Practical Work and Experience With Performance Management ICAO Performance Management Symposium

1. Practical Work and Experience With Performance Management ICAO Performance Management Symposium John Crichton, President and CEO NAV CANADA March 28, 2007

2. Agenda • Unique, customer driven private company • Why NAV CANADA measures performance • Some examples of internal performance measures • What we have learned about performance measurement • Some NAV CANADA comments regarding international performance measures

3. NAV CANADA’S Unique Structure • NAV CANADA assumed control of the Canadian ANS on November 1, 1996. • The Company’s creation was driven by its customers’ need for improved and cost effective ATM services. • The Company is a completely private, non-share equity enterprise, funding both the $1.5 billion purchase and ongoing capital needs through publicly traded debt. • The board of 15 represents all major stakeholders including 5 customer representatives.

4. 2006 Marked the 10th Anniversary of NAV CANADA • November 1, 2006 was our 10th anniversary • Company has been aggressive in controlling costs while ensuring the system remains safe and efficient • The impact of our efforts can be seen in these comparisons to our former life

5. Managing Head Count Year End Head Count

6. Transport Canada NAV CANADA Capital Spending FY 1991 to FY 2006

7. A Strong Safety/ Customer Value Focus • As a natural and statutory (ATC) monopoly, ensuring transparency is essential to be accountable to customers. • The Company is fundamentally based on three pillars of value creation for our customers: • Safety • Cost effectiveness • Service Quality • These pillars drive the overarching objectives established by our Board of Directors.

8. Overarching Objectives • Maintaining a safety record in the top decile of the major ANSPs worldwide. • Maintaining customer service charges in the bottom quartile (lowest charges) of the major ANSPs worldwide. • Implementing and maintaining a modern cost-efficient ANS technology platform in the top quartile of Major ANSPs worldwide. • Ensuring that growth in costs of providing air navigation services do not exceed the growth in charging units, thereby resulting in a decline in customer service charges over the long term. • Creating a productive and fulfilling work environment which places NAV CANADA amongst the best employers in Canada.

9. Overarching Objectives Drive Measurement • Our overarching objectives are the ultimate performance measures. • All our internal measures relate to the overarching objectives. • These objectives focus our performance measurement efforts thereby keeping the number of high level measures manageable. • Having a reasonable number of measures also recognizes the significant resource requirements that can arise.

10. Why Does NAV CANADA Measure Performance? • A score card on how we measure up to our objectives. • To demonstrate value to customers, or lack thereof. • An early warning system to identify deficiencies especially with respect to safety. • A way to rank our Company against ourselves and with other ANSPs around the world. • A tool to identify areas of improvement or best practices

11. Internal Performance Measures • Performance measurement occurs throughout the Company. • Individual managers’ goals are linked back to the Corporate objectives. • High level performance measures focus on customer concerns. • The following examples are high level measures in Safety, Cost Effectiveness and Service Quality, the three pillars.

12. SAFETYIFR to IFR Losses of Separation

13. COST EFFECTIVENESS Customer Costs Per Flight Hour

14. COST EFFECTIVENESSFlight Hours Per Employee

15. Traffic Is Growing

16. SERVICE QUALITYYYZ Arrival Delays

17. SERVICE QUALITYEquipment Outages

18. What NAV CANADA Has Learned • Good consistent data based on clear definitions is essential. • Data must be relevant to customers. • Measures must be related to objectives. • Collecting, analyzing and reporting on performance measures requires resources. • Measure what’s relevant not what’s nice to have. • Must avoid demand driven comparisons

19. International Performance Measures • NAV CANADA’s overarching objectives require good international information from other ANSPs in a timely fashion. • Secretariat paper is helpful but too many different performance indicators to be useful. • Operational Concept has 11 key performance areas and more than 32 KPIs. This is too many. • International measurement must recognise that different ANSPs serve different customers. Measures must be relevant to those ANSPs. • Avoid prescriptive metrics. • NAV CANADA supports the industry effort lead by CANSO for global benchmarking.

20. Conclusion • NAV CANADA is committed to safety, cost effectiveness and quality service to customers. • Using appropriate performance measures ensures that NAV CANADA stays focused on customers’ concerns. • Timely and validated international performance measures would be very useful for ANSPs and their customers. • The development of ICAO’s performance measures must take into account local and regional differences, leaving ANSPs and their customers to determine the measures that work best for them.