithuania, Malta, Poland, Portugal and Slovenia). The information is presented in a very heterogeneous way.

5.3.2 The PRB reproduces the list of investments in Annex 2 of each individual assessment report (see Volume II) to ensure effective transparency. However, the PRB did not assess the consistency and adequacy of the data provided, or validate ANSPs individual investments, which is a State/NSA responsibility.

5.3.3 The PRB considers that NSAs should monitor and include in their monitoring report, on an annual basis, the difference between ANSP investments recorded in the Performance Plan and actual spent, as well as between the planned date of entry into operation and the actual situation.


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5.4 Assumptions and rationale related to uncontrollable costs

Provision of the assumptions and rationale related to uncontrollable costs.

4.b) Member States are requested to provide the assumptions and rationale for establishing costs which may be deemed out of control in accordance with Article 11a(8) of Regulation (EC) No 1794/2006, with a view to facilitating the necessary adjustments at the end of the reference period.

5.4.1 In each individual assessment report (see Volume II), the PRB reproduces the information about the various uncontrollable costs factors identified in the revised Performance Plans in a harmonized way.

5.4.2 The PRB notes that:

the majority of States provided additional information (except Austria, Czech Republic, Denmark-Sweden, Estonia, Germany, Finland, Ireland, Latvia, Lithuania, Malta, Norway and Portugal) but only a few attempted to quantify the potential risk or the underlying assumptions, particularly related to pension costs;

all States, with the exception of one (Bulgaria), have decided to leave all possibilities open by selecting all five possible uncontrollable cost factors.

5.4.3 The PRB notes that there is a significant heterogeneity in the presentation of these costs across States: some States providing lot of details, while other States are just listing the five factors provided by the charging scheme Regulation.

5.4.4 In almost all cases, there is a lack of information and quantification of the assumptions used to compute the determined costs which will most probably lead to problems of interpretation by 2015 when States will have to decide which uncontrollable costs have to be carried over to RP2.

5.4.5 The PRB would like to highlight two issues on these uncontrollable costs:

some States have added inflation as one possible uncontrollable cost. The PRB would like to point out that inflation is treated separately and differently through an annual adjustment of the chargeable unit rate during RP1, not at the end of RP1;

some States have added cost items which seem to go beyond what is provided by the charging scheme Regulation, in particular but this is not limited to: Bulgaria (FAB), Romania (pension items), Spain (aerodrome ATC liberalization), United Kingdom (capex pass through).

5.4.6 The PRB is not in a position to assess the legality of these proposed uncontrollable cost factors and suggests that the Commission examine the consistency of these costs with the legal requirements of the charging scheme Regulation and provide possible guidance to States.

5.4.7 Moreover, the PRB considers that since this is a new concept, it has to be monitored carefully during RP1 and should be part of the annual monitoring report by NSAs. It is likely that with the benefit of some experience during RP1, stakeholders will be in a position to draw conclusions and lessons learnt on the use of the uncontrollable costs for RP2.


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5.5 Aggregation of targets at FAB level

Communication for information to the Commission aggregated performance targets at FAB level.

4.c) Member States of a functional airspace block, in conjunction with the Performance Review Body, which have not adopted a performance plan with targets at functional airspace block level, are requested to communicate for information to the Commission aggregated performance targets highlighting the consistency at functional airspace block level with the European Union-wide performance targets as specified in Article 5(3) of Regulation (EU) No 691/2010.

5.5.1 At the time of drafting this report, six FABs out of nine (Danish-Swedish FAB, Danube, FABCE, FABEC, SW Portugal-Spain and FAB UK-IR) have provided a specific document (or a specific part in their plan) aggregating the national targets. Figure 16 presents a map of the FABs having provided this data.

5.5.2 Figure 17 shows the main figures provided by FABs in relation to capacity and cost-efficiency targets.

5.5.3 For capacity, both the capacity targets and the comparison with reference values are provided.

NEFAB

UK-IR

FAB EC

SW Portugal-Spain

DK-SE

Baltic

CEFAB

Blue MED

Danube

@ E

UR

OC

ON

TR

OL

Figure 16: Map of FABs having provided FAB targets or aggregated targets at FAB level

5.5.4 For cost-efficiency, Figure 17 shows the cost-efficiency targets as well as the annual average evolution over the period 2009-2014 and 2011-2014.

