oct 2011 presentation bc rtwr
TRANSCRIPT
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Dr Anders Adrem
Partner and Country Manager for Sweden, Quartz+Co Managing Partner, Kihlstedt & Partners Booz Allen Hamilton, European Aviation Leadership Team and Nordic Leadership Team PhD in Finance & Accounting, School of Economics and Management, Lund University Sweden
+ international network
Nordic Aviation Relations
Experiences and education
Dr Anders Adrem
www.quartzco.com
DENMARK Ryesgade 3A 2200 Copenhagen T: +45 33 17 00 00
NORWAY Inkognitogata 35 0256 Oslo T: +47 22 59 36 00
SWEDEN Birger Jarlsgatan 7 111 45 Stockholm T: +46 (0)8 614 19 00
Business Case Remote Towers DR. ANDERS ADREM, QUARTZ+CO
October, 5th 2011
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Target /vision • Regulatory and technologically integrated European airspace • Key success factors: increased capacity, improved safety,
reduced environmental impact and better cost efficiency
Single European Sky key development driver of European air traffic
Background • Serious delays in European air traffic • Increasing congestion of European airspace • Significantly higher ATM unit costs than the US
Legislative package SES I • Establishment of a common European regulator • Definition of airspace as a cross-border resource • Focus on introduction of new technology supporting vision
Legislative package SES II • Introduction of a "Performance scheme" • Acceleration of Functional Air Blocks (FABs) • Strengthening of central network management systems
European Commission adopts proposal for SES, with endorsement from Norway and Switzerland
SESAR established and definition phase initiated
Delivery of SESAR ATM-master plan SES II enters into force end of 2009
Both performance scheme and establishment of FABs operational
End of first reference period (2012-2014) Start of second reference period
1999
2001
2004
2006
2008 2009
2012
2014 2015
2015-25
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SESAR has set ambitious targets; the industry is entering into a take-off phase towards full implementation
DEFINITION Resulted in the European ATM Master Plan
DEVELOPMENT Results in new Standards, new operational procedures, new technologies and pre-industrial components
DEPLOYMENT Implements the results of the development phase, delivers the performance increase
2006-08 EUR 60 million
2009-14 EUR 2.1 billion
2015-25 EUR 25-30 billion
3 phases
VISION / TARGET
Ongoing Full implementation
Enabling EU skies to handle 3 times
more traffic
Improving safety by a factor of 10
Reducing environmental impact
per flight by 10%
Cutting ATM costs by 50%
1. 2.
3. 4.
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SES and SESAR JU will redefine the industry logic – new constellations will emerge
From national monopolies and national ANS providers
To international co-operation and consolidation
National monopolies and
national ANS providers
En-route
Towers
CNS
Other services, new services
• Economical regulation of en-route service • International co-operation (FABs) • Realising full potential will require close
co-operation and international consolidation
Regional co-operation and consolidation
Competition, new players
and new coalitions
Co-operation with other ANSPs and
the industry
• Deregulation and competition for tower services • New players (private) and new coalitions • Remote towers potential game changer
• Technological progress and digitalisation is redefining the service portfolio
• Unbundling of current services, new providers (e.g. Telecom providers)
• Redefinition of service portfolio – future core competences/services – insourcing/outsourcing
• International co-operation, including industry
Unbundling Rebundling What is/will happen?
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Trend towards deregulation in Europe – yet only a few countries has deregulated the TWR business but the path forward is clear
Fully deregulated
Semi-deregulated
Deregulation process ongoing
The UK • TWR market deregulated • NATS main operator of
international airports • Local and regional airports
mainly operated by airports themselves
Switzerland • Deregulation process ongoing • Draft bill propose main airports
continue to be served by Skyguide
Spain • Local and regional airports
deregulated 2010 • Concession for first batch of 13
airports awarded non-state ANSPs in 2011 (mainly NATS)
• No time given for deregulation of international airports
Sweden • Fully deregulated 2010 • ACR took over operation of
three local/regional airports 2011
• Tower services at the largest airports currently up for tender
• All Swedish airports will have been up for tender 2013
Denmark • TWR market never been
regulated • Naviair only operator of ATC
services in Denmark
Germany
• Local and regional airports deregulated 2007
• Local and regional airports mainly operated by DFS Tower Company and Austro Control
• International airports, monopoly operated by DFS
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AFIS ATC
Local and Regional Towers – the unit cost challenge
Expected development of unit costs
ILLUSTRATIVE
Increased unit costs
+10 years 20XX
Expected development of unit costs
20XX
Increased unit costs
+10 years
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+10 years 20XX
Why Remote Towers?
INDEX
"As is"
"As is"
Remote TWR
Remote Towers offer a substantially lower cost level vis-à-vis operations "as is"
Moreover, Remote Towers offer a number of qualitative benefits
• More varied and stimulating tasks, distributed work • Better environment for competence development;
knowledge sharing and working colleagues • Less dependency on few employees and easier to
replace personnel • No/less “on call” duty and less weekend hours
• Increased competitiveness through cost efficiency • Possibility to create unique advantages and take
advantage of the deregulation of TWR services • Lower investment costs (ref. traditional TWR) • Better cost control • Contribute to maintaining the small airfields
Personnel
• Lower operation costs, lower prices / tariffs • Increased operation stability • Increased flexibility • Improved safety
Customers
ANSP
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Contemporary models for investment decisions are perceived intangible and unreliable
Quartz+Co uses a scenario based business case approach to evaluate the benefits of Remote Towers
Why use a business case approach?
