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Funding of ACSA

ACSA. Central American Agency for Aeronautical Safety. Funding of ACSA. PASO October, 2008. CONTENT. General consideration for funding a RSOO COCESNA: Economies of Scale Financing ACSA Budget Distribution The importance of Cooperation Projects.

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Funding of ACSA

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  1. ACSA Central American Agency for Aeronautical Safety Funding of ACSA PASO October, 2008

  2. CONTENT • General consideration for funding a RSOO • COCESNA: Economies of Scale • Financing ACSA • Budget Distribution • The importance of Cooperation Projects

  3. GENERAL CONSIDERATIONS FOR FUNDING A RSOO • When establishing a RSOO initially there should be an estimate of the costs of maintaining the organization • Legal and organizational structure • Administrative and office equipment • Personnel training • Office resources • Additional costs

  4. GENERAL CONSIDERATIONS FOR FUNDING A RSOO • Member States must determine the necessary financial resources to start the organization and to effectively maintain it. • Contributions from the States • Financial aid • Cooperation Projects • Commercialize services

  5. GENERAL CONSIDERATIONS FOR FUNDING A RSOO • The amount of financial resources required for organization will depend on the objectives, functions and tasks for which it was created. • There are three models of financial sustainability that have in practiced in regional organizations.

  6. GENERAL CONSIDERATIONS FOR FUNDING A RSOO EASA European Contributions Certification Fees

  7. GENERAL CONSIDERATIONS FOR FUNDING A RSOO JAA National Contributions Income from Publications and Training

  8. GENERAL CONSIDERATIONS FOR FUNDING A RSOO ACSA Mother Organization Cooperation Projects Over Flight Fees

  9. COCESNA: ECONOMIES OF SCALE What are economies of scale? Is the result of practices through which a business or organization produces more for a reduced average cost. Distribute fixed costs over an increased number of products

  10. COCESNA: ECONOMIES OF SCALE What are the benefits of economies of scale? • Reduction of Costs • Increased efficiency • Costly inputs • Sharing of inspectors • Specialization • Better organizational skills of resources • Learning inputs

  11. COCESNA: ECONOMIES OF SCALE What are the threats to economies of scale? • Cost of communication • Duplication of efforts • Top-heavy companies • “Office Politics” • Isolation of decision makers • Slow response time • Inertia (unwillingness to change) • One on one communication channels become costly. • Communication will be carried out by groups of employees. • Reduced communications • Management workforce is too costly. • Reduction of productivity. • Working managers will minimize the negative impact on productivity. • Lack of consequences can lead to poor decisions. • Resistance to change

  12. Share objectives, strategies and activities • Maintain highly qualified technical personnel • Create multinational teams • Develop harmonized and standardized regulations and procedures • Communication is vital COCESNA: ECONOMIES OF SCALE Factors to achieve economies of scale:

  13. Aeronautical Industry Requirements (Chicago Convention) COCESNA Costa Rica El Salvador Belice Guatemala El Salvador Honduras Nicaragua Honduras Nicaragua Costa Rica Belize Guatemala COCESNA: ECONOMIES OF SCALE

  14. Integrated Regional System of Air Navigation, Aeronautical Safety and Training Aeronautical Safety Aeronautical Training Air Navigation COCESNA El Salvador Costa Rica Honduras Nicaragua Costa Rica Costa Rica Belize Guatemala El Salvador Honduras Nicaragua Belize Guatemala COCESNA: ECONOMIES OF SCALE

  15. COCESNA: INCOME SOURCES • Article 22 contracting parties agree on: • Providing a total amount of US$100,000.00 among the Member States. • 2) Acquire or surrender to the Corporation the use of equipment necessary for the development of its functions in each of the Member States. Article 23 contracting parties agree on: 1) The Corporation shall maintain its financial equilibrium with its own resources, with the exception of contributions from the contracting parties cited in Article 22, and loans mentioned in this Article and Article 24. 2) It will establish tariffs and conditions for fees to airspace users, and will impose and collect these fees. Article 24 contracting parties agree on: 1) The Corporation may obtain loansin the national and international financial markets, as long as these are necessary for achieving its objectives. The contracting parties, when agreed unanimously, shall guarantee in equal proportions any loans which might be contracted by the Corporation.

