REPUBLIC OF BULGARIA MINISTRY OF TRANSPORT INFORMATION TECHNOLOGY AND COMMUNICATIONS DIRECTORATE GENERAL CIVIL AVIATION ADMINISTRATION

Transcription

1 REPUBLIC OF BULGARIA MINISTRY OF TRANSPORT INFORMATION TECHNOLOGY AND COMMUNICATIONS DIRECTORATE GENERAL CIVIL AVIATION ADMINISTRATION NATIONAL PERFORMANCE PLAN Edition 1.0 Sofia 2011

2 DOCUMENT SIGN OFF SHEET Edition 1.0 Released edition page 2 of 95

3 TABLE OF CONTENTS TABLE OF CONTENTS... 3 LIST OF TABLES Introduction Current situation Overall assumptions for Reference Period Stakeholder consultation National performance targets and alert thresholds Performance targets and alert thresholds for RP Consistency with EU-wide targets (and thresholds) Carry-overs from the years before RP Parameters for risk sharing and incentives Contribution of each accountable entity A. Bulgarian Air Traffic Services Authority - BULATSA BULATSA (Bulgarian ANSP) share in the national targets and individual binding performance targets Incentive mechanisms to be applied to BULATSA to encourage targets to be met over the reference period B. Directorate General Civil Aviation Administration (DG CAA) share in the national targets Cost-efficiency Civil-military dimension of the plan General Performance of the FUA application FUA compliance The FUA concept has been implemented in Bulgaria. In order to achieve a full compliance with the FUA regulation, the following improvements are ongoing: Additional KPIs Analysis of sensitivity and comparison with the previous performance plan Sensitivity to external assumptions BULATSA at present has enough capacity to meet the en-route traffic demand without delays during RP1. Variations in traffic are expected in comparison with the forecast; however, most probably alerting thresholds will not be activated In case of traffic downturn, cost savings should to be made to meet the EU-wide targets during RP Variation of exchange rates Major changes in functional ATM systems Comparison with previous performance plan Implementation of the performance plan Monitoring of the performance targets Corrective measures Enforcement tools Annexes Edition 1.0 Released edition page 3 of 95

4 LIST OF TABLES Table 1 General economic situation in Bulgaria... 7 Table 2 Inflation rates in Bulgaria... 9 Table 3 Presentation of the national targets and thresholds for RP Table 4 EU Target Sofia ACC Breakdown Table 5 EU Target BULATSA Breakdown Table 6 EU Target DANUBE FAB Breakdown Table 7 Presentation of the Bulgarian en-route capacity target for RP Table 8 Presentation of the Bulgarian en-route cost-efficiency target for RP Table 9 EU-wide targets and associated thresholds for RP Table 10 En-route capacity target - details at national level Table 11 Chargeable service units and number of aircrafts over Bulgaria Table 12 En-route service units forecast used for the calculation of the national en-route cost-efficiency target in Table 13 EUROCONTROL Short - and Medium-Term Forecast of Service Units ( 000) February 2011 Update Table 14 National determined en-route costs - breakdown per entity (in nominal terms in national currency in BGN million) Table 15 National determined en-route costs - Breakdown by nature (in nominal terms in national currency in BGN million) Table 16 National determined en-route costs - total in real 2009 terms in BGN million Table 17 National real en-route determined unit rate (in national currency at 2009 prices and in EUR Table 18 National costs for terminal ANS - Breakdown per entity/charging zone (in nominal terms in national currency) Table 19 Carry-overs from the years before RP1 - under (-) and over (+) recoveries (in nominal terms in national currency Table 20 Carry-overs from the years before RP1 - under (-) and over (+) recoveries (in nominal terms in national currency adjusted for Total costs/total service units method Table 21 Incentive schemes for RP Table 22 Presentation of the incentive schemes at National level for RP Table 23 The traffic risk sharing scheme Table 24 Uncontrollable costs foreseen by DG CAA Table 25 Incidents (class А, В ) per serviced aircraft ( actual) Table 26 BULATSA contribution to the National capacity target (at ANSP and ACC level) 30 Table 27 BULATSA Determined en-route ANS costs by nature (in nominal terms in national currency, BGN million) Table 28 Determined en-route ANS costs by service (in nominal terms in national currency, BGN million) Table 29 BULATSA Complementary information on the cost of capital en-route (in nominal terms in national currency, BGN million) Table 30 Terminal ANS costs in national currency Table 31 BULATSA en-route and terminal annual investments (capex) in nominal terms in national currency include VAT by the end of The amounts stated for RP1 are without VAT for en-route and terminal ANS Edition 1.0 Released edition page 4 of 95

5 Table 32 BULATSA - Description of the main investments impacting RP1 (in nominal terms in national currency) Table 33 Approach to describing individual entity's incentive schemes Table 34 NSA Determined en-route ANS costs by nature (in nominal terms in national currency, BGN million) Edition 1.0 Released edition page 5 of 95

6 1. Introduction The present National Performance Plan (NPP) is submitted by the Republic of Bulgaria in its commitment to achieve the objectives of the Single European Sky (SES) and a balance between the needs of all airspace users and the services provided by the national air navigation service provider the BULgarian Air Traffic Services Authority (BULATSA). The NPP has been developed and proposed by the national supervisory authority the Directorate General Civil Aviation Administration within the Ministry of Transport, Information Technology and Communications of Bulgaria. The DG Civil Aviation Administration (Ministry of Transport, Information Technology and Communications (MTITC) of Bulgaria) is empowered with regard to this performance plan Current situation This National Performance Plan (NPP) covers the first reference period (RP1) as defined in Art.7 of Commission Regulation (EC) No.691/2010 (Performance Scheme Regulation) starting on and ending on This plan has been developed on a national level for the Republic of Bulgaria. In accordance with Art.5.3 of the Performance Scheme Regulation, the aggregated performance targets, highlighting the consistency at DANUBE FAB level with EU-wide performance targets have been coordinated with Romania during the consultation process (ref. to Annex D). The National Supervisory Authority (NSA) responsible for drawing up this performance plan is the Directorate General Civil Aviation Administration within the Ministry of Transport, Information Technology and Communications of Bulgaria. The Directorate General Civil Aviation Administration is also responsible for providing the aggregation of the performance metrics on behalf of Bulgaria for the DANUBE FAB. The following accountable entities are covered by this performance plan: The DG CAA The Bulgarian Air Traffic Services Authority (BULATSA) as designated by the State for air navigation services provision and being holder of valid certificates issued by DG CAA for: Air Traffic Services; Communication, Navigation and Surveillance services; Aeronautical Information Services; Aeronautical Meteorological Services; Edition 1.0 Released edition page 6 of 95

7 The geographical scope of this NPP falls within Sofia FIR Overall assumptions for Reference Period 1 This plan applies to the performance of en-route ANS only. Terminal ANS will be subject to performance scheme application from 2015 onwards The key factors and overall assumptions for RP1 are identified as follows: FAB development; Traffic development; SESAR development; Necessity for continuous cost-effectiveness improvements; Restructuring of ANS provision to match supply and demand of ANS Stemming from the overall assumptions, the following key goals should be achieved during RP1: Avoid adverse impact on the en-route unit rate, i.e. continue the stable downward trend followed in the last 10 years; Minimize and smoothen the impact on the TNC unit rates and cost base, i.e. to keep stable the TNC unit rate by the end of RP General economic situation and expected development of the GDP Economic Growth In 2010 the GDP dynamics was determined by the strong exports growth, which compensated the continuing, although at lower rates, shrinking of domestic demand. After the first quarter of the year the economic activity in the country started improving and throughout 2010 GDP increased by 0.2% as compared to the decline of 5.5% in 2009 see Table 1. Year Metrics A A F D D D Real GDP growth 2-5.5% 0.2% 3.0% 3.5% 4.0% 4.0% Nominal GDP Real GDP growth 4-5.5% 0.15% 3.60% 4.10% 4.40% 4.20% Real GDP Table 1 General economic situation in Bulgaria On the demand side the largest negative contribution to GDP growth in 2010 belonged to investments, which shrank by 14%, but at a decelerating rate since the beginning of The investment activity registered an improvement and the gross fixed capital formation 1 Source: 2 Source: 3 USD million, Source: 4 Source: 5 EUR million. Source: Edition 1.0 Released edition page 7 of 95

