This article is part of our special report Greening aviation.
It is not possible to modernise European air traffic management infrastructure unless competing companies work together and airlines are involved in the development of new technologies to ensure that they satisfy operational needs, the executive director of an EU programme aimed at overhauling Europe's airspace told EURACTIV in an interview.
Patrick Ky is executive director of the SESAR Joint Undertaking, an EU programme aimed at modernising Europe's air traffic management infrastructure.
What exactly is SESAR doing and who is involved in it?
SESAR is a programme aiming at modernising the air traffic management infrastructure in Europe. It is organised into three phases.
First, the definition phase, consisting of a paper study, which defined what should be done, how and when. That was finished last year. It is now being followed by the development phase, from 2008 to 2016. This phase is about developing the technologies, standards and operational procedures that will meet the requirement defined in the definition phase. This phase is conducted under the management of the Sesar Joint Undertaking (JU). The last phase is the deployment of technologies, as from 2016 to 2020 or 2025.
The division of work is of course a bit theoretical, because if we have a new technology which can be implemented earlier, we will do that.
SESAR JU is an organisation created by the Council of the EU. One of its pillars is the principle of public private partnerships (PPP).
In 2007, we organised a call for expression of interest to become part of Sesar JU. Twenty-five companies and organisations applied and fifteen of them were chosen as candidate members. And we have now been discussing with those and Eurocontrol since 2008, to build this partnership in terms of a technical and financial partnership.
What kind of members does Sesar JU have?
We mainly have three kinds of industry stakeholders: thirteen air traffic management (ATM) service providers; the manufacturing industry, which produces the ground systems, including companies like Thales and SELEX, and; the airborne industry, which develops all the components in aircraft, including companies like Airbus, Alenia Aeronautica, Thales Avionics and Honeywell, which is rather interesting, because it is a US company.
We have two public partners – the European Community, with a €700 million budget coming from the EU, and Eurocontrol, which also provides €700 million.
How are tasks divided between public and private partners?
The role of the Community is to sponsor the project and bring in cash. But it also has a role to play in terms of strategic decision- and policymaking. Eurocontrol has a role in both funding and the technical work programme, because it has a lot of expertise in different areas. Here Eurocontrol will work in integrated teams with the industry.
How much will SESAR cost? Where does the cost come from, and who will pay for it?
The overall cost of SESAR is estimated at €30 billion, including the deployment, which by far will the most expensive phase.
The major cost in the deployment phase comes from the implementation of the new technologies. Most of the costs come from the installation of new equipment on board the aircraft (from €15 to €20 billion). The rest comes from equipment of ground, airport and military systems.
There are two types of components that we have to produce for the military users. First, we need to have SESAR compliance equipment put on board of the military aircraft if they want to fly in civil airspace. Second, the military are also ATM service providers, because they have their own airspace in which they are air traffic controllers, and those systems of course need to be fully interoperable with the civil systems.
The military aspects are likely to be one of the key challenges to SESAR, since we have seen in the definition phase that between 60% and 70% of the military air craft fleet has to fly in civil airspace, which means that between 60% and 70% of their aircraft would need to be equipped with SESAR equipment.
The military investment needs to be prepared and organised in order to make sure that when we implement SESAR in civil airspace, we do not all of a sudden prevent military aircraft from flying in the civil airspace.
So all this needs to be carefully planned to ensure a smooth transition from the current systems to the new generation of systems.
What's the business case for SESAR? Is there one?
It's to reduce businesses' risk for investment in new technologies by first getting public money to co-fund the risk and development. Second, being part of a European project means that the choices being made in terms of technologies and standards are going to be European choices. This reduces a lot the technological risk and uncertainty for a company. Thirdly, the three industry stakeholder groups together form a unique platform for the validation of different products.
Therefore, typically, the ground industry not only reduces its risk because its products are developed in coordination with the users (the ATM service providers) but the products will also be compatible with what is developed on board the aircraft. So, in terms of global interoperability. it reduces the technical risk at lot.
Will SESAR have transatlantic interoperability?
That's one of the things we are working on. The United States has launched a similar type of programme, called NextGen. We are currently discussing with our US colleagues to make sure our choices are compatible.
The two programmes are very similar in terms of what we want to achieve by 2020-2025, but the paths forward are very different. In the EU, the main challenge for us is the coordination of all member states, and all the different parties in Europe.