  16. COCESNA: INCOME SOURCES Central American FIR Approximate Area: 2,639,054 km2

  17. COCESNA: INCOME SOURCES COCESNA is an international organization of Central American Integration, a non-profit organization that obtains self-sustainability and development resources through the provision of the following services: Air Navigation Services (ATS/AIS) Rental and Maintenance of Equipment Nav Aids Verification and Certification Aeronautical Safety Services Aeronautical Telecommunications Aeronautical Training Services

  18. COCESNA: INCOME SOURCES Aeronautical Safety Services Technical Assistance in Aeronautical Safety Software Products: Regional Aeronautical Information System Technical Assistance in AGA, AVSEC and ATM Technical Assistance in Audits Oversight & Certification Regulations Training

  19. FINANCING ACSA • Attaining sustainability has been a goal of the organization as a whole. • ACSA has been financed mainly by COCESNA, through a yearly budget. • Cooperation Projects • Sale of services to other States

  20. BUDGET DISTRIBUTION Integrated Regional System of Air Navigation, Aeronautical Safety and Training Central American Agency of Air Navigation (ACNA) Central American Agency of Aeronautical Safety (ACSA) Central American Institute of Aeronautical Training (ICCAE) Supporting Units (Financial, Administrative and Management)

  21. BUDGET DISTRIBUTION Integrated Regional System of Air Navigation, Aeronautical Safety and Training Throughout the years COCESNA has distributed its resources in developing projects, improvement programs and sustainability of the operations, technical and management areas. Operative Investment Contribution to Member States Contribution to Member States COCESNA COCESNA

  22. Investments & Operations (in %)Base 1999

  23. BUDGET POLICIES • Budget classified as: • Operative • Investment COCESNA • Investment Member States • Budget is programmed monthly according to the tasks and projects established in the Operational Annual Plans.

  24. BUDGET POLICIES • Budget is presented to the Directive Council and defended for its approval. • Monthly follow up of the assignment, execution and availability of the budget. • Quarterly the budget is liquidated and decisions are made in regards to the surplus.

  25. ACSA’s BUDGET EVOLUTION

  26. ACSA’s BUDGET DISTRIBUTION

  27. COOPERATION PROJECTS • Cooperation Projects have been a pillar for the improvement of the aviation safety in the region and the development and strengthening of the Agency. • All projects have had a counter part from COCESNA and a non refundable grant from the donning organization.

  28. COOPERATION PROJECTS • IDB/COCESNA 2001-2004 • Strengthening of the Regulatory and Institutional Framework • US$6 million • US$1.7 million > COCESNA • Strengthen the institutional framework of the safety regional system and help establish a harmonized system • Develop a regional information system • Modernize the Civil Aviation Authorities

  29. IDB PROJECT IN ACSA

  30. COOPERATION PROJECTS • EU/COCESNA Phase I 2001-2003 • Improve Aviation Safety in Central America • € 1,798,686 • € 443,404 > COCESNA • Quality • OPS, PEL and AIR • Regulations • Training • Incidents and Accidents

  31. COOPERATION PROJECTS • EU/COCESNA Continuation Phase 2004-2006 • € 1,252,743 • € 437,743 > COCESNA • Strengthen the regional institutional framework. • Develop and implement a regional harmonized regulatory system. • Define future safety regional needs.

  32. EU PROJECT IN ACSA

  33. FUTURE FINANCING ALTERNATIVES • The objective is to seek the financial sustainability of ACSA • Commercialization of services provided by ACSA • Technical Assistance • Training • Oversight activities

  34. CONCLUSIONS • The economic reality of every region in the world are the limited resources to unlimited requirements.

  35. CONCLUSIONS • The economic success of a RSOO lays on the commitment of the States to sustain financially the organization, on the disposition established to acquire financial sustainability and on an effective and efficient practice of economies of scale.

  36. QUESTIONS?

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