Future ATM - from Asian operator's point of view

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1 Future ATM - from Asian operator's point of view Martin Eran-Tasker Technical Director Association of Asia Pacific Airlines EIWAC2013 Tokyo, Japan February 2013

2 Overview Global mobility Asia Pacific Aviation Current business conditions Future growth Global ATM Asia Pacific ATM Closing thoughts

3 Aviation: moving the world Air travel delivers global mobility 2,850 million passengers Carries 35% by value of global trade Wider social and economic benefits Outstanding safety record Source: ATAG

4 Asia Pacific Diverse geographic region Home to more than 4 billion people 62% of the world s population Generates 27% of global GDP Wide range of income levels Dynamic economies delivering global growth Aviation widely recognised as a key contributor to economic and social development Political diversity remains challenging: need for multilateral cooperation

5 Asia Pacific Aviation

Asia Pacific Aviation US$159 billion revenue 655 million passengers 457 million domestic 198 million international 18 million tonnes of cargo 4,984 aircraft Asia Pacific

6 Asia Pacific Aviation US$159 billion revenue 655 million passengers 457 million domestic 198 million international 18 million tonnes of cargo 4,984 aircraft Asia Pacific carriers overall market share: 25% of global passenger traffic 40% of global cargo traffic Data: 2012 Estimates Source: Combined AAPA + non-aapa airlines GMT+7 to GMT+12

7 Current Business Conditions

Global economy moderates GDP Growth % change 10 8 6 4 2 0 World GDP Growth 2010 2011 2012E 2013F +5.3% +3.9% +3.5% +4.

8 Global economy moderates GDP Growth % change World GDP Growth E 2013F +5.3% +3.9% +3.5% +4.1% Emerging & Developing economies World -2 Advanced economies F Source: IMF

9 Economic trends Reflecting the tough business environment Source: IATA

Oil price volatility 200 180 160 Jet fuel price 140 120 100 80 60 Crude oil price (Brent) 40 20 0 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09

10 Oil price volatility Jet fuel price Crude oil price (Brent) Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 US$ per barrel Persistently high oil prices reflect political risk factors

11 Global passenger and cargo traffic Global international passenger and cargo traffic Passenger traffic growth maintained, but air cargo demand remains weak Source: IATA

12 Future Growth

13 Aspirational Demand for Air Travel Rising incomes, urbanisation, social development

14 The growing middle class Source: Airbus

15 Asia Pacific traffic will grow significantly Source: Airbus GMF

16 Asia Pacific fleet expansion Asia Pacific 2011 airplanes new airplanes North America Europe Latin America Middle East CIS Africa - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Source: Boeing

17 Global ATM

18 Keeping pace with growth ATM complex Requires collaboration and commitment Highly capable under utilised aircraft NextGen - progressing Single European Sky (SES) More than a decade since proposal adopted All initiatives to achieve a harmonised and efficient European airspace have so far failed Technology benefits will remain limited until the political constraints resolved Seamless Asian Skies harmonisation and interoperability vital, challenge maintaining implementation plan Technology not the issue. need political will for reform

19 Cost of No Action Increase in delays and congestion Degradation of aviation safety Lack of capacity for growth Increase in operational costs due to inefficiencies and increased fuel burn Impact the global and national economic activity Inefficient and constrained airspace

20 Potential savings Expected savings per year if ATM systems and aircraft onboard technology were optimised Regional Savings 22% Global Traffic 1.3 million minutes 2 million tonnes of fuel 6 million tonnes CO2 Source: ATAG/Airbus

21 Asia Pacific ATM

22 Challenges Asia Pacific largest market - diverse regional ASNPs Immediate ATM challenges are associated with growth and capacity Can the region handle the projected increase in air traffic? No overarching framework to operate within to drive change Funding Challenge to introduce new technology and procedures and ensure interoperability and harmonisation To address the challenge ICAO established the ASPAC Seamless ATM Planning Group Timely introduction of the ICAO system block upgrades and regional sub office in Beijing

23 Political Will and Policy Solutions Growth dependant on safe and efficient air transport system, not possible if system capacity cannot keep pace with traffic demand Provide a framework that enable ANSP accountability and autonomy to plan and invest Recognition that ATM safety and operational efficiency go beyond national airspace/ borders Need for cross border collaboration Enables gate-to-gate operations and optimisation Sharing of industry best practice Benchmarking Improve civil-military coordination Open closed military airspace Will increase capacity and enable direct routing and operational efficiencies

24 Cost of No Action Degradation of aviation safety Increase in delays and congestion Lack of capacity to support growth Increase in operational costs due to inefficiencies and increased fuel burn Inefficient and constrained airspace Impact global and national economic activity

25 Airline Near Term Wish List Address disconnects in ATM/Seamless airspace initiatives between North Asia and rest of Asia Pacific (particularly vis a vis South China Sea, China Japan) Accelerate adoption of PBN especially for enroute implementation of RNP 4 (and RNP 2) and approach NPA (RNP APCH with Baro Vnav), APV, GLS Accelerate ADS-B OUT implementation and Surveillance based separations tying in to current developments in the South China Sea/Australia Regional thinking and solutions required with Seamless/Interoperable procedures that looks at the complete routing or gate to gate

26 Closing Thoughts Aviation is part of everyday modern life and drives global economic and social development Air Transport faces a complex and challenging business environment Overall prospects for long term growth remain bright Do nothing is not an ATM option Harmonised approach difficult but political will and mandate required ATM requires regional thinking and regional solutions that are GLOBALLY harmonized and interoperable Huge potential savings in Fuel and CO2 reductions Shared confidence and optimism about the future

27 Association of Asia Pacific Airlines Unit 27-1, Level 27, Menara Prestige 1 Jalan Pinang Kuala Lumpur MALAYSIA Tel: Fax:

Asia Pacific Aviation

Asia Pacific Aviation Responding to Challenges Andrew Herdman Director General Association of Asia Pacific Airlines Overview Asia Pacific aviation Safety trends Current business conditions Future growth