8 registered an annual growth of 4% during the last quarter. The individual consumption declined by 0.6% in 2010, but the consumer confidence indicator registered a growth both on an annual and on a quarterly basis. The public consumption declined by 1% as a result of the fiscal consolidation. The contribution of external trade was positive. The real exports growth accelerated to 16.2%. As a result of the domestic demand decrease, the recovery of the imports was more moderate, by 4.5%. In terms of economic sectors, a stable recovery is observed in industry which had a pronounced positive contribution to the GVA growth. The recovery of the industry was initially supported by the external demand, but afterwards was also supported by the stronger sales on the domestic market. In 2010 the condition of the industry started improving and registered an average annual growth of 1.9%. The data on the turnover in industry, which started increasing on an annual basis in March 2010, also point to the revival of industry. The main contribution belongs to the annual sales on the external market, which increased by 34%. The surveyed managers in the industry sector see positive prospects for the sector and expect the exports growth to continue over the next months. In 2010 the services sector shrank by 0.9%. The main negative contribution belonged to trade, tourism, general government and education. Transport and communication, and financial intermediation, however, reported a positive growth during the last year. The development of the services sector is strongly dependent on the employment rate and the incomes, which remained suppressed in 2010 and had a negative impact on the consumption of services. The data from the short-term business indicators show a decelerating rate of decline of the retail trade turnover since the beginning of 2010, but the average annual value remained at around 7%. The expectations of managers in the sales branch for sales during the next few months are optimistic Cyclical Position In 2010 the potential growth of the Bulgarian economy slowed down to 1.6%. The low economic activities, which lead to a decline in capital accumulation, was the main factor determining this development. In 2011 the potential growth is expected to reach 2.5% and the output gap to shrink to 3.8%. In terms of production factors, the negative contribution of employment is decreasing; the total factor productivity has the largest contribution (1.5 percentage points, pps), followed by capital (1.1 pps). In the medium term, by 2014, the Bulgarian economy is expected to expand at growth rates of over 4%, and the output gap is to narrow but will remain negative until This will be partly due to the potential growth increase supported by both the accumulation of capital in the economy and the increase of the total factor productivity Inflation rates In the Table 2 below different forecasts for inflation rates are presented. For the purposes of the preparation of the National Performance Plan the IMF forecast was adopted. Edition 1.0 Released edition page 8 of 95

9 Annual average inflation rates Year Source A A F D D D IMF 7 2.5% 3.0% 4.8% 3.7% 2.7% 3.0% EUROSTAT 8 2.5% 3.0% National data 9 (National Statistical Institute) 2.8% 2.4% 3.85% 3.35% 2.64% 2.43% Table 2 Inflation rates in Bulgaria The inflation forecasts have been very dynamic recently. The forecasts for a higher inflation are driven mainly by the expected increases of the international prices of goods (foodstuffs and oil). However inflation is expected to be limited due to the fixed exchange rate of the BGN to the EUR as well as the fiscal policy conducted by the government Expected EUR/BGN exchange rate development The fixed exchange rate of the BGN to the EUR being is expected to remain unchanged for RP1. For the purposes of the calculation of the en-route unit rates during RP1, there are possible slight deviations from this value, subject to the provisions of the Conditions of Application of the Route Charges System and Conditions of Payment Underlying assumptions with regard to the traffic forecast The traffic forecast used as a baseline in the national performance plan is a national one. The STATFOR forecast was duly analysed and its basics were taken into account. However, taking into account the recent reorganization in the Bulgarian airspace and the dynamics in the traffic flows mix, we are of the opinion that the base line of the STATFOR forecast corresponds to a continuous high growth of overflying traffic, which in our opinion would be difficult to materialize. The following assumptions for the national forecast were used: The current structure of traffic and its relation to the service units generated will remain unchanged. This means that about 95% of the en-route service 6 The source for the National data for the period ( ) is the Convergence Programme ( ) dated 15 April 2011 follow link: The inflation stated is based on the HCIP otnotes=yes&labeling=labels&plugin=1 9 Since 1999 the NSI has applied a methodology for constructing and calculating consumer price indeces, according to Eurostat requirements and International Monetary Fund recommendations. For ensuring the comparable index series, monthly consumer price indices have been revised for the period from January 1995 to December The calculated revised consumer price indices up to are used only for statistical and analytical purposes. Since calculations have been based on revised time series of the consumer price index. Calculations up to according to official published indices up to are not recalculated. The new time series could not be a ground for a change of the price of claim by outstanding legal proceedings. Edition 1.0 Released edition page 9 of 95

10 units generated in the Bulgarian airspace originate from overflying traffic, while the remaining 5% originate from international and domestic arrivals and departures; The main driver of the SU growth is expected to be the overflying traffic due to the increase of flights to Turkey and the Persian Gulf Area. International arrivals and departures are expected to grow at a slower pace in comparison with the overflights during RP1. Domestic traffic would most probably continue to follows unstable pattern of growth with a relatively low share of commercial flights More details on the en-route service units forecast are presented in section below Return on equity Under the full cost recovery system the10-year government bond rates were used as a reference for the determination of the return on equity. However, under the new EU regulations and the departure from the existing system, a risk premium should be accrued above this rate, taking into account the actual financial risk. The equity risk premium represents the additional return that investors require to hold equity rather than risk-free investments. A standard practice for the calculation of the cost of equity is the CAPM. It is also to be noted that the individual estimate of the risk premium depends on a number of factors, including the gearing (debt/equity ratio) of the company, general economic conditions, and the degree of correlation of risks in the company considered in correlation to the market as a whole In the case of BULATSA, the direct application of the CAPM is slightly limited. As BULATSA is a state-owned enterprise and it capital is not divided into shares traded on the Bulgarian Stock Exchange Nevertheless, market surveys have been performed on the bonds issued and traded at the Bulgarian Stock Exchange. It is to be noted that the maturity of the biggest part of these bonds is up to five years and the respective yield to maturity, as well as the current yield range between 6% and 10% The latest sovereign credit rating of Bulgaria is BBB (or equivalent) 11. The latest data for the long-term risk-free bond for Bulgaria is around 5.4% 12. A survey of the current benchmark spread to be borne by non-financial institutions is above the riskfree rate. The 7-10 years benchmark spread for BBB EUR-denominated corporate bonds is about basis points, while the 10+-year benchmark spread is slightly above 200 basis points. Taking into account these data, the minimum cost of equity for Bulgaria should be 7%. This is the one used for RP VAT on services From BULATSA is going to charge VAT on its services. This means that the Bulgarian ANSP will be entitled to accrue either 20% on its charges or apply a zero VAT rate, subject to the provisions of the EU VAT directives and national legislation, as well as being entitled to a VAT tax credit. As a result, the irrecoverable VAT now included in the cost base (both as a part of the operating costs and of the capital expenditure will be removed from the costs charged to the users during RP1, Edition 1.0 Released edition page 10 of 95

11 thus creating prerequisites to reduce the price of the services from 2012 onwards. The expected effect from this change is reflected in the costs concerned Aviation safety within Bulgarian airspace The paramount importance of aviation safety within Bulgarian airspace is reflected by the NSA safety audits and approved associated Aviation State Safety Programmes. They will be implemented in the State safety programme (draft document released by the time of adoption of NPP). BULATSA Acceptable Levels of Safety are established in compliance with ICAO Annex 11 in the ANSP s Business Plan Safety Programme and these are continuously reported to the NSA Institutional context for ANS provision covered by the performance plan The Directorate General Civil Aviation Administration (DG CAA) of the MTITC is the Bulgarian NSA, subject to the provisions of Article 16c of the Civil Aviation Act with regard to the safe and effective operation of air navigation services providers The Directorate General "Civil Aviation Administration" comprises five regional departments - airport administrations as provided for in Article 48a, par.4 of the Civil Aviation Act. The DG CAA shall perform the functions of a Civil Aviation Administration in accordance with the Civil Aviation Act and the International Conventions and Arrangements, which the Republic of Bulgaria is party to The Bulgarian State Enterprise Air Traffic Services Authority (BULATSA) is a legal entity which holds a certificate for the provision of air navigation services (the Bulgarian ANSP) and fulfils State functions for the provision of ANS in the controlled civil airspace of the Republic of Bulgaria. BULATSA s main spheres of activity at present include: Air traffic management aimed at achieving safety, efficiency and regularity of flights in the controlled civil airspace; Planning, provision, implementation, operation and maintenance of facilities, systems and equipment to ensure the communications, navigation, surveillance, power-supply, lighting 13, meteorological and aeronautical aspects of the serviced air traffic and its supporting infrastructure; Provision of communications, navigation and surveillance services; Provision of meteorological services; Provision of aeronautical information services; Provision of metrological services; Provision of information services for aircraft search and rescue operations; Management of the air traffic safety system within its assigned powers; Fulfillment of the obligations of the Republic of Bulgaria ensuing from international agreements in the ATM area, to which the Republic of Bulgaria is a signatory state; Collection of air navigation charges for the provision of air navigation services. 13 To be removed after the adoption of the respective changes in the Civil Aviation Act in compliance with Directive 2009/12/EC of the European Parliament and of the Council of 11 March 2009 on airport charges Edition 1.0 Released edition page 11 of 95

12 1.3. Stakeholder consultation Below is an outline of the process of consulting the NPP with the stakeholders, the potential benefits from its implementation and adoption process Bulgarian and Romanian NSAs agreed to have a common consultation process at FAB level at the first meeting of the DANUBE FAB Performance Focus Group in Sofia on ; The draft Bulgarian NPP was made available to the stakeholders in due time on (3 weeks before the stakeholder s meeting date) on DG CAA site The stakeholder s meeting was held on 5th May 2011 in Bucharest (see the outcomes in Annex E); Following the consultation, the Bulgarian s NSA has reviewed the draft NPP with regard to the stakeholder comments obtained and issued recommendations to the eligible entities; The final NPP was submitted to the MTITC for formal adoption. Following adoption, the NPP will be communicated to the European Commission; In case of recommendations from the Commission s assessment of the NPP, it will be revised as appropriate. Note: New consultation meeting (special or part of the annual bilateral meeting) with the stakeholders will be held in Sofia for the State NSA costs, not consulted with the stakeholders due unavailability in previous versions of the NPP. Edition 1.0 Released edition page 12 of 95

