NATIONAL PERFORMANCE PLAN SWITZERLAND for SES RP

Transcription

1 Federal Department of the Environment, Transport, Energy and Communications DETEC Federal Office of Civil Aviation FOCA Directorate Federal Department of Defence Civil Protection and Sport DDPS Swiss Air Force Command National Supervisory Authority of Switzerland for Air Navigation Services NATIONAL PERFORMANCE PLAN SWITZERLAND for SES RP REF: Commission Regulation (EU) No 691/2010, FABEC_AFG_FABEC-Performance- Plan-RP1 Version V Nussbaumer Dieter

2 Document identification Title National Performance Plan for Switzerland Status V June 2011 Responsible Support Dieter Nussbaumer, FOCA /NSA Carlo Bernasconi, ALR-aerospace NSA Support Contact: dieter.nussbaumer@bazl.admin.ch bernasconi.carlo@alr-aerospace.ch 2/48

3 Document change record Document designation Date Responsible Reason for change Draft V 0.1 Initial document by skyguide 15 April 2011 C. Cavilier Initial proposal for the cost-efficiency chapter Draft V 0.9 CE for stakeholder consultation 26 April 2011 D. Nussbaumer Adjustments for national stakeholder consultation on cost-efficiency V May 2011 D. Nussbaumer Inclusion of the stakeholder's comments after the national consultation on cost-efficiency, inclusion of the chap 4 civilmilitary V June D. Nussbaumer Inclusion of skyguides adjustments to chap 2 and 3 following the stakeholders consultation V June D. Nussbaumer Inclusion of Swiss ATCAs comments on behalf of the unions, following consultation meeting 06 June /48

4 V June D. Nussbaumer Inclusion of the Targets and the comments of the Department of defence V June D. Nussbaumer Insertion of the scanned signatures sheet 4/48

5 Signatures 5/48

6 Table of content Document identification 2 Document change record 3 1. Introduction Description of the situation 7 Scope of the plan Description of the macroeconomic scenario for the reference period including overall assumptions Description of the outcome of the stakeholder consultation to prepare the performance plan (main issues raised by the participants and if possible agreed compromises) Performance targets at national level Performance targets in each key performance area, set by reference to each key performance indicator, for the entire reference period, with annual values to be used for monitoring and incentive purposes: 12 (a) Safety 12 (b) Capacity 12 (c) Environment 15 (d) Cost-efficiency Description and explanation of the consistency of the performance targets with the European Union-wide performance targets Description of the parameters used by the Member States in the setting of risk-sharing and incentives. EN Official Journal of the European Union L 201/ Contribution of each accountable entity Individual performance targets for each accountable entity Military dimension of the plan Performance of the FUA application Additional KPIs Implementation of the Performance plan 32 Annex: total costs and unit rates 6/48

7 1. Introduction 1.1. Description of the situation Scope of the plan The Performance Plan (PP) covers ANS services provided by Skyguide Ltd and MET services provided by MeteoSuisse for the period 2012 to All areas of performance defined by the Commission Regulation (EU) No 691/2010 are to be addressed in the PP. Institutional framework The Federal Office for Civil Aviation FOCA is responsible for ensuring that aviation practices and procedures in Switzerland comply with best international standards, in close cooperation with the Swiss Air Force Command. The National Supervisory Authority NSA is responsible for defining and monitoring performance objectives, having due regard to military mission effectiveness. The National Performance Plan for Switzerland is part of the FABEC Performance Plan. The Safety, Capacity and Environment KPIs are common to all FABEC States, the Cost- Efficiency and Military Mission Effectiveness KPIs are defined at national level Description of the macroeconomic scenario for the reference period including overall assumptions A traffic increase by 2.4% p.a. (Statfor Medium Term Traffic Forecast baseline published in February 2011) is expected during the considered period of time. En route Implemented unit rate should be kept constant in national currency at CHF , excluding the adjustments foreseen in the Regulation. Inflation for instance could be above the planned level of 1%. Exchange rate CHF/ used for the PP is 1.3. En route unit rate expressed in is Description of the outcome of the stakeholder consultation to prepare the performance plan (main issues raised by the participants and if possible agreed compromises). The consultation took place 18 May 2011 in Geneva. The invitation has been sent 24 March 2011, the documents (NPP Switzerland) has been sent to the stakeholders 26 April The comments and actions are listed below. 7/48