For this reason, we have a very step-by-step approach, meaning we first need to do and complete one thing before moving to another. In the US, they only have one state and they chose to invest in one particular type of activity, such as the replacement of their ground navigation infrastructure, and do it once and for all. In the EU, we will do it by increments.
Both solutions have their pros and cons, but we believe that in the EU, there is no other way to do this than to coordinate the different member states.
What are the preconditions of SESAR's success and are those conditions currently being met?
The first challenge is to be able to work together. I highlight this because it is not that obvious, because typically when you take the industry, you have partnership companies that are competitors. So, how can we ensure that even if they are competitors, they can work together in order to achieve certain objectives of the programme?
The second challenge is to deliver, in the programme, products and technologies which deliver real benefits. And this is something that is not that obvious, because if you develop technologies completely independently from the real operational needs, at the end of the programme you end up with a product that will not fulfil the needs of the users and will therefore be very difficult to implement, because it is too costly or because the needs of the users have evolved and things like that.
So, we need to ensure that we develop the right solutions for the users and the solutions that deliver real benefits.
How do you ensure this is being done?
We need to ensure that the users are fully part of the programme in the validation of the tools – typically to say 'yes' or 'no' to different technologies and tools – and in the validation of the so-called business case: 'I agree with this tool and agree to deploy it, because I believe it will enhance my performance, etc.'
The users for us are the airlines, but also the staff. And we need to make sure that both can be fully part of the activities, to reassure them about the fact that we will deliver things that suit their needs.
We are currently organising their involvement and expect to place contracts with them before the summer.
The last precondition is the stability of public funding and of political priorities. This is essential, as we need to have a secure stream of public funds to plan quite a complex programme, with sufficient reliability.
The notion of political priorities is also important. For example, with the recent hike in oil prices, all the eyes of political decision-makers were on how we can develop solutions that are fuel efficient. Now, the policy priorities are not at all the same, and have changed to, for example, observing the monetary cost.
When you are managing such a complex and long-term perspective project as SESAR, you cannot adapt the programme every three months to new priorities. So we need some stability in the way forward.
The big challenge in SESAR is not that much about new technologies: it is more about how we can decide together on what needs to be done and do it.
How will the funding for SESAR be secured in the current economic context, with businesses expected to put most of their money in the development phase?
I hope the economic crisis will be over by 2016 and that there won't be any other. How to secure the right access to the right funds is essential if we want to succeed. We are starting to work on this subject with financial institutions and airspace users (airlines) in order to look at more innovative ways of funding the deployment of new technologies, especially on board aircraft. And we will start this work this summer.
Can you give any examples of such innovative funding models?
The airline business is quite a stable business in terms of travel needs and passengers and so on. The investment scheme in which the airlines bear all the risk of installing new equipment on board their aircraft does not hold, I think, in this particular situation of economic crisis, but also in the future.
So, what we need to look at is that how we share this risk between airlines, and typically Airbus and Boeing. Or how do we put in place a scheme for ground equipment in which we get a loan from the European Investment Bank (EIB), for instance to pre-fund the installation of the equipment, and the payback to the EIB comes only when the operational benefits start.
I can't guarantee that we will find easy-to-implement solutions, but at least we have some different possibilities that we need to look at.
Where will the operational benefits that can help pay back the loans come from?
There are savings coming from shorter routes. We think that we can reduce fuel consumption by 10% per flight, and there are also gains in terms of economies of scale – meaning that if we have one SESAR technology and three or four SESAR-compliant systems, instead of having twenty different systems, there are obviously economies of scale. And the third point is the productivity and efficiency of air traffic controllers. We believe that we can help air traffic controllers to be more efficient and productive by providing automation support for their tasks.
Money-wise, then, you think there is enough of a case for business to invest? So we're not heading for another Galileo-type delay in the implementation of the project?
Yes, we think so. And Galileo is a very different project, because it is about building a new infrastructure to compete with the GPS.
In our case, it is about modernising an existing infrastructure and the business case comes from the fact that if we don't modernise the current systems, we must ask ourselves, what will the situation be like in five or ten years' time?
In our field, we are operating technologies that date from the 1950s – so in 2020, what will be the cost of maintaining those technologies? There is no other way: we need to modernise the system.
We know that there is no other solution than to modernise the ATM. In Europe, we have decided to do it with a European programme, instead of having individual member states modernising their own systems.
The big question in SESAR was to decide whether this should be done in a single European programme, or should nationally-based investment programmes continue? And the choice was Europe.