13 2. National performance targets and alert thresholds 2.1. Performance targets and alert thresholds for RP The Republic of Bulgaria is committed to achieving the National performance targets set for Capacity and Cost-efficiency, given in Table 3 below by the end of year Even though the other two KPI are not mandatory for RP1, they will be continuously monitored. KPA KPI National targets National thresholds (a) Safety N/A N/A N/A N/A N/A (b) Capacity En-route ATFM delay (minutes per flight) ±0.05 (c)environment N/A N/A N/A N/A N/A (d) Costefficiency Determined en-route unit rate (2009 prices in national currency BGN) Deviation over a calendar year by at least 10% of the actual traffic versus the traffic forecasts below Deviation over a calendar year by at least 10% of the actual costs at EUwide level versus the reference costs below References for the activation of the thresholds Reference en-route traffic at national level (in million en-route service units) Reference determined en-route costs at national level (in million BGN 2009) Table 3 Presentation of the national targets and thresholds for RP1 The National KPAs are further detailed below National Safety target(s) and threshold(s) No national targets and thresholds are set for the RP The currently used Accepted Levels of Safety, established in compliance with ICAO Annex 11 at a national level for the ANSP are shown in Annex B - Extracts from BULATSA (Bulgarian ANSP) Business Plan National capacity target(s) and threshold(s) The EU capacity target breakdowns for the ACC, the ANSP and at FAB level are given in the following Table 4,Table 5 and Table 6. Edition 1.0 Released edition page 13 of 95

14 EU Target ACC Breakdown State ACC ACC CODE Bulgaria Sofia LBSRCTA Table 4 EU Target Sofia ACC Breakdown EU Target ANSP Breakdown State ANSP ACC ACC CODE Bulgaria BULATSA Sofia LBSRCTA Table 5 EU Target BULATSA Breakdown EU Target FAB Breakdown FAB State ANSP ACC ACC CODE DANUBE Bulgaria Bulatsa Sofia LBSRCTA Romania ROMATSA Bucuresti LRBBCTA Table 6 EU Target DANUBE FAB Breakdown The target for the mandatory capacity KPI for RP1 is set out in Table 7. Capacity KPI Intermediate Value Intermediate Value Target Minutes of en-route ATFM delay per flight Table 7 Presentation of the Bulgarian en-route capacity target for RP Considering the reference value provided by Eurocontrol and the contribution of Bulgaria to capacity targets at FAB and European level, a target value as of 0.12 minutes of en-route ATFM delay per flight is adopted for the year During the RP1, the capacity performance of the ANSP will be monitored, and opportunities for more demanding values will be considered for RP2, aligned to the RP2 EU-wide targets National Environment target(s) and threshold(s) No national targets and thresholds are set for the RP Efforts have been made in order to achieve horizontal en-route flight efficiency and minimization of the difference between the length of the en route part of the actual flight trajectory and the optimum trajectory, as well as effective use of civil/military airspace structures. Based on the current capacity plan and assuming baseline traffic growth, the en-route summer delay forecast for Sofia ACC is zero minutes per flight. The planned ARN 7 implementation is considered to be the main environmental contribution for RP1. Edition 1.0 Released edition page 14 of 95

15 As part of Danube FAB activities, the establishment of an environmental management system in compliance with ISO is in progress. This will help to identify and control the environmental aspects of the ANSPs activities, to improve national environmental performance continuously and to implement a systematic approach to setting environmental objectives and targets, to achieve these and to demonstrate that they have been achieved by the ANSPs The second main area of concern is the effective use of the civil/military airspace structures, e.g. CDRs availability, FUA e.g. TSA etc With regard to the 3-rd KPI, which shall be developed from RP2 on, the Bulgarian airports also pose concerns. All Bulgarian airports should comply with Regulation No.16 and Regulation No.30, concerning airport noise and the gas emissions of aviation engines. An airport s first step in environmental management is a noise monitoring system. Complying with LSSIP s objectives, the Sofia Airport operator put into a trial mode a system for the monitoring of noise for the new runways 09/27. The Sofia Airport operator applied the noise abandonment methodology to the buildings in the vicinity of the airport and replaced the window joineries of buildings in the vicinity of the airport. The implementation of a noise blast protector shield for the reduction of noise during the engine test was performed in 2009 at Sofia airport at the engine run-up bay A national improvement process on route design is in progress. It is considered that the implementation of a national route structure is a continuous process, according to the RNDSG recommendations. All the RNDSG recommendations were implemented by the end of 2009/beginning of The effective use of civil-military airspace structures is of great significance for a better environment. According to the recommendations of the Directorate of Civil- Military ATM Coordination report (DCMAC report) related to the Flexible Use of Airspace (FUA) application in Bulgaria, modifications in the national legislation in order to achieve a full compliance with EC regulations are in progress. The revised version of Regulation No.19 will contain the requirements concerning the principal Civil-Military LoA as well as the LoAs between Civil and Military ATS units for a better coordination and a more flexible use of the airspace National Cost-efficiency target(s) and threshold(s) The national thresholds adopted comply with the ones defined by the European Commission; please refer to Table 3 above. The EC alert threshold has been defined in article 18 of Regulation (EC) 691/2010 and article 2 of Commission Decision 2011/121/EU of 21 February The national cost-efficiency targets are shown in Table 8. They comply with the EUwide ones. The compliance is demonstrated in section 2.2 below. Edition 1.0 Released edition page 15 of 95

16 Cost-efficiency KPI Real en-route determined unit rate (in national currency BGN at 2009 prices) Target Target Target Table 8 Presentation of the Bulgarian en-route cost-efficiency target for RP Consistency with EU-wide targets (and thresholds) The EU-wide targets are presented in Table 9 below. KPA Capacity KPI Minutes of en-route ATFM delay per flight EU-wide targets EU-wide thresholds Deviation over a calendar year by at least 10% of the actual traffic versus the traffic forecasts below Environment Improvement of the average horizontal en-route flight efficiency indicator compared to 2009 (in % points) 0.75 Deviation over a calendar year by at least 10% of the actual traffic versus the traffic forecasts below Costefficiency Average EU-wide determined unit rate for en- route ANS (in Euros 2009) References for the activation of the thresholds Deviation over a calendar year by at least 10% of the actual traffic versus the traffic forecasts below Deviation over a calendar year by at least 10% of the actual costs at EUwide level versus the reference costs below. Reference en-route traffic at EU-wide level (in million en-route service units) Reference determined en-route costs at EU-wide (in million Euros 2009) level Table 9 EU-wide targets and associated thresholds for RP Safety Although no safety targets are defined at national level for RP1 (see Section above) the following current practices will contribute to the overall safety of the European ATM network: Maturity of the SMS: The national ANSP (BULATSA) has performed selfassessment of its Safety Management System on an annual basis for the last 3 years. The target for SMS maturity level set for BULATSA is 70% by the end of 2014 (see extract of the BULATSA (Bulgarian ANSP) Business Plan, Annex B). The latest Safety Maturity Survey as per the 2010 ATM Safety Framework (EUROCONTROL Doc. ESP ) was carried out in October 2010 and was submitted to the EUROCONTROL Survey Team. Edition 1.0 Released edition page 16 of 95

17 Severity classification as per RAT: The Bulgarian NSA has approved BULATSA s Safety Programme - cf. Annex C of this plan. The Acceptable Levels of Safety are set for ATM-related incidents classes A to C. It is envisaged to introduce the EUROCONTROL (Doc. ESP/ ) Risk Analysis Tool (RAT) by the end of 2011 in order to be able to apply this KPI in full from RP2 on Just Culture: An assessment of safety culture has taken place in BULATSA for the last 3 years. The latest safety culture survey was carried out together with EUROCONTROL in A programme for improving the safety culture has been adopted by BULATSA. As soon as an EU-wide methodology for just culture is adopted, it will be implemented by BULATSA Capacity This section sets out how each capacity target defined at the national level (as presented in Section is consistent with, and adequately contributes to the achievement of the EU-wide capacity target established for RP The national target and intermediate values for the mandatory capacity KPI, as well as the reference values provided by the capacity planning process of EUROCONTROL can be presented in Table 10. The national target has been chosen as the optimum share at local level of the EU-wide capacity target and its contribution to the establishment of Danube FAB. It addresses all possible ATFM delay causes. En-route ATFM delay prior to RP1 (en-route ATFM delay in minutes per flight) A 2010A 2011F 2012F 2013F 2014F EU capacity wide targets Reference value from the capacity planning process of EUROCONTROL (en-route ATFM delay in minutes per flight) for Bulgaria % n/n National capacity target (en-route ATFM delay in minutes per flight) % n/n-1 27% -15% Difference between the target and the reference value Table 10 En-route capacity target - details at national level Environment Targets related to the environment are not included in section for RP1. Nevertheless all the continuous efforts for optimized route network management are of strong contribution to the performance of the European network and it s consistency with the EU-wide environment target established for RP1. Edition 1.0 Released edition page 17 of 95