8 SAS / Mr Justesen Swiss/ Mr Nantier KLM and IATA IATA IATA Item Performance regulations Process: dependencies between the targets, role of State Process: Consistency of bottom-up capacity target setting Application of the inflation rate Consumer Price Index Use Cost reduction target Organisation/Name IATA / Mr Raffo Comment/question/statement Comment: "Test phase" does not mean target shall not be met for RP1 Statement: all targets shall be met, no trade-off at State level, trade off has been performed at PRB/EC level Question: how to ensure that the final result will be consistent after that "bottom-up" splitting of targets? Comment: to be clarified with PRB, also for the future Question: why HCPI and not CPI? Comment: 2.5 % not ambitious enough: -given the fact that dismantling of cross-subsidies is included. -comparing with peers SAS Cost elements Question: what has been undertaken to reduce the staff costs? Swiss / Mr Nantier KLM /IATA Cost elements Cost reduction targets Question: what is the impact of the delegated airspace on the g-tg. cost-effectiveness target. Comment: running two centers ca no longer be an excuse for not meeting the targets IATA Cost elements Question: shall "exempted costs" be considered in the cost calculation? Action and rationale NSA: noted: "test" means we are all in a learning process, but the targets are real. NSA: noted NSA: noted, this will be the role of Network Manager and FABEC. Action: point to be clarified by Skyguide and NSA with the PRB Skyguide: point clarified -Dismantling of subsidies corresponds to an improvement of en route cost efficiency and must be accounted as such -complexity in Switzerland and Denmark is not similar at all, same for operational set up with Austria and Denmark. The consistence of this peer is questionable. Challenge07 program, cost cutting programs implement during the downturn and kept where feasible Skyguide: not significant NSA: this debate shall be held at political level, not relevant for RP1 Action: question currently being clarified 8/48

9 KLM Capacity / delay Question: who is responsible for delivering the performance: ANSP or State? How can MIL be considered as "non-manageable" element since the State is responsible? IATA Capacity targets Question. What happens if targets are not met? IATA Cost components Question: what is meant by "transfer costs"? IATA NSA costs How are they taken on board? Zurich airport/ Mr.Russo IATA MET Cost components Suggestion: cost and quality targets to be put on MET service in the NPP Information missing on cost components (e.g. CAPEX, asset base, staff development), therefore comments cannot be provided on these elements Swiss ATCA Capacity What is the basis of calculation used for the breakdown of the EU delay targets for Switzerland (0.22/0.18/0.14 min per flight)? NSA: the State has to consider both aspects. Question to be dealt with at the FABEC consultation 20 May. NSA: no financial incentives or penalties foreseen for RP1, corrective action plans will be defined at FABEC level. Question to be raised at the FABEC consultation. Skyguide: the cost for the systems used for the seamless transition from one site to the other Explanation given by NSA NSA: will be considered for RP2 Action: Skyguide to clarify these points in discussion with IATA. IATA to deliver additional comments until 31 May. Action closed with V1.2 Skyguide: ATFM simulation capacity baseline assessment: estimation of current ACC capacity. ATFM simulation of the future capacity requirement taking into account the STATFOR traffic forecast and the delay target : increase of traffic on a projected future network and taking into account airport capacity constraints. Economic model (performance prediction) : based on the optimum operating point defined as the lowest total cost of operation. 9/48

10 Swiss ATCA Swiss ATCA Swiss ATCA Swiss ATCA Cost components Cost components Assessment of NPP Civil-Military dimension What is the basis of calculation used for the development of staff costs? Are all "investments" mentioned in the list reflected in current or future projects? Do you expect the European Commission to accept the Swiss non-consistencies based on the explanations provided in the NPP? What measures are planned should this not be the case? Could you explain the reason for Switzerland's opposition to the first KPI of the military dimension? Computation of the optimum delay per ACC : increase of capacity at the ACC offering the best return on investment until the overall delay target (0.5 min per flight in 2014) is reached. Skyguide: Staff amount according to 5year financial plan ATCO numbers increase steadily. Non ATCO numbers remain more or less stable over the RP1. Cost evolution according to available information in the ATCO CLAs and in the 5yfp for AOT and management. Inflation planned with 1% over the RP1. Skyguide: Yes, V 1.2 of the NPP presents a short description of the projects content and the planned commissioning date NSA: We hope the EC will support Swiss NPP, but adjustments might be required Skyguide: Concrete measures are not yet identified. We will update financial plan and identify potential improvements. Important cost reductions in the past that cannot be played anymore. Our challenges (FABEC, NPP, SESAR) require additional resources, contradictory with straight line savings. NSA: The dimension and position of SUAs is based on a political decision of the State, balancing two States interest: economic growth and Air Defense, and cannot be 10/48

11 Swiss ATCA FABEC Swiss ATCA regrets the fact that too many targets are still defined ant national level and not at FABEC level. Swiss ATCA Safety Swiss ATCA deplores the fact that no clear and measurable safety targets are defined measured as a KPI. The proposed target ( not degraded) means in reality no changes to the current airspace structure in a very constrained environment. This would imply that the current airspace organization should be frozen, which is not acceptable NSA: noted NSA: noted 11/48

12 2. Performance targets at national level 2.1. Performance targets in each key performance area, set by reference to each key performance indicator, for the entire reference period, with annual values to be used for monitoring and incentive purposes: (a) Safety KPI 1: effectiveness of safety management: (optional in the first reference period) To be defined in the FABEC performance plan KPI 2: application of the severity classification of the Risk Analysis Tool (RAT) : (yes/no values), To be defined in the FABEC performance plan KPI 3: just culture: (optional in the first reference period) The "Just Culture" KPI is currently under development by the E3 group, chaired by the EC. To be defined by the FABEC performance TF. (b) Capacity KPI 4: minutes of en route ATFM delay per flight The reference values of the breakdown of the EU capacity/delay targets were computed by Eurocontrol (CEF method) in the preparation of the national performance plan to ensure national targets consistent with the EU-wide capacity target. These EU-wide capacity targets are spread over the first reference period as follows : 2012 : 0.7 minutes average en-route ATFM delay per flight for the full year and for all causes, as recommended by the PRB 2013 : 0.6 minutes average en-route ATFM delay per flight for the full year and for all causes, as recommended by the PRB 2014 : 0.5 minutes average en-route ATFM delay per flight for the full year and for all causes, as adopted by the European Commission The Switzerland en-route delay performance ( ) and the EU delay breakdown for the period 2012 to 2014 are presented in the figure below. 12/48