Capacity Cost-efficiency

Targets Targets vs. Ref values Targets 2012 2013 2014 2012 2013 2014 2012 2013 2014

2009-2014

AAGR

2011-2014

AAGR

Baltic Not available Not available Not available Not available

Blue Med Not available Not available Not available Not available

Danube 0,07 0,08 0,07 0,00 -0,01 -0,01 36,26 35,22 33,71 -4,7% -3,6%

DK-SE 0,20 0,15 0,08 +0,16 +0,10 0,00 58,47 57,17 54,97 -2,5% -3,1%

FAB CE13

0,47 0,44 0,15 +0,06 +0,06 -0,18 51,11 50,70 48,84 -0,6% -1,2%

FAB EC 0,77 0,68 0,50 +0,25 +0,21 +0,10 66,21 64,79 63,16 -2,2% -2,0%

NEFAB Not available Not available Not available Not available

SW Portugal-Spain 0,84 0,78 0,52 +0,27 +0,32 +0,18 61,57 60,97 58,94 -6,8% -2,9%

UK-IR 0,325 0,287 0,292 -0,01 -0,01 0,00 58,66 58,71 56,60 -0,8% -1,4%

Figure 17: Targets/aggregated targets at FAB level

13 It seems that the FABCE figures for capacity have been incorrectly calculated by adding the number for flights per country, therefore leading to double counting. PRB’s estimates are more in the order of 0.79, 0.74 and 0.25 for each year of RP1, leading to +0.38, +0.36, -0.08 compared to FABCE’s capacity reference values.


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6 Conclusions and PRB recommendations

6.1 Conclusions

6.1.1 All States, with the exception of Cyprus submitted revised performance plans on time.

6.1.2 States have made a major collective effort to close the gap with the capacity and cost-efficiency EU-wide targets. However, the revised Performance Plans collectively still fall short of the EU-wide targets for RP1 by a small margin (0.17 min/flight in capacity in 2014, 1% in determined unit rate in cost-efficiency over RP1).

6.1.3 A first draft of the Network Manager Performance Plan (NMPP) was submitted to the NMB at the end of March. The final version, once adopted, will complete the set of performance plans for RP1.

6.1.4 The PRB notes that the aggregated traffic forecast from the revised Performance Plans is close to the figures used for the EU-wide performance targets. It also notes that the latest STATFOR traffic forecast (February 2012) is forecasting a growth of 12.1% over 2009-2014, significantly below States’ forecasts (-4.7%), but remains within the bounds of the alert thresholds (10%).

6.1.5 Such change in traffic levels will make it easier to reach the EU-wide capacity target. The Network Manager estimates that, all else being equal, the reduced traffic implies an EU-wide delay performance of 0.32 min/flight in 2014, i.e. below the EU-wide target for RP1. The NMPP and its implementation may bring further improvements.

6.1.6 As regards cost efficiency, the PRB notes that:

the revised Performance Plans collectively are close to the EU-wide targets and only fall short by a small margin (-0,3% in 2012, +1,4% in 2013 and +1.7% in 2014. Overall, +1% over RP1);

the revised Performance Plans collectively represent a significant improvement over initial plans. Their implementation revised plans will result in savings of some €2.4Bn over RP1 compared to the 2009 unit rate baseline;

moreover, if the revised traffic forecast materialises, application of the risk sharing mechanism of the Charging regime will result in revenues for 2014 being €143M lower than in the revised Performance Plans;

under the Charging regime, unlike full cost-recovery, this revenue is lost and cannot be recovered through subsequent adjustment to the unit rate. The Scheme therefore creates strong incentives on for ANSPs to manage their costs in response to the traffic downturn, while mitigating the full impact through the traffic risk-sharing mechanism.

6.1.7 Overall, savings in delays between the initial and the revised performance plans are expected to compensate the increase in unit rates linked with risk sharing by a considerable margin.