18 Cost-efficiency En-route SU Forecast The en-route service units generated in the Bulgarian airspace stem from aircraft flying through the airspace over the territory of Bulgaria and over the High Seas, for which responsibility has been delegated to the Republic of Bulgaria by ICAO, as well as from international and domestic arrivals and departures in the airspace outside the 20 km zone around the airports. The structure of the service units generated by these two major types of traffic has been relatively stable over the years. The overflights generate about 95% of the total en-route service units, while the en-route service units related to international arrivals and departures generate the remaining 5% The overflying traffic consists of five main two-way flows, as follows: Turkey; Middle East (ICAO Zone O); Far East (ICAO zones V and W); Greece, Cyprus and Israel; North-East Africa The annual correlations between the volumes of these flows vary significantly over the length of the period analysed, starting from This outcome shows that each flow is influenced by specific events related to these destinations and follows its own pattern of development. However, it is to be noted that the correlations for the period between these flows have been increasing, except for the flow to/from the Far East (ICAO zones V and W). While the other four flows have grown at a different pace during this 13-year period, the latter has recorded a continuous decrease (about 60% and is still declining) A new event has been observed since the beginning of Due to the unrest in North-East Africa the flow to that destination has dropped significantly. It is expected to be partially offset due to a shift of tourists to/from that destination to Turkey The latest optimizations in the route network implemented in 2009 and in 2010 have resulted in a decrease in the average distance overflown. This fact has a positive effect on the flight efficiency results, however it leads to a less than proportionate growth in the service units as compared to the traffic. Besides, there is an ongoing decrease in the average weight factor. These two facts have led to a constant reduction of the ratio service units per flight as shown in the Figure 1 below. Taking into account the forecast for the development of the overflying traffic, as well as the shortening of the routes due to the implementation of FABs, this trend will most probably continue and the average value of this ratio is expected to be around 4.0 in the future. This ratio has its lowest values in the summer, when it drops even below this value. Edition 1.0 Released edition page 18 of 95

19 Service unit per overflying flight Figure 1 Service units per overflying flight for Bulgaria To better illustrate the effect described above, please refer to the following Table 11: Year /- % Number of aircraft flying over Bulgaria 406, , % Chargeable service units, generated by overflying traffic (national data) 1,705,151 1,734, % Table 11 Chargeable service units and number of aircrafts over Bulgaria These effects, combined with the growing concerns on debt crisis in some of the countries in the region, as well as the political instability in North-east Africa suggest that most probably a moderate optimism on the traffic growth through our airspace is appropriate, so as to adjust the normal trend of traffic growth expectations The growth in service units in 2010 vs. 2009, generated by arrivals and departure aircraft is about 7,000, and has relatively small impact on the total picture Further to the decomposition of the figures provided in Table 12 below, our forecast for service units corresponds to the following numbers of overflying aircraft during RP1: K; K; and K, which corresponds to 3.89% of the annual average growth using 2010 as a base. The STATFOR baseline forecast (Table 13) in our opinion corresponds to 4.62%, which may be slightly optimistic taking into account the national trends of average weight and distance factors, as well as the additional expected shortening of air routes within the DANUBE FAB airspace Bottom-line, the forecasted total service units used for the determined unit rate is the national one presented in Table 12 below; The grounds and the expectation for the 2011 service units forecast were presented at the enlarged Committee session in November It was accepted by the users without additional questions. Edition 1.0 Released edition page 19 of 95

20 En-route total service units prior to RP A 2010 A 2011 F 2012 F 2013 F 2014 F 1,798 1,840 1,785 Forecast total service units used for the determined unit rate Source: National forecast National forecast 1,940 1,980 2,020 % n/n-1 2.3% -3.0% 8.7% 2.1% 2.0% STATFOR service units forecast (Baseline scenario) 1,798 1,840 1,940 2,018 2,089 2,169 EUROCONTROL Short - and Medium-Term Forecast of Service Units: Date of STATFOR SU forecast: February 2011 Update % n/n-1 2.3% 5.4% 4.1% 3.5% 3.8% Table 12 En-route service units forecast used for the calculation of the national en-route cost-efficiency target in 000 Scenario /2010 Total Growth High % Base % Low % Table 13 EUROCONTROL Short - and Medium-Term Forecast of Service Units ( 000) February 2011 Update Determined en-route ANS costs in nominal terms Determined state costs comprise the costs of four accountable entities (Table 14) BULATSA, the NSA,) and EUROCONTROL and are spread per nature as shown in Table 15 below The costs of BULATSA are further detained in Section 3 A of this plan The NSA has been funded by the state budget by the end of However, from 2012 onwards, it has established its own cost base. The NSA costs to be included in the national determined costs are presented in ANNEX A, Table 1 State NSA. As a category by service they are included under Supervision costs. These costs are allocated between en-route and terminal services to en-route service provision. They are further detailed in Section 3. Edition 1.0 Released edition page 20 of 95

21 ANS en-route cost per entity Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D ANSP BGN % n/n-1-5.8% 11.6% 0.3% 3.8% 0.9% NSA BGN % n/n-1 n/a n/a n/a 2.9% 2.9% % n/n-1 n/a n/a n/a 57.8% 15.2% EUROCONTROL costs % n/n-1 4.6% -10% 7,9% 0.6% 2.2% Total determined costs in nominal terms BGN % n/n-1-5.2% 10.3% 1.6% 3.6% 1.0% Table 14 National determined en-route costs - breakdown per entity (in nominal terms in national currency in BGN million) ANS en-route cost per nature Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff BGN % n/n-1 0.9% 6.8% 2.7% 1.7% 2.4% Other operating costs BGN % n/n-1-9.5% 32.2% 0.8% 1.4% -1.3% Depreciation BGN % n/n % 4.9% 1.6% 14.3% -0.8% Cost of capital BGN % n/n-1-9.9% 4.6% -2.4% 4.2% 0.2% Exceptional items BGN % n/n-1 Total determined costs in nominal terms BGN % n/n-1-5.2% 10.3% 1.6% 3.6% 1.0% Table 15 National determined en-route costs - Breakdown by nature (in nominal terms in national currency in BGN million) Determined en-route ANS costs in real terms The determined costs in real terms are subject to upside and downside variations during RP1 however the general trend is downwards see Table 16 below The data used for inflation is shown in Table To calculate the price index for RP1, the following assumptions for the inflation were used: Edition 1.0 Released edition page 21 of 95

22 For the year 2010, the EUROSTAT data of (3.0%) for the actual inflation were used vs. national data (2.4%); For the years from 2011 to 2014, IMF forecast data were used. Total determined costs in nominal terms Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D BGN Inflation % 2.5% 3.0% 4.80% 3.70% 2.70% 3.00% Inflation index (100 in 2009) Total determined costs in real BGN terms % n/n-1-7.9% 5.4% -2.1% 0.9% -2.0% Table 16 National determined en-route costs - total in real 2009 terms in BGN million Real en-route determined unit rate Determined costs in real terms (in national currency at 2009 prices) Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D BGN Average per annum Total en-route SUs ( 000) Real en-route determined unit rate in national currency (at 2009 prices) BGN % n/n % 8.6% -9.4% -0.9% -3.8% 2009 Exchange rate (1 EUR=) EUR/BGN Real en-route determined unit rates (in 2009 EUR at 2009 exchange rate) EUR % -5.34% % n/n % 8.6% -9.9% -1.2% -3.9% EU-wide target: average determined en-route unit rate (in 2009 EUR) 2009 EUR % -3.50% Table 17 National real en-route determined unit rate (in national currency at 2009 prices and in EUR 2009 Edition 1.0 Released edition page 22 of 95

23 The planned development of the determined costs through RP1 combined with the expected growth of the total service units result in a determined unit rate profile, which exceeds the EU-wide targets of -3.5% see Table The average decrease in real terms over the period is 3.64% The average decrease in real terms over RP1 is 5.34% Terminal ANS costs The only responsible entity for providing terminal ANS during RP1 is BULATSA. BULATSA provides services at five international airports in Bulgaria, which comprise Sofia (LBSF), Varna (LBWN), Burgas (LBBG), Plovdiv (LBPD) and Gorna Oryahovitsa (LBGO) The total costs for the provision of these services are presented in Table 18. All airports, where BULATSA provides ANS are included in one charging zone During RP1, there will be also NSA costs included in the TNC cost base The performance scheme requires that, for RP1, EU Member States provide an overview of determined costs for terminal services. This information is provided in the table below. No targets are required to be set for terminal costs for RP1. ANS terminal cost per entity/charging zone Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D BULATSA BGN % n/n-1-3.8% -10% 5.4% 3.2% 4.9% NSA % n/n-1 Total terminal costs in nominal terms BGN % n/n-1-3.8% -10% 6.3% 3.2% 4.9% Table 18 National costs for terminal ANS - Breakdown per entity/charging zone (in nominal terms in national currency) Interdependencies between targets No trade-offs between targets are foreseen in RP Carry-overs from the years before RP1 After several years of sluggish service units and traffic growth ( ), the years 2007 and 2008 were years of high and unexpected traffic growth for BULATSA. This, combined with the good cost control measures resulted in relatively high over-recoveries for these two years of BGN 21,227K and BGN 10,462K respectively. In 2009 the 2007 over-recovery grew by an additional BGN 438K, amounting to a total 2009 over-recovery of BGN 21,665K Edition 1.0 Released edition page 23 of 95