13 Taking into account the historical data series, the 5 Year Capacity Plan and the traffic evolution, FOCA sets the following values targets for the period : Capacity KPI Intermediate Value Intermediate Value Target Minutes of en-route ATFM delay per flight under skyguide managerial control Minutes of en-route ATFM delay per flight not under skyguide managerial control Total minutes of en-route ATFM delay per flight These targets will be achievable provided the traffic increase remains below 2.5% on a yearly average basis, adverse weather conditions will not worsen in the future, and the capacity initiatives will be implemented on time and within the foreseen scope. The following table lists the en-route ATFM regulation causes of the CFMU classification considered by skyguide to be under managerial control or not : 13/48

14 Under managerial control Accident / Incident ATC Capacity Airspace Management Industrial action (ATC) ATC Routing ATC Staffing Equipment (ATC) Not under managerial control National defense needs Special Event Industrial action (non-atc) Weather Equipment (non-atc) The following graph highlights the evolution of en-route ATFM delay per flight in Switzerland over the last 8 years and proposed targets for the first reference period En route ATFM delay per flight - skyguide (delegated airspace included) en-route ATFM delay per flight (in min.) IFR Traffic CH en-route ATFM delay per flight under skyguide's control en-route ATFM delay per flight out of skyguide's control en-route ATFM delay per flight (plan) en-route ATFM delay per flight (not under control) IFR Flights STATFOR MTF - High GSTATFOR th MTF - Baseline STATFOR MTF - Low G th First of all, it can be observed that the total en-route ATFM delay per flight in Switzerland didn't follow the European trend notably in 2010 when the European en-route delay per flight reached its ceiling level and the Switzerland en-route ATFM delay per flight continued to decrease. The current skyguide 5 Year Capacity plan contains numerous capacity initiatives that should produce benefits within the next years : the intensive recruitment process (first very positive signs at ZRH ACC); the extension of the Geneva upper airspace stripless system to the whole en-route 14/48

15 Swiss airspace foreseen for 2012 and 2013; 1 a new CAPAN study (will be published in the course of 2011); a new Traffic and Complexity prediction tool based on ETFMS data (already in operations, positive impacts expected in 2011 and 2012), Datalink and others (Enhanced Mode S, ). All these projects will contribute to improve skyguide's capacity and hence to diminish delays. In addition, close working relationship between FOCA, Swiss Air Force and Skyguide as well as continuous CDM on the two major airports Zurich and Geneva with the same organisations and the main airlines will further contribute to improve capacity in Swiss airspace and on airports through different other projects or for special events. Notwithstanding this continuous effort and this important planned investment, skyguide should not be able to reach the 2014 breakdown reference value computed by Eurocontrol (0.14 min per flight, all year, all reasons). Only once over the last 8 years was the enroute ATFM delay per flight due to regulations not under skyguide's control kept below 0.1 min per flight (in 2004, 0.04 min per flight). It is also important to understand that the impact of adverse weather regulations on delay, for instance, grows as traffic increases. Therefore, with the foreseen traffic increase, it is highly likely that the greater part of the 0.14 min per flight (EC breakdown reference value) will be due to regulations not under skyguide's control. The SES Network Manager Function will have a role to play in containing the delays not under managerial control of ANSPs. To summarize, the NSA targets are considered feasible even though very challenging and will clearly depend on traffic evolution it is assumed that traffic won't increase more than the baseline medium-term traffic forecast published in September 2010 by STATFOR and on the on-time implementation of all the aforementioned capacity initiatives. It is important to mention that any capacity initiative implemented in the past showed that it takes time before the real capacity gain can be observed. If the recruitment process to compensate an ATCO shortage can take between 5 to 10 years, one could also observe that after the operational deployment of an important change such as the stripless system, capacity gains only became effective after a period of approximately 2 years. The financial plan presented in this document supports this capacity plan and will therefore represent a key enabler of the planned operational performance enhancement. The investments required for SESAR IP1 are also taken into consideration, which will induce a capacity gain in the medium term (2-3 years) (see 2.1 for details). As a consequence, the interdependency between financial and capacity targets (as well as all the other targets) is very strong. This means that all projects bound to change the financial scope of this National Performance Plan (e.g., FABEC or safety initiatives, ) will have a direct impact on the financial capacity envelope, and could delay expected capacity benefits; this should then lead to a review of this National Performance Plan. (c) Environment KPI 5: Average horizontal en route flight efficiency The environment KPA, according to the Performance Scheme IR 691/2010 and the guidance material provided by the PRU will be kept at network and FABEC level respectively 1 All information needed by the ATCO is displayed on the screen, no paper strips, no electronic strips. 15/48