Cost-Benefit analysis and Net Present Value analysis are commonly used for making investment decisions …
… however, these methods are perceived intangible and unreliable due to a number of reasons • Often based on unrealistic assumptions • Results intangible and hard to relate
to operations • Hard to visualise actual impact on P&L
and Balance Sheet
… which entail a number of benefits • Results are based on real operational data • Clarify effects on P&L, Balance Sheet and
Cash Flow Statement vis-à-vis "as is" • Show the full impact of the investment
Business case approach is based on an analysis of Income Statement, Balance Sheet and Cash Flow Statement …
Income Stat.
Balance Sheet
Cash flow
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Operating conditions – traffic situation/development
"As is" Estimated development "as is" - Operating costs - Investments - Cash flows
1
2
Key results – comparison "as is" vs Remote TWR 4
Sensitivity and risk analysis 5
Transition costs and high-level roadmap 6
Business case methodology
Remote TWR 3
Technology Airport specific Remote Central Working station and positions Scenarios
Operations Manning (operating personnel) Other functions Operating concept
a b
Estimated development – Remote TWR c
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Remote TWR operating concept – key principles for business case
Central
Work groups
Work stations (sectors)
Work positions
Operational personnel
The need for operational personnel and the dimensioning of technical components are conditional to the operational prerequisites/conditions
• Information from the air field is transferred to a central
• The central may contain one or several work groups
• Each work group is dedicated to a number of specific airfields
• A work group may have access to one or several work stations from which the tower duty is performed
• A work station may have one or several positions
• The number of manned positions vary through the day and night
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Remote TWR operating concept – Technology set-up
Technology scenarios Different technology scenarios is used and assessed
Main scenarios
I. Visual/cameras, AWOS & ATIS (AFIS) II. Visual/Cameras, AWOS & ATIS, MLAT and ADS-B (AFIS, ATC)
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3
Opening hours
A B C D
D
C
B
A
Sum
Example from ATC Group A; Annual aircraft movements and opening hours
Group A
Aircraft movements 2009
Weekdays: X
Saturday: X
Sunday: X
Weekdays: X
Saturday: X
Sunday: X
Weekdays: X
Saturday: X
Sunday: X
Weekdays: X
Saturday: X
Sunday: X
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121110987654321 28272625242322212019181716151413
87654321 2827262524232221 3130299 11 1410 1512 13 16 17 18 19 20
DCBAJanuary
February
Monthly aircraft movements (2009) Aircraft movements per day
Example from ATC Group A; Monthly aircraft movements
Deep dive
Example of output of analysis (1/2) ILLUSTRATIVE
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Example of output of analysis (2/2)
7
2021
10
19
1516
23
17
22
18
11121314
6
10
7
5
89
4
23
23
10
22
11
21
12
20
13
19
14
18
15
1716
8765
9
0
4321
SUM SUM
Onsdag 28. januar 200910:00
12:00
11:00
11:30
11:45
11:15
10:30
10:45
10:15
10:0410:06
10:16
10:2510:2810:31
10:45
10:54
11:0111:0411:05
10:12
11:07
11:1911:22
11:50
10:22
10:46
11:34
10:0010:04
10:2410:2510:2610:3010:31
10:4210:44
10:50
11:1511:17
11:2811:3011:31
11:41
11:4711:50
Detailed flight pattern for 2 hours with high concurrencyAircraft movements spread through the dayNumber of aircraft movements per hour
Example from ATC Group A; Aircraft movements spread through the day
Wednesday 28. January 2009
23222120191817161514131211109876543210
23222120191817161514131211109876543210
SUM SUM
Aircraft movements spread through the day
2223
2120191817161514131211109876543210
Potential schedule
05:00
13:00
07:00
22:00
07:00
15:00
07:00
15:00
07:00
15:0015:00
23:00
15:00
23:00
15:00
22:00
1:4
2:4
4:4
3:4
1:4
64 h
Example from ATC Group A; Potential schedule
ILLUSTRATIVE
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Further analyses confirm the case study estimates on cost efficiency potential
Potential
Density
30% to 60% Potential
Rationale • Low air traffic density together with limited opening hours at smallest airports result in unproductive ATCO time
• When the number of air movements increase, so does the need for multiple ATCOs at the individual tower and the potential for reduction by multiple airport approach increases
• High density airports with higher complexity reduces the potential of multiple airport approach
The efficiency potential varies depending on airport density ILLUSTRATIVE
Air movements 1,000-5,000 5,000-12,000 12,000-20,000 20,000-50,000
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Business case study – set-up
Set-up of study • Information gathering and systematisation
• Analysis
• First results and main implications
• Potentially complementary analysis
• Final outcome, results and key conclusions
• Key questions/issues to address in the continuing work
• High-level roadmap going forward
Timeline* • Small team approximately 8-12 weeks
• Broader involvement at about 12-16 weeks
Dr. Anders Adrem Partner, Country manager Sweden Quartz+Co M: +46 708 969 522 E: [email protected] W: www.quartzco.com
* Depends on number of airports included, information available etc.)