6.1.8 The PRB considers that the traffic development needs to be carefully monitored by States and the European Commission.

6.1.9 As already highlighted in its first assessment report in September 2011, the PRB considers that delivering the Performance Plans is at least as important as adopting them. In particular:

For the capacity target, the day-to-day management of capacity at ANSP and Network level will be essential during RP1; and


30

For the cost-efficiency target, NSAs should monitor closely the total amount of uncontrollable costs during RP1, and report annually to the Commission.

6.1.10 In view of revised traffic forecasts, reopening the Performance Plans would very unlikely result in improved cost-efficiency targets.

6.1.11 The PRB acknowledges the efforts made by Member States to include safety performance and the overriding safety requirements in the Performance Plans. The Commission would expect that such efforts continue in the on-going performance monitoring phase and that all the remaining PRB recommendations are addressed during such phase.

6.1.12 The PRB stresses the need to monitor the interrelations between Safety and the other Key Performance Areas, to undertake actions as necessary and to report to the Commission on the monitoring of interrelations with safety.

6.2 PRB Recommendations

6.2.1 For the reasons detailed in Section 6.1, the PRB recommends the Commission to accept the revised Performance Plans, subject to the detailed recommendations below, and not ask States to revise their Performance Plans a second time. The focus now should be on delivery of the Performance Plans supported by regular and robust monitoring of performance by NSAs and the PRB.

6.2.2 Some of the PRB’s recommendations to the Commission are designed to form the basis for a possible Commission Decision or Recommendation securing what States have proposed and paving the way for RP2. Other PRB recommendations are designed to guide possible future actions by the Commission, notably on RP1 monitoring.

6.2.3 During the adoption process of the Performance Plans (both the initial assessment and this revised assessment), the PRB noted that the internal national procedures for the preparation and adoption of Performance Plans was not always consistent with the performance scheme process, leading some States to have their targets adopted prior to the adoption of EU-wide targets by the Commission or other States to consider that the assessment of the Performance Plans came after the adoption by the State and could not easily be reflected at national level. This situation should be resolved for RP2.

6.2.4 It must be noted that Cyprus did not provide any formal revised plans or targets. The PRB considers that the informal version sent on 10 January 2012 shows some significant improvements from the initial one and that Cyprus should be invited to formally sign this version.

6.2.5 As already highlighted in its first assessment report in September 2011, the PRB considers that delivering the performance plans is at least as important as adopting them. A number of key information will have to be provided by NSAs on an annual basis and the PRB has identified a few of them during this assessment in particular related to “uncontrollable costs” and investments.

6.2.6 Finally, the PRB notes that some States did not provide to the Commission the aggregated targets at FAB level as well as a statement highlighting the consistency with the EU-wide targets as specified in Article 5(3) of the performance scheme Regulation and as requested in Commission recommendation. States should elaborate this information together with FAB partners and communicate it to the Commission.

6.2.7 Therefore the PRB recommends the following action:

R0-GEN The PRB recommends the Commission to accept the revised Performance Plans, subject to the detailed recommendations below, and not ask States to revise their Performance Plans a second time.


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R1-GEN All States should align their national performance planning process for RP2 to ensure that EU-wide targets are properly taken into account into their Performance Plans and that the approval of these Plans at national level does not pre-empt Commission assessment.

R2-GEN The PRB considers that performance monitoring is a critical step and that the European Commission should facilitate a harmonised programme to ensure that all States have sufficient guidance and tools to provide adequate monitoring and reporting.

In particular, the Commission should require States to monitor and report on a yearly basis:

(i) the difference between the determined costs and the actual costs, in particular to clearly identify the uncontrollable costs and scrutinize the development and relevance of these costs;

(ii) the difference between ANSP investments recorded in the Performance Plan and actual spending. This should be included in the NSA’s annual report.

R3-GEN The PRB considers that States should communicate for information to the Commission aggregated performance targets highlighting the consistency at FAB level with the EU-wide performance targets as specified in Article 5(3) of the performance scheme Regulation.