16 during the first reference period European network goal is to reduce by 0.75% direct route extensions, based on the last filed flight plan (d) Cost-efficiency KPI 6: En route Determined Unit rate Cost-efficiency KPI Real en-route determined unit rate (in national currency at 2009 prices) Target Target Target Table 5: Presentation of the en-route cost-efficiency target for RP A 2010 A 2011 F 2012 F 2013 F 2014 F En-route total service units prior to RP Forecast total service units used for the determined unit rate Source: skyguide skyguide skyguide skyguide % n/n-1 3.4% 2.4% 2.4% 2.4% STATFOR service units forecast (Baseline scenario) Date of STATFOR SU forecast: Feb Feb Feb Feb % n/n-1 3.2% 2.5% 2.3% 2.5% Table 8: En-route service units forecast used for the calculation of the national/fab en-route cost-efficiency target ANS en-route cost per entity Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Skyguide MCHF % n/n-1 3.5% -1.2% -3.3% 2.9% 3.4% Delegated airspaces MCHF % n/n-1-4.7% 66.7% 1.8% 3.1% 3.4% MeteoSwiss MCHF % n/n-1-1.9% -2.4% 0.0% -1.5% 0.0% FOCA MCHF % n/n % 0.6% 2.0% Total determined costs in nominal terms MCHF % n/n-1 5.7% -13.4% -4.5% 2.3% 3.0% Table 9: National determined en-route costs breakdown per entity (in nominal terms in national currency) ANS en-route cost per nature Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF % n/n-1 6.9% 2.7% 0.6% 3.4% 3.8% Other operating costs MCHF % n/n-1-5.9% 39.4% -0.7% -1.1% 2.2% Depreciation MCHF % n/n-1-0.3% -14.0% -15.4% 3.8% 2.1% Cost of capital MCHF % n/n-1-5.6% -12.2% -6.4% -1.8% -2.0% Exceptional items - Delegated airspaces MCHF % n/n-1-4.7% 66.7% 1.8% 3.1% 3.4% Total determined costs in nominal terms MCHF % n/n-1 5.7% -13.4% -4.5% 2.3% 3.0% Table 10: National determined en-route costs Breakdown by nature (in nominal terms in national currency) 16/48

17 Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Total determined costs in nominal terms MCHF Inflation % 0.4% 0.7% 0.7% 0.7% 0.7% Inflation index (100 in 2009) Total determined costs in real 2009 terms MCHF % n/n-1 5.2% -14.0% -5.2% 1.6% 2.3% Table 11: National determined en-route costs total in real 2009 terms Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Average per annum Determined costs in real terms (in national currency at 2009 prices) MCHF % -0.5% Total en-route SUs % 2.4% Real en-route determined unit rate in national currency (at 2009 prices) CHF % -2.7% % n/n-1 4% -17% -7% -1% 0% 2009 Exchange rate (1 EUR=) Real en-route determined unit rates (in 2009 EUR at 2009 exchange rate) 2009 EUR % -2.7% % n/n-1 4.3% -16.9% -7.4% -0.8% -0.1% EU-wide target: average determined en-route unit rate (in 2009 EUR) 2009 EUR % -3.50% Table 12: National real en-route determined unit rate (in national currency at 2009 prices and in EUR2009) Traffic Traffic forecasts are in line with the forecasts made by STATFOR in February The update made in May by Eurocontrol does not drastically change the situation. Where the 2011 baseline is lower, the growth rate the following year is higher, leading to almost the same number of service units in absolute value. Inflation Basically, the retained assumption for inflation rate is 1.0%, in line with the forecast from the Swiss Federal Statistical Office and with IMF forecasts. Besides, skyguide deflates only staff costs as the main other operating costs are not directly influenced by inflation. This system is fair both for the users and for the supplier. In fact, if inflation is higher than forecasted, skyguide will not bill extra costs that the company did not bear in its P&L, unless suppliers explicitly justify cost increase by inflation. In such cases only, adjustments to inflation would be applicable. On the other hand, if the inflation is lower than expected, the company won t need to reimburse money that has actually never been saved. This practice leads to the calculation of a weighted inflation rate for skyguide. MeteoSwiss assumed an inflation rate of 0% and FOCA an inflation rate of 1% on their entire respective cost base. These differences in handling inflation lead to the calculation of a weighted inflation rate for Switzerland. The adjustment linked to inflation will be made according to the same methodology used to compute the inflation as applied in the plan. Costs Concerning the evolution of skyguide costs, please refer to the comments made under the section "Contribution of each accountable entity". FOCA / State costs including Eurocontrol costs are reintroduced in the cost base as from 2011 as a result of the legislative changes to be enforced this year. As a matter of fact, the Confederation will bear on a temporary basis some loss of revenues linked to cross-border services (outside the Swiss FIR). Together with the revenues that compensate for the French delegated airspace, this compensation is shown on the line "delegated airspaces". 17/48