24 returned to users in The 2010 results show an increase of the 2008 over-recovery. Thus, the total 2010 over-recovery to be returned to users in 2012 is BGN 19,682K. The final results for 2011 to be transferred in 2013 will be available in May Through the EUROCONTROL adjustment mechanism they are going to have impact on the nominal unit rates for RP1. Table 19 below will be further revised in May Carry-over from To 2009 To 2010 To 2011 To 2012 To 2013 To 2014 To 2015 To RP , , , , Total Table 19 Carry-overs from the years before RP1 - under (-) and over (+) recoveries (in nominal terms in national currency It is to be noted that the figures for the balances shown in Table 14 above and established under the conditions of the adjustment mechanism are calculated using the chargeable costs/chargeable service units method. These are to be recalculated using the total costs/total service units method, subject to the provisions of Regulations (EC) 691/2010 and 1191/2010, as shown in Table 20 below. Carry over (in '000 BGN) Chargeable costs/chargeable service units method 6,827 21,227 10,462 21,665 19,682 Adjustment Total costs/total service units method 6,827 21,227 10,570 21,849 19,845 Table 20 Carry-overs from the years before RP1 - under (-) and over (+) recoveries (in nominal terms in national currency adjusted for Total costs/total service units method 2.4. Parameters for risk sharing and incentives The framework for the implementation of the incentives is presented in the Table 21below. Edition 1.0 Released edition page 24 of 95

25 KPA Safety Capacity Possible incentive schemes for ANSPs Incentives on safety targets shall aim at encouraging that required safety objectives are fully achieved and maintained while allowing for performance improvements in other key performance areas. They shall not be of financial nature and shall consist in action plans with deadlines and/or associated measures in application of Commission Regulation (EC) No 2096/2005 of 20 December 2005 laying down common requirements for the provision of air navigation services and/or implementing rules resulting from Regulation (EC) No 216/2008. Incentives on capacity targets will not be of financial nature. There will be monitoring of the capacity KPI and its values, with corrective measures to be taken. Action plans with deadlines and associated measures will be introduced in order to sustain performance and capacity. Environment Incentives on environment targets are not set since no KPI is defined. Cost-efficiency Incentives on cost-efficiency targets shall be of financial nature and shall be governed by appropriate provisions in Article 11a of Regulation (EC) No 1794/2006. They shall consist in a risk-sharing mechanism, at national or functional airspace block level. Table 21 Incentive schemes for RP A more detailed application and explanation of the incentive schemes is presented in Table 22 and in the text below. KPA Incentive schemes applied on BULATSA at National level for RP1 Safety Capacity Environment Cost-efficiency N/A Corrective/preventive measures N/A Risk-sharing mechanism as per Article 11a of Common Charging Scheme Regulation Table 22 Presentation of the incentive schemes at National level for RP Safety No incentive scheme is applicable at national level for RP1 on safety. The Bulgarian NSA is monitoring the safety performance of the ANSP as per Regulation 2096/2005 and Regulation 1315/ Capacity DG CAA will be monitoring the en-route capacity KPI and its values on a monthly basis. When needed DG CAA will take corrective measures in order to ensure BULATSA s compliance with the targets Environment Edition 1.0 Released edition page 25 of 95

26 No incentive scheme is applicable at national level for RP1 on the environment target. No performance variation levels and the applicable level of bonus and penalties have been determined Cost-efficiency The incentives on cost-efficiency will be divided in two main areas traffic risk sharing and cost risk sharing, described in paragraphs and below Traffic risk sharing (TRS) There have been no arrangements on traffic risk sharing planned before RP Traffic risk sharing (TRS) in RP1 shall be based on the following assumptions: in line with art. 11a of Regulation (EC) 1191/2010; will apply to BULATSA costs. As long as the MET ANS services are provided by BULATSA internally, MET costs represent part of the ANSP costs, thus being included in the traffic risk sharing scheme. Traffic risk sharing excludes NSA costs. there are no other ANSPs which provide ANS without certification, in accordance with Article 7 of the Service Provision Regulation, whose costs are to be exempted from traffic risk sharing; The traffic risk sharing scheme (TRSS) will be based on article 11a of Regulation (EC) 1191/2010, as shown in Table 23. Parameter ActualSU SUF SU = 100% SUF If ( ) 2% SU Comment R = f, where R stands for the changes Treatment of ( ) in forecasted income R retained/incurred by the ANSP [ 70% R], R f ( SU 2% ) If 2% SU If SU 2% If SU 10% If 10% SU SU = shall be returned to the airspace users not later than the year (n+2) 70% R, R = f 2% shall be recovered from the [ ] ( ) SU airspace users not later than the year (n+2), but may be spread the carry-over of such loss in revenue over several years with the view to preserving the stability of unit rate ' ' 100% R, R = f 10% ( ) SU shall be recovered from the airspace users not later than the year (n+2), but may be spread the carry-over of such loss in revenue over several years with the view to preserving the stability of unit rate '' '' 100% R, R = f ( SU 10% ) shall be returned to the airspace users not later than the year (n+2) Table 23 The traffic risk sharing scheme Edition 1.0 Released edition page 26 of 95

27 Cost risk sharing (CRS) From the list of the uncontrollable groups of risk factors provided in Article 11a (8) of the Common Charging Scheme, the ones presented in Table 24 below may have influence on the determined costs for the ANSP in RP 1: unforeseen changes in national pension regulations and pension accounting regulations; unforeseen changes in national taxation law; unforeseen and new cost items not covered in the national performance plan but required by law; unforeseen changes in costs or revenues stemming from international agreements; significant changes in interest rates on loans It should also be stated that the present performance plan has been developed under the assumption that the currency board would be preserved during RP1. However, in case it is abandoned by the government, it is to be stated that the present NPP is subject to immediate revision In the Table 24 below are presented costs, which are deemed to be out of the control of BULATSA, the Republic of Bulgaria and qualified entities, subject to the provisions of Art. 11a, paragraph 8 of COMMISSION REGULATION (EU) No 1191/2010 of 16 December Cost items Social security costs Local (municipal and republican) taxes paid on property, certain types of costs and related services Procurement of external services, whose value is related to the minimum wage for the country Licence fees, contribution and charges payable to different organizations Overview Costs by nature affected: Staff costs Relevant risk factor: Parameters influencing this item: a. Total number of ANSP staff b. Maximum social security income c. Rates of different social security components d. Ratios for allocation of the different social security components between employer and employee Parameters b, c and d are exogenous parameters for BULATSA, as they are decided on an annual basis by different legislative acts of the Government. Parameter a is under the control of the management, however it cannot be expected that ANSP staffing should vary with the variations of parameters b, c and d and accommodate all unfavourable developments against the ANSP determined costs. Costs by nature affected: Other operating costs Relevant risk factor: Parameters influencing this item: e. value of the taxation base of company property f. rates (percentages, promiles) determined by the municipality where the property is located or registered, as well as by the government for the taxes contributed to the republican budget Parameter e is determined by a Government methodology, while the rates under Parameter f are decided on annual basis by the municipality. Costs by nature affected: Other operating costs Relevant risk factor: Parameters influencing this item: minimum wage for the country The parameter above is determined by a Government methodology Costs by nature affected: Other operating costs Relevant risk factor: Parameters influencing this item: Edition 1.0 Released edition page 27 of 95

28 Cost items Overview and bodies g. Licence fees h. EUROCONTROL costs Under parameter g are envisaged licence fees payable to different regulatory bodies e.g. for the use of the national frequencies spectrum as well as for software licences. Obviously, the costs under parameter h cannot be under the full control of an individual state. Insurance costs Costs by nature affected: Other operating costs Relevant risk factor: Parameters influencing this item: i. Significant changes in the scope j. Significant changes in the amount provided for liability and insurance cover k. Significant changes in the risk (e.g. events like 9/11) Here is envisaged the liability and insurance cover required under Art. 6 of Regulation (EC) 550/2004 paid by the ANSP New cost items related to Costs by nature affected: All types of costs/ unforeseen and new cost items not the financing of the covered in the national performance plan but required by law regulatory body. Relevant risk factor: Parameters influencing this item: l. definition of the volume of activities m. decision on the responsibilities of the respective bodies n. decision on the sources of financing and funding (incl. state budget) There are ongoing consultations at national level between various institutions, which will lead to additional costs in the future as a part of the en-route cost base. However due to the big number of the parties involved, there is a possibility these consultations as well as the respective cost base not to be completed by 30 June New cost items related to the financing of common projects under SESAR, as well as under DANUBE FAB Costs by nature affected: All types of costs/ unforeseen and new cost items not covered in the national performance plan but required by law. Relevant risk factor: and Parameters influencing this item: o. definition of the volume of activities p. decision on the responsibilities of the respective bodies q. decision on the sources of financing and funding (incl. state budget) Following the development of Phase 3 of the DANUBE FAB project and in particular the results stemming from the conclusions from: the real-time simulation; the CBA and the business case; there might arise additional operational and investment costs related to these conclusions, which cannot be foreseen at this stage. Table 24 Uncontrollable costs foreseen by DG CAA Incentive schemes in respect of airspace users DG CAA shall not apply an incentive scheme on the airspace users in RP1. Edition 1.0 Released edition page 28 of 95

