Origin of performance review

1. Performance Review Commission, and performance management of the European ATM systemKeith C. Williams, Chairman PRC

2. Origin of performance review • 1997: European ATM Institutional Strategy • Moving from solutions-based to performance-oriented strategy • Includes the creation of a strong, transparent, independent European performance review and target setting system • Performance Review Commission (PRC) advises on ATM matters • Performance indicators • Proposed performance targets • Guidelines for economic regulation • Incorporated in EUROCONTROL Revised Convention • 1998: Creation of PRC (12 independent members) • Supported by permanent Performance Review Unit (10 p) • 2004: Performance Review is part of Single European Sky regulations

3. Role of Performance review • Feedback information for policy makers, ANS management, stakeholders • Closes the performance loop • Least intrusive form of regulation

4. PRC documents Performance Review Reports • Demand for ANS: Traffic • Provision of ANS • Safety • Capacity/Delays • Flight efficiency • Cost-effectiveness • Special items ATM Cost-Effectiveness reports (ACE) • ANSP Benchmarking • Factual data • Cross-ANSP comparisons • Trend analysis Special reports • E.g. Fragmentation, Civil/Military 37 States 9.6 M flights Available on the web www.eurocontrol.int/prc

5. How the PRC analyses ANS performance ANS Key Performance Areas Performance Drivers Performance Indicators Aviation performance Safety Management Accidents Incidents Safety Legislative, Cultural Env. Safety maturity Traffic demand Capacity Delays Airline Performance Ground Delays Capacity Horizontal Flight efficiency Airspace design & use Flight Efficiency ANS Performance Civil/Military use of airspace Vertical Flight Efficiency Airport Performance Complexity Productivity ANSP costs (88%) Cost Effectiveness ATCO Unit Costs Cost of living Other costs (12%) Support Costs Fragmentation

6. Safety • Agreed performance objectives • “Number of accidents, severe incidents shouldn’t increase” • Interim target: agreed safety management maturity in all States/ANSPs by end 2008 • Mechanisms to deliver performance • Regulations: In place; complete and uniform application is an issue • Safety management: Maturity improving • Progress to date • Many actions in progress • Incident reporting • Information flow to be firmed up • Legal and cultural impediments • Key Performance Indicators being developed • Limited trend information • Severe incidents don’t appear to increase

7. ATM capacity and delays Focus on ground delays Airborne delays assessed under flight-efficiency • Agreed performance objectives • “Sufficient [en-route] capacity to accommodate demand in typical busy hours” • ATFM En-route delay < 1 min/flight (near optimum) • Performance management • Capacity planning and management coordinated through EUROCONTROL • Magnitude • ATFM delay cost: En-route € 550M, Airport € 500M • Progress to date • ATM-related delays: 21% of Air transport delays • Major improvements since 1999, but challenge due to sustained traffic growth • Main Issues • Matching capacity and demand efficiently • Main issue is airport capacity (outside ATM) Managed by ATM: 21% Key Performance Indicator

8. ATFM Delays: Target setting • Trade-off delay/cost of capacity • Target setting based on understanding of optimum

9. ActualRoute (A) Direct route Extension G D Route Extension Direct Course (D) A TMA Interface 30 NM Great Circle (G) Flight Efficiency • No agreed performance objective yet • Safety remains paramount • Trade-off with capacity • Progress to date • Coordination of airspace design & useunder EUROCONTROL • Focus has been on capacity so far • Very slow improvement in flight efficiency • Magnitude • Economic impact of Route extension ~€ 2 200M p.a. • Direct link with environmental impact (Emissions) • Vertical and terminal airspace inefficiencies to be added • Issues to be resolved • Flight-efficiency is a major ATM issue • Airspace design is the main underlying issue • Continental dimension of airspace design issues • Civil-military aspects PRC uses same framework as ANSEP Key Performance Indicator

10. ANSP benchmarking • ANSP benchmarking • First PRC report in 2003 • Requires • Information disclosure • Validation • Stability in time • Institutionalised benchmarking ≠ Voluntary benchmarking • ANSEP performance framework draws on PRC experience PRC uses same framework as ANSEP

11. Cost-effectiveness PRC proposed target: -3% p.a. in real unit cost terms Mechanism to deliver performance • User pressure, PRC benchmarking • Co-ordinated planning under EUROCONTROL • States’, ANSP initiatives Progress to date • Progressive improvement in unit cost since 2003 • > 2 billion euro saved from 2003 to 2008 if trend remains • Break in trend coincides with first benchmarking report • Unit cost approximately twice higher than in US • Main causes • Low average productivity • Fragmentation of service provision • Weak governance of monopoly ANSPs in many States Magnitude • High cost of user charges (7.2 billion euro in 2005) In spite of progressive improvements, Cost-effectiveness is a major ATM issue (billions of euro) Key Performance Indicator

12. Conclusions • High stakes in ANS performance (billions of € or $ per annum) • Experience with performance-oriented approach in Europe since 1998 • Prerequisites for efficient performance-oriented strategies • Reliable information flow • Target setting, performance monitoring • Adequate regulation • Performance management processes • Independent performance review (with permanent support) • Strong governance of monopoly service providers • Accountability for performance