18 Concerning the evolution of the costs by nature, the main remark is that the increase in the Swiss other operating costs in 2011 is linked to the reintroduction of the regulation cost in the cost base. For the other topics, as skyguide is the main cost driver within the Swiss en route cost base, we invite the reader to consult the comments for skyguide in the section "Contribution of each accountable entity". Determined Unit Rate En route determined cost increases on average by 0.3% a year in nominal terms over the first reference period whereas traffic is expected to grow by an average of 2.4% per year. As a result, real determined unit cost do decrease by 2.7% per year or -8.3% cumulated from 2012 to The EU target expressed in percent consists in a 10% real unit rate reduction. The presented evolution of the cost efficiency indicator supports the proposed plan in the other KPAs, in particular in the capacity and the safety domains. If some changes should occur in these two latter domains, the cost efficiency indicator should be adapted accordingly. Terminal costs ANS terminal cost per entity / Cat I airports Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Skyguide MCHF % n/n-1 MeteoSwiss MCHF % n/n-1 FOCA MCHF % n/n-1 Total terminal costs in nominal terms MCHF % n/n-1 2.6% -4.4% -1.1% 2.0% 1.7% Table 13: National costs for terminal ANS Breakdown per entity/charging zone (in nominal terms in national currency) The terminal activities will be split in two categories: the first category will be composed of Geneva and Zurich airports, submitted to the European regulation and the second category will gather all the other regional airfield, not submitted to the European regulation. Terminal determined cost does follow a comparable but less stressed trend than Enroute. For Geneva and Zurich Airport a reduced financial burden dedicated to cross finance losses on regional airfields has been kept. Costs of regulation are reintroduced partly as from 2011 and fully as from 2012 as the counterpart of the legislative changes which allow to dismantle the cross subsidies. Although the structural deficits in financing ANS services has drastically improved in 2011, more efficient ways of financing the ANS services on small airports have to be identified as soon as possible but no later than the end of the first reference period. FOCA and Skyguide are in the process of finding a solution in the form of a revision of the Swiss Air Law and of some attached ordinances. Uncontrollable costs They are basically of three different categories: 1. Changes in Swiss/International legal & regulatory framework Mainly Aviation law and related ordinances, pension scheme, Swiss and International GAAP, ICAO rules, Eurocontrol principles, International agreements 2. Changes in macro-economic metrics Mainly Interest rates on loans, Swiss CPI With regards to the treatment of yearly inflation, skyguide salary system includes an 18/48

19 automatic adjustment to Swiss CPI up to 3%. Skyguide planned with +1% of yearly inflation over Remaining cost items are planned in real terms. The difference between the Swiss CPI (reference for salary system) and the Swiss HCPI (reference for Eurostat) is considered as an uncontrollable cost. Description and justification of the return on equity of the air navigation service providers in relation with the actual risk incurred Swiss Confederation 10 years bond (risk free rate) is currently rather low reflecting the sluggish demand situation and rather low investors confidence in future economic growth. It is estimated by using the 10 years Swiss Confederation bonds rate. Source: Swiss National Bank (SNB) Current interest rates and exchange rates Skyguide applies since 2008 a lower WACC than the calculated one, 2.5% instead of 4% to 4.5%. This practice aims at reducing the financial burden for the customers under the strict condition to cover the effective debt cost. ROE calculated for the period is 5.15% and cost of debt 3%. Note that in order not to value too high cash flows, skyguide uses a 4.5% rate as a discounting factor, whereas calculated weighted average cost of capital equals around 4% to 4.5%. Such a practice might have a strong rational during an economic crisis but should apply in the frame of an incentive scheme only when financial risk is covered through sufficient reserves, which might be the case for skyguide during the first reference period. 19/48

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21 Description of investments necessary to achieve the performance targets with a description of their relevance in relation with the European ATM Master Plan and their coherence with the main areas and directions of progress and change as set out therein. New SIDS and STARS : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#7 Queue Management Tools Consist of implementing new Airport Standard Departure Routes and Standard Arrival Routes taking into account new navigation capabilities (P-RNAV : Precision Area Navigation). This will enable better trajectory improving environment issues (noise, CO2, NOX...). (expected by ) Point Merge : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#7 Queue Management Tools Consist of implementing a new concept for Arrival based on optimising aircraft trajectories towards a single Navigation Point. This is an enabler for the concept of Continuous Descent. (Part of SESAR Implementation Package 1, expected by ) Enhanced Mode S : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#7 Queue Management Tools Consist of downloading Aircraft Parameters (Selected Flight Level, Airspeed, Rate of Climb/Descent). This will be used to feed the ATM system to improve trajectory prediction, monitoring and safety. (included in CCC project, expected by ) ETFMS Flight Data (Crystal) : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#3 - Collaborative Planning using the Network Operations Planner; LoC#4 - Managing the ATM Network Consist of enabling better accuracy in short term traffic prediction. This will allow to better optimise sectorization and therefore rostering. Initial version already in operation in Geneva and Zurich. (Part of SESAR Implementation Package 1) LINK2K+ - CPDLC : EATM Master Plan : LoC#5 Managing Business Trajectory in real time Consist of implementing Controller/Pilot Communication via Datalink instead of by radio voice communication. This will permit to reduce radio voice communication, therefore increasing sector capacity and safety. ((Part of SESAR Implementation Package 1, included in CCC, expected by 2013 (Geneva), 2014 (Zurich), SES IR) Stripless Environment : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#5 Managing Business Trajectory in real time; LoC#6 Collaborative ground and airborne decision tools Consist of replacing the paper strip operation by full stripless operation. This is already in service in upper Geneva ACC and is planned to be implemented in lower Geneva ACC and 21/48