29 3. Contribution of each accountable entity A. Bulgarian Air Traffic Services Authority - BULATSA 3.1. BULATSA (Bulgarian ANSP) share in the national targets and individual binding performance targets Safety No safety targets are defined at national level for RP1 (see Section 2.1.(a) above) Maturity of the SMS: The national ANSP (BULATSA) has performed a selfassessment of its Safety Management System on an annual basis for the last 3 years. The target for SMS maturity level set for BULATSA is 70% by the end of 2014 (see extract from the BULATSA (Bulgarian ANSP) Business Plan, Annex B). The last Safety Maturity Survey as per the 2010 ATM Safety Framework (EUROCONTROL Doc. ESP ) was carried out in October 2010 and was submitted to the EUROCONTROL Survey Team. The questionnaire was answered by the team of BULATSA s Safety Directorate who supported their evaluation by objective evidence from safety records. The head of the Safety Department was interviewed by the EUROCONTROL Survey Team. No historical data series of the Maturity of SMS are presented due to the different methodology used in 2008, 2009 and 2010 (2010 Overall Maturity Level was 55) Severity classification as per RAT: The Bulgarian NSA has approved BULATSA Safety Programme - see Annex C of this plan. Acceptable Levels of Safety have been set for ATM-related incidents classes A to C. It is envisaged to introduce the EUROCONTROL (Doc. ESP/ ) Risk Analysis Tool (RAT) by the end of 2011 in order to be able to apply this KPI in full from RP2 onwards. The safety data source for this KPI are the final investigation reports which are the output products of the investigation procedure in BULATSA SMS. The input data for the investigation process are: ATCO Reporting; Customers reports; Incident Safety Occurrence Reporting & Analysis Implementation reports from EUROCONTROL; any other sources that contain information related to flight safety. The essential part of input information are ATCO reports. Therefore BULATSA has implemented a Mandatory Occurrence Reporting Scheme (MORS) by internal SMS procedure. To enforce the MORS and to avoid a decline in safety reporting, BULATSA follows two main principles for control of data quality: Supporting Just Culture; Implementation of the Automatic Safety Net Monitoring Tool of EUROCONTROL (currently in process of implementation). The historical data from ATCO reports are monitored and analysed on an annual basis during the annual summary SMS review. The historical data series of the incidents KPI by which BULATSA sets its targets (ref. Annex C) are presented below in Table 25. Edition 1.0 Released edition page 29 of 95

30 Table 25 Incidents (class А, В ) per serviced aircraft ( actual) Just Culture: The assessment of safety culture has taken place in BULATSA for the last 3 years. Last safety culture survey was carried out together with EUROCONTROL in A programme for improving of the safety culture is adopted by BULATSA. As soon as EU-wide methodology for just culture is adopted, it will be implemented from BULATSA Capacity Capacity figures are set as described in Section Capacity figures are shown in Table 26 BULATSA contribution to the National capacity target (at ANSP and ACC level). BULATSA/SOFIA ACC 2009A 2010A 2011F 2012F 2013F 2014F En-route ATFM delay prior to RP1 (enroute ATFM delay minutes per flight) for the ANSP/ACC Reference value from the capacity planning process of EUROCONTROL (en-route ATFM delay minutes per flight) for the ANSP/ACC % n/n-1 N.A En-route ATFM delay per flight (minutes per flight) for the ANSP/ACC % n/n-1 N.A Difference between the ANSP/ACC contribution and the reference value for the ANSP/ACC Table 26 BULATSA contribution to the National capacity target (at ANSP and ACC level) Edition 1.0 Released edition page 30 of 95

31 Environment For RP1 the national target for environment has not been defined. Nevertheless, BULATSA is making continuous efforts in order to achieve and maintain horizontal en route flight efficiency and minimization of the difference between the length of the en-route part of the actual flight trajectory and the optimum trajectory, as well as effective use of civil/military airspace structures. The planned ARN 7 implementation is considered to be the main environmental contribution to RP As part of Danube FAB activities, the establishment of an environmental management system in compliance with ISO is in progress. This will help to identify and control the environmental aspects of the ANSPs activities, to improve national environmental performance continuously and to implement a systematic approach to setting environmental objectives and targets, to achieving these and to demonstrating that they have been achieved by the ANSPs Cost-efficiency ANNEX AANNEX ABULATSA determined en-route ANS costs are shown in Table 27. BULATSA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff BGN Other operating costs BGN Depreciation BGN Cost of capital BGN Exceptional items BGN Total en-route costs BGN Table 27 BULATSA Determined en-route ANS costs by nature (in nominal terms in national currency, BGN million) It is to be noted that BULATSA has improved it cost-effectiveness in times when there has been no obliging requirements for that. The possibility to provide lower unit rate, combined with the targeted improvement of cost-effectiveness and efficiency have been basic rules in the process of the cost-base establishment Besides this BULATSA has committed to follow a proactive partnership approach to the needs of the users and concluded an Industry Partnership Agreement with IATA for the period As part of it, was agreed a targeted descending en-route unit rate for the entire period of the agreement. The outcome exceeded the plans. BULATSA has been able to propose a lower than planned chargeable unit rate. The efforts made have been recognized by the independent Eagle Award Panel twice in June 2009 and in June Unfortunately this was not enough to win an Eagle Award, but IATA s recognition is accepted by BULATSA management as an encouragement to further to further improve the results and to provide more benefits to the users as early as possible. Edition 1.0 Released edition page 31 of 95

32 Is also to be noted that the performance of BULATSA has improved in nominal and real terms, taking also into account the unit rates. The cost control exercised by the Bulgarian ANSP has been recognized in the annual ACE reports Further to that no delays were recorded in the airspace where BULATSA has provided air navigation services The achievements described above were accompanied by improvement of staff productivity. The total BULATSA staff has been decreasing. Further to that ATCOhour productivity has improved significantly over the last ten years. In particular this metric measured at ACC level is one of the highest in Europe (ranked 14 out of 65 ACCs) and it is comparable with the productivity of the states in EUROCONTROL core-area Taking into account the size of the Bulgarian ANSP, the results achieved so far represent a real contribution of the Bulgarian ANSP to moderately alleviate the difficult financial position of the users These basics in cost planning have been continuously observed during the last ten years, and have subsequently contributed to the improvement of cost-effectiveness The big question today is where do we go from here? Even though that the terminal ANS are out of the scope of RP1, the vision of BULATSA management is that the improvement of cost-effectiveness is to be sought within the gate-to-gate framework, as this would allow better balance between the supply and demand of the services provided as well as more flexible use of the resources available Having said that more detailed information on the planning of the determined costs framework is provided below Staff costs Staff costs in RP1 are planned taking into account several underlying assumptions: continuous increase of staff productivity provide proper number of en-route ATCOs continuous improvement of cost-effectiveness expected level of inflation amendment of the existing organization of ANS service provision so as to optimize the balance between supply and demand of air navigation services provision flexible and optimized use of the available human resources Not all staff costs are under the full control of the ANSP. The social security costs outlined in Table 24 are deemed to be uncontrollable ANSP costs. The social security costs package comprise pension contributions, health contributions, unemployment contribution, etc. All these components are subject to variations of the Government decision for the respective financial year In May-June 2012 a new collective labor agreement (NCLA) is to be negotiated, where the conditions for personnel employment, movement, reductions, etc. were renegotiated for the period June 2012 May This will put additional pressure to the management to conclude a successful NCLA taking into account the conditions of the performance regulation during RP Other operating costs BULATSA s other operating costs are strongly influenced by the: national legislation framework; organization of service provision; legal status; scope of activities and the structure. Edition 1.0 Released edition page 32 of 95

33 As a state enterprise BULATSA shall procure the biggest part of the necessary goods and services under the public procurement procedures legislation. Due to the world financial crisis, there have been implemented stringent cost control measures for all state enterprises. As a result, these procedures are subject to multi-layer level of control and approval. This sometimes leads to a delay in the procurement of goods and services and to roll-over effect on operating costs throughout the years. This may result in a peak of other operating costs in the coming years especially in comparison with the previous years costs levels. In the same time to initiate public procurement procedures the respective financial means are to be provided in the annual financial plans. Sometimes the public procurement procedures are subject to appeal in court, which may cause further delays. There have been undertaken precautionary actions and steps to optimize the process, including at government level, so we are confident that the cost level of other operating costs forecasted in RP1 to be fulfilled Another factor, which will influence the other operating costs, is the introduction of VAT as described in paragraph above. Based on the 2010A costs data, the effect on the total other operating costs (en-route + terminal) would be about 10-11% reduction. This figure is stated for information purposes, as it is subject to variations taking into account the goods and services purchased Parts of the other operating costs are out of the control of the ANSP, as described in Table 24 above The operating costs can be also split into two main categories to maintain the usual business operations and to develop the air navigation service provisions. Taking into account the present cost and organizational structure, the following be can be added: Other operating costs related to maintain the usual business operations comprise costs for materials, local and government taxes and charges, mission costs, different types of external services. These are expected to rise with the general increase of the services prices; Other operating costs related to development and restructuring of BULATSA these comprise costs related to training of staff, purchase of specialized external consultancy services, staff training, allowances for restructuring of services. These are costs, which are expected to increase in RP1. there are also new cost items, which have not existed at present; Other operating costs are to be optimized, so as to optimize and stabilize them in the medium-term Depreciation costs In RP1 a new investment cycle for BULATSA will begin. There have been put a lot of efforts to align BULATSA investment cycle with the one of the development of traffic. There are achievements in this area, as BULATSA succeeded to put into operation a state of the art automated ATM system without increasing the en-route unit rate The depreciation costs are being calculated under the historic costs method The expected operating life of assets for both en-route and terminal service provision is being defined in compliance with the expected operating lives of the assets as stated in the EUROCONTROL Principles. Below is provided information on the expected operating life of some assets: Details on the planned major investments are provided in Table 31 and Table 32 below. Taking into account the investment cycle of BULATSA, a big portion of Edition 1.0 Released edition page 33 of 95