R4-GEN The PRB considers that the revised targets contained in the draft revised Performance Plan of Cyprus which was sent to the Commission on 10 January 2012 represent a significant improvement compare to the initial targets. Therefore, the Commission should request Cyprus to formally sign this version as the final version for RP1 and send it officially to the Commission.

STATES TO WHICH THESE RECOMMENDATIONS REFER

R0-GEN All States but Czech Republic and Poland.

R1-GEN All States.

R2-GEN All States.

R3-GEN States from the following FABs: Baltic, Blue MED, NEFAB.

R4-GEN Cyprus

CAPACITY

6.2.8 The majority of revised Performance Plans meets the reference values, which were provided by EUROCONTROL and used to assess consistency with the EU-wide capacity target in accordance with the performance scheme Regulation.


32

6.2.9 However, one FAB (FABEC) and three national Performance Plans (Poland, Greece and Spain) have indicated that in view of the short duration of RP1, they were not able to meet their respective reference value in 2014, generating significant operational and economic penalties to airspace users, estimated in the order of €119M in 2014, and negate efforts made on cost-efficiency if not resolved.

6.2.10 Since the implementation of corrective actions takes time, it is important not to wait for RP2 to start developing these actions. The PRB is of the opinion that these States should be assisted by the Network Manager.

6.2.11 Therefore the PRB recommends the following actions with regards to capacity:

R1-CAP States should require their ANSPs to develop capacity plans that meet the 2014 reference value at the earliest possible date in RP2, with the assistance of the Network Manager, and should communicate these plans to the Commission by the end of 2012 at the latest.

Where these revised capacity plans also improve the 2014 national/FAB capacity targets, States should adopt and communicate to the Commission revised capacity targets by June 2013 at the latest.

R2-CAP States should ensure that ANSPs amend their capacity plans by the end of 2012 at the latest to ensure that sufficient capacity is provided to meet the targets of the adopted Performance Plans.


R1-CAP FABEC States, Poland, Greece and Spain

R2-CAP All States, in particular Austria, Cyprus and potentially France, Greece, Poland, Spain, Switzerland and Germany.

COST-EFFICIENCY

6.2.12 Twenty States were asked to adopt revised cost efficiency targets. Most of them have improved their cost-efficiency target during the revision of their Performance Plans. When excluding the effect of the reallocation of Eurocontrol costs, the PRB notes that six States have left their target unchanged and three States have deteriorated their targets. Out of the States for which the initial Performance Plan was considered to contribute adequately to the EU-wide cost-efficiency target, two have presented revised targets for cost efficiency, one showing an improvement in the DURs and the other a deterioration.

6.2.13 The PRB notes that, should the STATFOR February 2012 traffic forecast materialize, it would require a significant adaptation of ANS costs, and that the return on equity would be in many cases sufficient to absorb the revenue shortfalls without incurring losses.

6.2.14 The PRB notes that Poland was assessed as contributing adequately as far as the cost efficiency target was concerned but that Poland was asked to revise its capacity target. Poland has improved its capacity target but has deteriorated its cost-efficiency targets leading to an overall deterioration (around +€430k over RP1) compared to the initial Performance Plan.

6.2.15 The PRB notes that Czech Republic was asked to improve its cost-efficiency target but that this target has deteriorated in its revised Performance Plan.


33

6.2.16 The “uncontrollable costs” factors were required to be identified in the Performance Plan. A legal check should be carried out by the Commission since this element will be critical for the effective achievement of the adopted targets of the Plans.

6.2.17 Finally, as explained in Section 4.5, the PRB considers that two States require some specific actions: Italy (on the alert thresholds) and Romania (on the depreciation life of one key investment).

6.2.18 Therefore the PRB recommends the following actions with regards to cost-efficiency:

R1-CEF The Commission should ask the Czech Republic to adopt its initial Performance Plan (June 2011) since the revised cost-efficiency targets led to genuine deterioration.

R2-CEF The Commission should ask Poland to adopt its initial Performance Plan (June 2011) since the revised targets (capacity and cost-efficiency) led to overall genuine deterioration and the revision of the cost-efficiency target was not requested by the Commission in its Recommendation.