22 Zurich ACC. By having stripless operation, advanced trajectory prediction and support tools for detecting conflict or for monitoring have been implemented to ensure efficient and safe operation. Stripless operations also aim at increasing capacity. (included in CCC, expected by ) Controller support Tool Improvement : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#5 Managing Business Trajectory in real time; LoC#6 Collaborative ground and airborne decision tools Introduction of stripless operation brings controller support tools. Some of them are in use since 2005 in Geneva, however with the addition of new technology such as CPDLC, enhanced Mode S, controller support tools will be improved in the future. ((Part of SESAR Implementation Package 1, included in CCC, expected by ) Inter-Centre Electronic Coordination : EATM Master Plan : LoC#2 Moving from airspace to trajectory based operations; LoC#5 Managing Business Trajectory in real time Introduction of stripless operation is an enabler to facilitate the ATCO to ATCO coordination actually mainly performed via telephone. The Inter-Centre electronic Coordination is a first step of future interoperability between ATC centres, which will become mandatory in the near future. However it requires close development collaboration with neighbor ATC centres. ((Part of SESAR Implementation Package 1, included in CCC, expected by ). 22/48

23 2.2. Description and explanation of the consistency of the performance targets with the European Union-wide performance targets. Safety Capacity KPI 1 Effectiveness of safety management KPI 2 Application of the severity classification KPI 3 Reporting of just culture KPI 4 En route ATFM delay per flight KPAs KPIs Target EU Target Switzerland Consistency Switzerland with EU targets No target No target Consistent 0.22/2012, 0.18/2013, 0.14/ /2012, 0.28/2013, 0.24/2014 Not consistent Environment Cost effectiveness KPI 5 Average horizontal en route flight efficiency KPI 6 En route determined unit Rate improvement by 0,75% point of the average horizontal en route flight efficiency indicator in 2014 as compared to the situation in /2014 or -10% compared to 2011 not applicable and kept at network and FABEC level respectively during the first reference period 2014 max - 10% compared to 2011 Not applicable Not consistent Military mission effectiveness (FABEC KPIs) KPI1 Actual SUA vs ideal SUA KPI2 Percentage of SUA allocated KPI3 Training time vs airborne time * The current situation of MME shall not be degraded No targets monitored* Consistent 2.3. Description and explanation of the carry-overs from the years before the reference period. In total, carry-overs until do reach -122MCHF (-120MCHF for En route). They mainly result from the deficit of payments on airspace delegations and from the traffic shortfall in En route unit rate has been frozen from 2007 to 2010 and increased by 4.9% in 2011, in order to compensate a part of the traffic downturn. A stabilization plan has been launched in 2011 and will take at least 9 years in order to solve the cumulated carry-over issue. 23/48

24 It has to be mentioned that the current planning foresees this amount to be recovered during the first two reference periods. Nevertheless, there is no room for manoeuvre with regard to this topic. According to traffic and costs evolution, there is a risk that the cumulated under recoveries may not be fully recovered in the given timeframe. Carry-over from To 2009 To 2010 To 2011 To 2012 To 2013 To 2014 To 2015 To RP Total Table 14: En route carry-overs from the years before RP1 - under (-) and over (+) recoveries (in nominal terms in national currency) The table above presents the planning to recover the under recoveries generated before RP1. It is indicative and may be changed during the course of RP1 according to actual situation versus planned situation. Besides, this planning cannot be compared directly with the figures presented in annex A, reporting table 2. The reporting table 2 is used to calculate an implemented unit rate which skyguide plans to stay stable over at least RP1. To accommodate with this given framework, a calculation is made to include the carry over and the carry forward of a given year in the annex A, reporting table 2 in order to come to the targeted implemented unit rate. 24/48

25 2.4. Description of the parameters used by the Member States in the setting of risk-sharing and incentives. EN Official Journal of the European Union L 201/15 During the first reference period, the incentive mechanism, traffic and cost, applies for En route only. Traffic risk sharing -10% -2% Plan +2% +10% Alert meca. Adjustment Deadband Adjustment Alert meca. New targets 70% recov. by ANSP 100% for the ANSP 30% recov. by ANSP New targets The cost related to NSA, MET, Eurocontrol, international agreements, carry-overs, bonus and penalties are exempted from the Traffic risk sharing. Above all, the maximum rate of recovery by the ANSP can be justified by a reasonably low ROE. Cost Article 2.2. of Commission Decision of 21 February 2011 setting the European Union-wide performance targets and alert thresholds for the provision of air navigation services for the years 2012 to 2014 applies. 25/48