34 BULATSA interest bearing accounts is expected to be spent and to be transform in fixed assets in operation or under construction Cost of capital The asset base is determined by including the fixed, intangible assets and the net working capital employed The asset base is determined under the balance sheet by averaging the opening balances as at the beginning and the end of the year Under the full cost recovery regime, the national long-term bond rate was used as a guide, without adding an additional risk premium. However, under the risksharing mechanism, introduced by the new EC regulations, the return on equity has been determined in compliance with article above At present, the cost of equity for RP1 is determined at 7% At present BULATSA is 100% equity financed and this trend will be kept in RP1. The presently available financial resources will be transformed into either as assets in operation or as assets under construction Costs by service Further to the establishment of the determined costs by nature below is presented the way the costs by service are established BULATSA costs are grouped into cost centres which encompass all BULATSA direct and indirect costs. Each cost centre has different number of sub cost centres aiming to reflect in the best way the cost structure of the ANS service provision and to allocate properly all costs between both en-route and terminal cost bases and between the different categories in ANS (such as ATM, COM, NAV, SUR, etc.) Indirect costs are allocated using allocation bases, such as square metres, cubic metres, kilometers, man days, staff costs, kw/h, and occasionally composite cost allocation bases Total costs are allocated between en-route and terminal using allocation keys, which are specified in the EUROCONTROL Principles, as well as composite keys being derived from them. ICAO guidance stated in Doc is also being used for cost allocation Thus are determined the full costs for each of the bundle of ANS services provided by BULATSA based on the resources employed for each operational unit: by type, by service and each of both attributable to en-route and terminal navigation service provisions In Table 28 the en-route costs by service are presented. BULATSA Complementary information on the cost of capital en-route is shown in Table 29. BULATSA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Air Traffic Management BGN Communication BGN Navigation BGN Surveillance BGN Search and rescue BGN Aeronautical Information BGN Edition 1.0 Released edition page 34 of 95

35 BULATSA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Meteorological services BGN Supervision costs BGN Other State costs BGN Total costs BGN Table 28 Determined en-route ANS costs by service (in nominal terms in national currency, BGN million) BULATSA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Net book value fixed assets BGN Adjustments to total assets BGN Net current assets BGN Total asset base BGN Cost of capital pre tax rate % 5.3% 5.3% 6.7% 6.4% 6.7% 6.8% Return on equity % 7.0% 7.0% 6.4% 7.0% 7.0% 7.0% Average interest on debts % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Table 29 BULATSA Complementary information on the cost of capital en-route (in nominal terms in national currency, BGN million) BULATSA terminal ANS costs Further to paragraph above, additional information on terminal ANS costs is presented below see also Table 30 below Even though this type of service provision is out of the scope of the performance regulation in RP1, several major changes have been planned in the organization of ANS provision, which will affect the total terminal navigation costs and ANSP performance in RP1. These comprise: A) Removal of lighting service provision from BULATSA s scope of activities to the airport operators in compliance with Directive (EC) 12/2009; B) Construction of a new tower at Sofia airport; C) Consolidation of MET service provision at all international airports The actions listed above will have different impact on costs taking into account the timeframe when they will become effective. Edition 1.0 Released edition page 35 of 95

36 BULATSA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff BGN Other operating costs BGN Depreciation BGN Cost of capital BGN Exceptional items BGN Total terminal costs BGN Table 30 Terminal ANS costs in national currency Return on equity The concept for the determination of the return on equity is fully compliant with the one described in Section Investments Main BULATSA investments values are given in Table 31. More information for the investment program can be found in ANNEX B. Capital expenditure ( millions BGN ) 1. New En-route PSR and Mode S SSR Currency 2009A 2010A 2011F 2012F 2013F 2014F 2015F BGN SATCAS upgrade BGN New Sofia Tower BGN NEW TMA PSR & MODE S SSR at Sofia Airport BGN A-SMGCS BGN ADS-B en-route approach WAM BGN DME-DME BGN VOR DME BGN NEW UHF BGN National radio microwave network BGN AFTN/CIDIN/AMHS BGN VDL-Mode 2 BGN IT BGN Edition 1.0 Released edition page 36 of 95

37 Capital expenditure ( millions BGN ) Currency 2009A 2010A 2011F 2012F 2013F 2014F 2015F 14.Weather Radars BGN Sub-total main Capex above BGN Sub-total others Capex BGN Total Capex BGN Table 31 BULATSA en-route and terminal annual investments (capex) in nominal terms in national currency include VAT by the end of The amounts stated for RP1 are without VAT for en-route and terminal ANS The main BULATSA investments parameters and their relation with European ATM master plan and the SES legislation are given in Table 32. New En-route PSR and Mode S SSR SATCAS upgrade New Sofia Tower NEW TMA PSR & MODE S SSR at Sofia Airport A-SMGCS ADS-B en-route approach WAM DME-DME VOR DME New UHF National radio microwave network AFTN/CIDIN/A MHS VDL-Mode 2 IT Weather Radars CAPEX Project ID Domain (ex. ATM Systems, C, N, S,..) Allocation en-route / terminal ANS Assessed impact on Performance Targets (Planned) Start date of investment project (Planned) Commissioni ng date of investment Lifecycle (Amortisatio n periods in years) Planned total capex (BGN milion.) CNS AT M AT M CNS CNS CNS R R/T T R/T T R/T R high high n/a high n/a high CN S hig h CN S R/ T hig h CN S R/ T hig h CNS CN S CNS ATM CNS R/T R/T R R/T R/T avg avr g HIG H avrg avrg Edition 1.0 Released edition page 37 of 95

38 New En-route PSR and Mode S SSR SATCAS upgrade New Sofia Tower NEW TMA PSR & MODE S SSR at Sofia Airport A-SMGCS ADS-B en-route approach WAM DME-DME VOR DME New UHF National radio microwave network AFTN/CIDIN/A MHS VDL-Mode 2 IT Weather Radars European ATM Master Plan (OI,OIs, enablers reference) Related SES IR / Community Specification s. OI:L0 8 OIs: CM Enabl er: CTE- S5 262/2 009 OI:L0 8 OIs: CM Enabl ers: CTE- S OI:L08 OIs: CM Enabler : CTE- S5 262/2 009 OI:L10 OIs: AO / C330/ 02 OIs: AUO Enabler s: CTE- S5 CTE-S1 OI: L02-05 OIs: AO M AO M OI: L02-05 OIs: AO M AO M OIs: AO M AO M Ena bler: CTE -C5 OIs: IS IS Enabl er: CTE- C OI: L01-01 OIs: IS IS Ena bler : CT E- C /C 323 / /C 18/ 16 OI:L0 5 OIs: AUO / Table 32 BULATSA - Description of the main investments impacting RP1 (in nominal terms in national currency) More information on the investments benefits and their contribution to KPA can be found in ANNEX C Incentive mechanisms to be applied to BULATSA to encourage targets to be met over the reference period The incentive mechanisms to be applied on BULATSA to encourage targets to be met over the RP1 are shown in Table 33. Entity Measure Threshold Impact beyond threshold Capacity implementation of an action plan BULATSA Deviation over a calendar year by at least 10% of the actual Costefficiency traffic versus the traffic forecasts below. see Deviation over a calendar year by at least 10% of the actual costs at EU-wide level versus the reference costs below see Table 33 Approach to describing individual entity's incentive schemes Edition 1.0 Released edition page 38 of 95

39 B. Directorate General Civil Aviation Administration (DG CAA) share in the national targets 3.3. Cost-efficiency Although Directorate General Civil Aviation Administration of Republic of Bulgaria is recognized by the National Civil Aviation Act as NSA, there is a special unit which is accountable for all NSA tasks. The NSA cost comprise of staff costs, other operating costs, depreciation and cost of capital. The costs are charged to BULATSA according, shown in Table The DG CAA determined en-route ANS costs are presented in Table 34. NSA Currency 2009 A 2010 A 2011 F 2012 D 2013 D 2014 D Staff BGN Other operating costs BGN Depreciation BGN Cost of capital BGN Exceptional items BGN Total en-route costs BGN Table 34 NSA Determined en-route ANS costs by nature (in nominal terms in national currency, BGN million) In the tables in ANNEX A these costs are reported as Supervision costs. Edition 1.0 Released edition page 39 of 95