R3-CEF The Commission should assess whether the cost items identified in the Performance Plans as uncontrollable cost factors are compatible with the charging scheme Regulation.

R4-CEF The Commission should formally note that some States were asked to revise their cost-efficiency targets but left them unchanged and that this should be considered in the assessment of future Performance Plans for RP2 in 2014.

R5-CEF The Commission should accept the revised cost-efficiency targets proposed by Italy in its Addendum provided that:

(i) Italy specifies a value for the local traffic alert threshold in consultation with airspace users and provides the justifications of the consistency of this local alert threshold with the EU-wide traffic threshold;

(ii) Such alert threshold is only triggered on the basis of a full year data reviewed quarterly by the NSA in liaison with the Commission and the PRB and that the local alert only applies to the local circumstances relating to the consequences of the Libyan crisis and not to general downturn;

(iii) Italy provides a detailed description of the practical implementation of the application of the traffic alert mechanism;

(iv) Italy reviews its determined costs and following review confirms to keep targets adopted for other KPAs at the levels specified in the Addendum to the Performance Plan or better;

(v) Italy removes the specific alert mechanism on costs from its Performance Plan.

The Commission should note that the PRB will carefully monitor and consider the RP1 outcome in the context of the second reference period (RP2).

R6-CEF The Commission should ask Romania to reassess the depreciation life of ROMATSA’s major investment “ROMATSA 2015+” from 4 years to the “expected operating life” as required by Article 6(2) of the charging scheme regulation, being understood from Romania’s Performance Plan that this


34

will not affect RP1 Determined Unit Rates but RP2 ones.


R1-CEF Czech Republic.

R2-CEF Poland.

R3-CEF All States.

R4-CEF Austria, France, Germany, Romania, Sweden, United Kingdom.

R5-CEF Italy.

R6-CEF Romania.


35

ANNEX I – Capacity targets

2012 2013 2014 2012 2013 2014 2012 2013 2014

Austria 0,30 0,24 0,23 1,39 1,28 0,65 0,85 0,98 0,23 -0,54 -0,30 -0,42Czech Republic 0,15 0,16 0,15 0,15 0,16 0,15 0,15 0,16 0,15 0,00 0,00 0,00Hungary 0,03 0,07 0,07 0,30 0,07 0,03 0,30 0,07 0,03 0,00 0,00 0,00Slovak Republic 0,24 0,22 0,19 0,30 0,32 0,19 0,30 0,32 0,19 0,00 0,00 0,00Slovenia 0,31 0,26 0,22 0,31 0,03 0,03 0,31 0,03 0,03 0,00 0,00 0,00FAB CE 0,41 0,38 0,33

Ireland 0,09 0,13 0,14 0,14 0,14 0,14 0,07 0,12 0,14 -0,07 -0,02 0,00United Kingdom 0,31 0,28 0,27 0,36 0,31 0,31 0,31 0,26 0,26 -0,05 -0,04 -0,04UK-IR 0,33 0,30 0,29

Belgium/Lux 0,25 0,27 0,21 <0,25 <0,27 <0,21France 0,34 0,30 0,24Germany 0,35 0,32 0,29The Netherlands 0,12 0,14 0,18 0,20 0,20 0,18Switzerland 0,22 0,18 0,14 0,32 0,28 0,24FABEC 0,52 0,47 0,40 0,77 0,68 0,50 0,77 0,68 0,50 0,00 0,00 0,00

Poland 0,32 0,31 0,26 1,50 1,00 0,50 1,00 1,50 0,48 -0,50 0,50 -0,02Lithuania 0,04 0,05 0,06 0,04 0,05 0,06 0,04 0,05 0,06 0,00 0,00 0,00Baltic 0,30 0,29 0,24

Cyprus 0,93 0,59 0,30 0,93 0,59 0,30 0,93 0,59 0,30 0,00 0,00 0,00Greece 0,37 0,32 0,26 1,20 1,35 1,50 1,10 1,00 0,95 -0,10 -0,35 -0,55Italy 0,14 0,14 0,12 0,14 0,14 0,12 0,14 0,14 0,12 0,00 0,00 0,00Malta 0,02 0,03 0,05 0,02 0,03 0,05 0,02 0,03 0,05 0,00 0,00 0,00Blue Med 0,34 0,28 0,21