26 3. Contribution of each accountable entity 3.1. Individual performance targets for each accountable entity. Skyguide is accountable for the capacity, safety and environment targets mentioned in the consolidated part of the performance plan. Skyguide Currency 2007 A 2008 A 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF Other operating costs MCHF Depreciation MCHF Cost of capital MCHF Exceptional items Total en-route costs MCHF % n/n-1-1.4% -3.5% 3.5% -1.2% -3.3% 2.9% 3.4% Table 18-1: Entity Skyguide - Determined en-route ANS costs by nature (in nominal terms in national currency) Skyguide Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Air Traffic Management MCHF Communication MCHF Navigation MCHF Surveillance MCHF Search and rescue Aeronautical Information MCHF Meteorological services Supervision costs Other State costs Total costs MCHF Table 19-1: Entity Skyguide - Determined en-route ANS costs by service (in nominal terms in national currency) Skyguide Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Net book value fixed assets MCHF Adjustments to total assets Net current assets Total asset base MCHF Cost of capital pre tax rate % 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% Return on equity % 5.0% 5.0% 5.0% 5.2% 5.2% 5.2% Average interest on debts % 2.6% 2.6% 2.8% 3.0% 3.0% 3.0% Table 20-1: Entity Skyguide - Complementary information on the cost of capital en-route (in nominal terms in national currency) General comments Skyguide did undertake major efforts since 2007 in order to manage cost in an efficient way. First by implementing a cost cutting program named Challenge07 which durably enabled to spare 23MCHF/year at company level. Then by launching a so called Action Plan with the goal to offset the losses linked to the economic downturn in 2009 (in total 30MCHF savings in 2009 and 2010 also at company level). The effects of these actions are reflected in the table 18. The company is of the opinion that further straight line budget cuttings would seriously hamper safety and capacity and are no longer considered as an option. Assuming the en route average delay per flight will drop by 40% between 2010 and 2012 and by 60% between 2010 and 2014, such an improvement will heavily reduce the cost related to delays bared by airspace users! This effect is unfortunately not captured by skyguide cost efficiency performance indicator; it is however a factual cost reduction for the users and additional cost for the provider. Skyguide is convinced that future cost-efficiency improvements could be achieved by implementing its modularisation strategy faster. The creation of smaller units (business units) supposed to act creatively and flexibly with a strong business approach, both internally (within the company) and externally (outside the company), should help to further improve cost management and the raise of additional revenues over the time. 26/48

27 Ups and downs can be observed, especially in They result from changes in cost allocation started in 2011 and that should last during the whole first and second reference periods. These changes in cost allocation aim at: Dismantling cross subsidies upper/lower partly in 2011 and fully in This has a positive impact on the cost evolution for En route. It must be made clear that this achievement results from a strong involvement of both the Swiss Confederation and skyguide in order to cancel structural deficiencies and thus to improve economic efficiency. Besides, the cost shifted to Regional airfields (outside from the Performance Reg. scope) won t be charged to airspace users but paid through Mineral Oil taxes that were before allocated to the highway network. As a conclusion it is a real benefit for all the users. Smoothly implementing the so called 20 km rule (negative effect for En route and positive for Terminal). Staff costs Staff cost was contained during the years 2007, 2008 and 2009 in the frame of the savings program. For instance, provision for holidays/overtime was significantly reduced and agreements with staff have been successfully concluded. Such actions are one-off actions! Wages and related cost (social and pension) are automatically adjusted to Swiss CPI on a contractual basis between management and trade unions up to 3%. Skyguide planned with +1% of yearly inflation over the considered period of time. Other cost is planned regardless of any inflation. Regarding staff numbers evolution, administrative staff was reduced in 2010 vs 2009 and remains stable over the RP1 period of time. ATCO numbers do steadily increase to provide with the expected capacity gains, thus generating additional costs Total civil ATCO En route and National airports skyguide FTE Total airports GVA/ZRH Total ACCs Other operating costs The other operating costs were reduced every year between 2007 and 2010 as a result of the optimization programs mentioned above. Among others, contracts with the main suppliers were renegotiated and external support was reduced. They are then kept stable along the first reference period but can no longer be reduced as the main savings potential has been used prior to RP1. 27/48

28 Depreciation The reduction in depreciation cost after 2011 is linked to the end of life of system/equipments within the Transfer project (move to Dübendorf). System/infrastructure have been duplicated, fully depreciated in Kloten and depreciated at a faster speed in Dübendorf according to operational and technology requirements. Note that additional depreciation cost have been by far offset by savings in rental cost. The overall move to Dübendorf presented a positive ROI. Capital expenditures are capped at around 50MCHF per year (En route + App Cat I). Major en route initiatives for RP1 are: Stripless environment, cost 22MCHF, planned commissioning date 2013 LINK2K+/CPDLC, cost 11MCHF, planned commissioning date 2014 Enhanced Mode S, cost 3MCHF, planned commissioning date Fixed asset base used to calculate Capital: 280MCHF (2011). As investment is lower than depreciation during RP1, the asset base will decrease. Cost of capital It should be noted that skyguide do not apply WACC to net working capital as it would be supposed to do in order to charge less airspace users! Besides, this WACC was reduced to a very low level barely covering the cost of debt in the frame of the savings measures implemented prior to RP1. This measure is maintained as long as the cost of debt is covered but it can no longer be activated to reduce the skyguide determined costs and thus to get closer to the European wide target. Conclusion In a nutshell, the costs of skyguide have been maintained stable in nominal terms over the period with significant decreases prior to the reference period 1, this despite significant improvements in terms of capacity and safety and despite major programs like the implementation of SES and FABEC are. 28/48