Bulgaria 0,11 0,14 0,12 0,11 0,14 0,12 0,11 0,13 0,11 0,00 -0,01 -0,01Romania 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00Danube 0,07 0,09 0,08

Denmark 0,06 0,06 0,07Sweden 0,02 0,03 0,06DK-SE 0,04 0,05 0,08 0,20 0,15 0,08 0,20 0,15 0,08 0,00 0,00 0,00

Estonia 0,11 0,16 0,22 0,11 0,16 0,22 0,11 0,16 0,22 0,00 0,00 0,00Finland 0,10 0,13 0,16 0,05 0,03 0,02 0,05 0,03 0,02 0,00 0,00 0,00Latvia 0,02 0,04 0,05 0,02 0,04 0,05 0,02 0,04 0,05 0,00 0,00 0,00Norway 0,04 0,04 0,05 0,04 0,04 0,05 0,04 0,04 0,05 0,00 0,00 0,00NEFAB 0,07 0,09 0,12

Portugal 0,28 0,21 0,16 0,25 0,20 0,15 0,25 0,20 0,15 0,00 0,00 0,00

SW Port. - Spain 0,57 0,46 0,34

1,18 1,04 0,76 1,07 1,00 0,67

0,70 0,60 0,50

Values for 2012 and 2013 are only indicative figures which will be used for monitoring. The capacity targets are only set for 2014.

EU-wide targets

Aggegated targets

0,00 0,000,80 0,75 0,50 0,000,31 0,80 0,75 0,500,52 0,42

Danish / Swedish

NEFAB

SW Portugal - Spain

Spain

FAB EC

Baltic

Blue Med

Danube

FAB CE

UK - IR

2012 2013 2014

Initial targets(June 2011)

Revised targets(January 2012)

Delta

Reference Values Capacity targets

FABs Performance Plan


36

ANNEX II – Cost-efficiency targets

2012 2013 2014 2012 2013 2014 2012 2013 2014

Austria 64,13 63,06 59,74 64,48 63,45 60,10 0,35 0,39 0,35Czech Republic 40,54 40,13 39,66 41,72 41,31 40,80 1,18 1,18 1,14Hungary 38,91 40,46 39,02 38,74 39,44 38,40 -0,17 -1,02 -0,62 Slovak Republic 56,47 55,43 53,11 56,51 55,45 53,12 0,04 0,02 0,01Slovenia 67,26 65,37 62,87 67,26 65,37 60,30 0,00 -0,00 -2,57

Ireland 31,08 30,08 29,40 30,77 30,00 29,31 -0,31 -0,08 -0,09 United Kingdom 68,99 69,20 66,49 68,99 69,21 66,49 0,00 0,01 0,00

Belgium/Lux 67,86 65,47 63,21 67,86 65,47 63,21 0,00 0,00 0,00France 62,78 61,54 59,99 62,78 61,54 59,99 0,00 0,00 0,00Germany 71,42 69,81 67,81 71,42 69,81 67,81 0,00 0,00 -0,00 The Netherlands 58,86 57,47 56,84 58,86 57,47 56,84 0,00 0,00 0,00Switzerland 71,68 71,10 71,04 71,68 71,10 71,04 0,00 0,00 0,00

Poland 33,54 33,43 31,62 33,65 33,77 31,91 0,11 0,34 0,29Lithuania 47,00 45,37 44,23 47,00 45,37 44,23 0,00 0,00 0,00

Cyprus 34,75 34,61 34,46 33,59 32,98 32,42 -1,16 -1,63 -2,04 Greece 32,55 31,36 30,02 32,55 31,36 30,02 -0,00 -0,00 -0,00 Italy 70,31 68,21 65,96 71,38 69,13 66,78 1,07 0,92 0,82Malta 27,97 26,88 25,14 25,86 23,88 22,92 -2,10 -3,00 -2,22