29 Skyguide terminal Skyguide - Cat I Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF Other operating costs MCHF Depreciation MCHF Cost of capital MCHF Exceptional items MCHF Total terminal costs MCHF Table 21-1: Entity skyguide - Terminal ANS Cat I costs in national currency The increase in cost between 2010 and 2009 is mainly explained by an increase in the cross subsidy of the regional aerodromes. As from 2011, this cross subsidy is reduced. The evolution 2012 vs 2011 is mainly explained by the smooth introduction of the so called 20km rule which effects are planned to stay stable during the first reference period. MeteoSwiss en route MeteoSwiss Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF Other operating costs MCHF Depreciation MCHF Cost of capital MCHF Exceptional items Total en-route costs MCHF % n/n-1-1.9% -2.4% 0.0% -1.5% 0.0% Table 18-2: Entity MeteoSwiss - Determined en-route ANS costs by nature (in nominal terms in national currency) MeteoSwiss Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Air Traffic Management Communication Navigation Surveillance Search and rescue Aeronautical Information Meteorological services MCHF Supervision costs Other State costs Total costs MCHF Table 19-2: Entity MeteoSwiss - Determined en-route ANS costs by service (in nominal terms in national currency) MeteoSwiss terminal MeteoSwiss - Cat I Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF Other operating costs MCHF Depreciation MCHF Cost of capital MCHF Exceptional items MCHF Total terminal costs MCHF Table 21-2: Entity MeteoSwiss - Terminal ANS Cat I costs in national currency 29/48

30 FOCA en route FOCA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF Other operating costs MCHF Depreciation MCHF Cost of capital MCHF Exceptional items MCHF Total en-route costs MCHF % n/n % 0.6% 2.0% Table 18-3: Entity FOCA - Determined en-route ANS costs by nature (in nominal terms in national currency) FOCA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Air Traffic Management Communication Navigation Surveillance Search and rescue Aeronautical Information Meteorological services Supervision costs MCHF Other State costs MCHF Total costs MCHF Table 19-3: Entity FOCA - Determined en-route ANS costs by service (in nominal terms in national currency) FOCA terminal FOCA - Cat I Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff MCHF Other operating costs MCHF Depreciation MCHF Cost of capital MCHF Exceptional items MCHF Total terminal costs MCHF Table 21-3: Entity FOCA - Terminal ANS Cat I costs in national currency 30/48

31 4. Military dimension of the plan 4.1. Performance of the FUA application Since 1996, Switzerland has implemented the FUA concept according to the Eurocontrol Handbook. Since 2004, the requested airspace for all military missions (from all squadrons) is centralised in the Air Operation Center (AOC), where a de-confliction already takes place. There is no double booking or reserve booking of TSAs. Then, a weekly Air Tasking Order (ATO) is published to all Swiss aviation actors (ACC and military units) and is transmitted to the CFMU. The Swiss Air Force airspace requests are almost 100% planned a week in advance and correspond to the effective final usage. Switzerland has implemented CDR 1, 2 and 3 and operates them to a great extent, at the satisfaction of the civil and military aviation. FUA Level 1 - The Federal Office for Civil Aviation (FOCA) is in charge for airspace at Level 1 and defines the airspace structure in Switzerland. The law states, that this airspace definition has to be done in accordance with the Air Force and after consultation of the national ANSP Skyguide. For that purpose an Airspace Regulation Team (ART) including these three parties is established. The National Airspace Management Advisory Committee (NAMAC) is the advisory body to the Airspace Regulation Team and consists of representatives from all areas of airspace users. The legal process established includes a formal consultation with all general aviation bodies concerned. The overhead body of the Airspace Regulation Team is the ANS Regulation Group (ARG) acting as Airspace High Level Body according to Switzerland s airspace policy. FUA Level 2 - The national AMC (Skyguide) is an integrated and combined CIV + MIL Airspace Management Cell. FUA Level 3 - The military Air Navigation Services are fully integrated with the civil services in one ANSP (Skyguide). Mil ATCO have the full civ-mil radar picture and also a civil license allowing them optimum airspace coordination and release Additional KPIs Currently, the MIL community of FABEC proposed 3 KPIs with targets to be defined at national level, and 4 PIs, per definition without targets, defined in the FABEC performance plan KPI 1 Optimum SUA dimension vs published SUA structure KPI 2 Percentage of SUA capacity allocated KPI 3 Total training time vs total airborne time Since the situation for these three proposed KPIs is considered satisfactory, no degradation is likely to occur during RP1. Therefore the 3 KPIs will be monitored with the target, that the MME shall not be degraded. 31/48