Bulgaria 38,29 37,84 36,35 37,15 36,56 34,57 -1,14 -1,28 -1,77 Romania 35,78 34,51 33,26 35,78 34,51 33,26 0,00 0,00 0,00

Denmark 63,77 63,38 61,42 63,15 63,28 61,30 -0,62 -0,10 -0,12 Sweden 55,77 53,80 51,55 56,20 54,26 51,98 0,43 0,46 0,42

Estonia 22,59 22,12 22,17 20,31 19,78 19,84 -2,28 -2,34 -2,33 Finland 49,94 49,06 47,37 47,56 46,54 44,43 -2,39 -2,52 -2,94 Latvia 28,78 27,65 26,95 28,43 27,34 26,64 -0,34 -0,31 -0,31 Norway 56,63 55,43 53,51 55,34 53,58 51,18 -1,30 -1,85 -2,33

Portugal 41,20 41,06 40,67 34,49 34,49 34,14 -6,71 -6,57 -6,53 Spain continental 71,37 70,64 68,16 70,08 69,44 66,92 -1,28 -1,20 -1,24 Spain canarias 62,36 60,40 57,73 61,48 59,54 56,84 -0,88 -0,86 -0,89

58,08 57,04 55,22 57,73 56,68 54,83 -0,35 -0,36 -0,39

57,88 55,87 53,92

FAB CE

UK - IR

Revised DUR(€2009/SU)

(January 2012)

Initial DUR(€2009/SU)(June 2011)FABs Performance Plan

Delta

EU-wide targets

SW Portugal -

Spain

Aggegated targets

Danish / Swedish

NEFAB

Blue Med

Danube

FAB EC

Baltic


37

Annex III – Description of Volume II

Volume II contains the assessment reports for each of the following revised national or FAB Performance Plan.

FABs Performance Plans Austria Czech republic Hungary Slovak republic

FAB CE

Slovenia

Ireland UK - IR

United Kingdom

Belgium / Luxembourg France Germany The Netherlands Switzerland

FAB EC

FABEC

Poland Baltic

Lithuania

Cyprus Greece Italy

Blue Med

Malta

Bulgaria Danube

Romania

Danish / Swedish Denmark-Sweden FAB

Estonia Finland Latvia

NEFAB

Norway

Portugal SW Portugal - Spain

Spain


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References

i Commission Regulation (EU) No 691/2010 of 29 July 2010 laying down a performance scheme for air navigation services and network functions.

ii Commission Decision of 29 July 2010 on the designation of the Performance Review Body of the Single European Sky and EUROCONTROL Permanent Commission Directive N°10/74 of 15 September 2010 [C(2010)5134 final].

iii Commission Recommendation of 23.11.2011 on the revision of targets contained in performance plans under Commission Regulation (EU) N°691/2010 [C(2011) 8329 final].

iv Commission Decision of 21 February 2011 setting the European Union-wide performance targets and alert thresholds for the provision of air navigation services for the years 2012 to 2014 (OJ L 48, 23.2.2011, p.16).

v “SES II Performance Scheme. Assessment of National/FAB Performance Plans with Performance Targets for the period 2012-2014”. Prepared by the Performance Review Body (PRB) of the Single European Sky. 20 September 2011.

vi EUROCONTROL Medium-Term Forecast of Service Units 2012-2017 - February 2012 update, http://www.eurocontrol.int/documents/short-and-medium-term-forecast-2012-2017-update.

vii European airline delay cost reference values, Final Report (Version 3.2), 31 March 2011, EUROCONTROL PRU, http://www.eurocontrol.int/documents/european-airline-delay-cost-reference-values.

viii IATA’s Air Transport Market Analysis (January 2012) http://www.iata.org/whatwedo/economics/Pages/traffic_analysis.aspx as well as Users views on Industry update presented at the EUROCONTROL enlarged committee for route charges on 15 March 2012.

Documents

SES II Performance Scheme Assessment of revised National ... · PRB assessment of revised National / FAB Performance Targets for RP1 (2012-2014) ... change from some stakeholders