40 4. Civil-military dimension of the plan 4.1. General Considering the European forecast for a significant increase of air traffic, as well as the traffic forecast for Bulgaria, the importance of the pressing need to enhance the organization and use of the ATM network in Europe is recognized in Bulgaria as well. Air traffic diversity is expected to become greater with Unmanned Aerial Systems (UAS) and the multi-task nature of military aerial missions. The Flexible Use of Airspace (FUA) concept will contribute to a more flexible and adaptable airspace. The aim of the FUA concept implementation development in Bulgaria is to adapt the needs of airspace use for state purposes to match environmental requirements and civil aviation requirements for capacity, mission effectiveness, flight efficiency, etc. on the premise of the key role of safety. Military needs for airspace use are to enable the Bulgarian armed forces to carry out their tasks toward the self deference of the country and in line with NATO and EU membership and other international agreements Performance of the FUA application The following important actions have been planned, to ensure FUA concept implementation: Establishment of criteria and procedures providing the creation and use of airspace structures with adjustable lateral and vertical limits; Replacement when applicable of the segregation of airspace with reservation (TSAs with TRAs) and adopt the modular TSA/TRA activation in accordance with military requirements; Definition of the conditions under which the responsibility for separation between civil flights and military activities rests with the ATS units or with the controlling military units and establishment of the relevant procedures FUA compliance The FUA concept has been implemented in Bulgaria. In order to achieve a full compliance with the FUA regulation, the following improvements are ongoing: Full coverage of Strategic airspace management; Application of the provisions concerning the Safety assessment, hazard identification and risk assessment/mitigation before any change in FUA structure introduction; Establishment of procedures concerning the direct communication between Civil and Military ATS units The State has established a safety management process to conduct all safety assessment activities prior to the introduction of any changes to the operations of the FUA. Edition 1.0 Released edition page 40 of 95

41 FUA compliance monitoring is part of NSA safety audit. DG CAA assesses the FUA and FUA monitoring process description is being included in the NSA s auditing handbook and the Manual of NSA Operation Additional KPIs No additional KPIs for RP1 are envisaged. Edition 1.0 Released edition page 41 of 95

42 5. Analysis of sensitivity and comparison with the previous performance plan 5.1. Sensitivity to external assumptions BULATSA at present has enough capacity to meet the en-route traffic demand without delays during RP1. Variations in traffic are expected in comparison with the forecast; however, most probably alerting thresholds will not be activated In case of traffic downturn, cost savings should to be made to meet the EU-wide targets during RP Variation of exchange rates Variation of exchange rate is not expected due fixed exchange rate through the existing law-enforced monetary board. In case of board failure further analysis is TBD Major changes in functional ATM systems Major changes in functional ATM systems (ATS, CNS, AIS and MET) are considered to be a hazard which may cause an accident or a serious incident in the worst-case scenario according the Safety Oversight in Air Traffic Management Regulation. Their influence will be observed in the scope of capacity since safety and environmental targets are not set for RP1. Those functional ATM systems changes may significantly influence the capacity in terms of en-route ATFM delays (minutes per flight) for certain periods of time. Depending on the change cause (planned improvement and introduction of new standards and technologies or unexpected degradation, failure or disruption), positive or negative aspects could be analyzed. Since the positive aspects are related to implementing new technologies and principles set by SESAR for longer periods of time than the time limits of this document, they will stay out of scope Negative aspects of changes in Sofia ACC ATM systems, dealing with en-route traffic in Bulgarian airspace, will be observed in different scenarios since they are expected to worsen the National targets in case of disruption, or potential disruption, of air traffic services and related supporting services in the airspace In case of outage/failure of the operational Sofia ATC automated SATCAS v.2 LINUX system, there is a back up system - the SATCAS v.2 UNIX, ready immediately to ensure a fallback mode of operation with no delay CNS sources are also appropriately backed up. In case of Communication lines failure, there is a second contingency set of lines in standby mode. Navigational en-route aids failures are not of significant concern in this scope. Surveillance radars failure may cause extended separation (lateral separation 10 NM instead of 5 NM) and lower the sector capacity Contingency procedures regarding Sofia ACC are to be applied in case of unexpected circumstances and emergency situations in scenarios as: Natural phenomena that cause casualties and / or serious damage to property or endanger the life and health of the population; Unexpected technological failures of machines, equipment and components, causing suspension or a serious breach of the technological process, with explosions, fires, environmental pollution, destruction, victims, different Edition 1.0 Released edition page 42 of 95

43 threats to the life or health of population/staff or violation of environmental protection; Unexpected events affecting the ANS environment such as accidents or acts of unlawful interference, causing severe consequences, victims, injuries, destruction and damage caused losses requiring immediate rescue and remedial actions on a large scale; Strikes According the BULATSA s contingency plan, contingency procedures are to be implemented in 48 hours depending on the severity of the particular situation and inability to restore Sofia ACC. During that transition stage, sector capacities of the degraded Sofia ATC centre will be 0, causing significant delays in European airspace and closure of the Bulgarian airspace in particular. When contingency sectors in the aiding units are operating properly, sector capacities will be lowered which will influence the delays depending on the seasonal/daily traffic demand. If Sofia ACC, equipped with the SATCAS ATM System, ceases operations, the Varna Track View 200 System will be able to provide 2 Sofia contingency sectors with a capacity of 15 aircraft per hour and 2 Varna contingency sectors with a capacity of 25 aircraft per hour. Varna and Burgas have also 12 SATCAS workstations (6 stations each), capable of working in an independent mode with independent MRT systems Implementation of contingency procedures within neighboring countries ACCs due to functional ATM systems failure will have a negative impact on Sofia ACC sectors capacities, according to the traffic deviation depending on the seasonal and daily load A core principle in planning the cost of providing ATS, CNS, AIS and MET services in the preparation and enforcement of the Contingency Plan is that the cost should be kept to a minimum by utilizing the already available resources of BULATSA. Therefore, no provisional amounts have been planned for running costs for activities that are unlikely to occur except for those aimed at reaching and maintaining the necessary level of readiness, such as costs for: Conducting theoretical and practical training of operational and technical personnel working in emergency situations; Examination of the readiness of the management council at the strategic and the tactical levels to implement contingency; Examination of the part of the operational and technical personnel in the preparedness to implement contingency; Purchasing and maintaining in readiness the relevant technical means and systems Contingency procedures have also been considered in the Danube FAB Contingency of ATM Service document. Following analysis of the proposed contingency plans, the experts from BULATSA and ROMATSA have reached a mutual agreement that, at this stage it is not appropriate to develop a Common Contingency Plan for the provision of air traffic control for each Party s contingency situations coverage ATM systems, although designed by the same manufacturer, are different enough and are not designed and built with sufficient capacity to assume the operations of an adjacent ACC Before deciding to upgrade the capabilities of the existing systems to such an extent it is necessary to elaborate an analysis of the expected costs and Edition 1.0 Released edition page 43 of 95

44 benefits. Pending completion of such an analysis and the establishment of common criteria for ATCO and ASTEP training and the contingency planning by the NSAs of the two states, it would be reasonable and cost-effective to maintain the current situation within two independent Contingency Plans Comparison with previous performance plan This section is not applicable for the first reference period. 6. Implementation of the performance plan 6.1. Monitoring of the performance targets The NSA/DG CAA resources will be used to monitor the implementation of the performance plan The NSA/DG CAA will monitor the performance of the accountable entities in terms of the KPIs and targets defined in Section 2 and Section The NSA/DG CAA will monitor the actual realization of external assumptions and the impact of external factors to which performance is sensitive (as set out in Section 5.1) The NSA/DG CAA will monitor the evolution of uncontrollable costs, if any; The NSA/DG CAA will monitor the reaching of the alert thresholds (defined at EU-wide level or at national level in Section 2.1) beyond which the alert mechanism may be activated For monitoring purposes, the NSA will conduct safety regulatory audits in accordance with Regulation (EC) 1315/2007 and Regulation (EC) 2096/2005, as amended by??? Regulation (EC) 482/2008, Regulation (EC) 668/2008 and Regulation (EC) 691/2010. The NSA will announce its twoyear inspection program which is updated annually, to include all certified suppliers and the planned times for the inspections. Based on this program, a schedule coordinated with the ANSP will be drawn up and sent before the inspections. The two-year program will ensure a sufficient number of audits to be conducted to verify ANSP compliance with applicable safety regulatory requirements The ANSP reports incidents to both NSA and the Aircraft Accident Investigation Unit (AAIU). In accordance with Article 9 (1) of Regulation No. 13 on aircraft accident investigation the AAIU is responsible for the categorization of the occurrences. Following categorization both the CAA and the ANSP will be informed. If the severity is class A, then the investigation is performed by the AAIU. In all other cases the investigation will be performed by the NSA or by the ANSP (if delegated such responsibility by the NSA on the grounds of Art.16b of the Civil Aviation Act). The severity classification for occurrences other than class A is performed by the ANSP At the time of the signature of this document, ESARR 4 is being used for the assessment of the ANSP s safety assessments. The NSA activities guide is in a process of preparation and will incorporate such procedures Data from the entities subject to the NPP will be collected and the KPIs will be periodically analyzed. Overall progress against the targets will be assessed. Edition 1.0 Released edition page 44 of 95

45 An annual report with the outcome of the overall monitoring as per Article 17 of Commission Regulation (EU) 691/2010 will be prepared by the DG CAA, reviewed by the MTITC and submitted to the European Commission Corrective measures The NSA/DG CAA will undertake appropriate measures to resolve situations where the performance targets are not being met during the reference period, as required by Article 17(1) of the Performance Scheme Regulation In case of deviation of the KPA targets and threshold attainment, the NSA/DG CAA will require the accountable entities to submit their own plans with corrective measures. The plans will be reviewed and additional corrective measures will be prescribed as necessary and communicated to the accountable entities The implementation of the corrective measures plans will be monitored and reviewed and additional corrective measures might be required Enforcement tools The enforcement tools which are available to the State for the implementation of corrective action plans are revocation of the certificate and the levy of fines as stated in Chapter 13 of the Civil Aviation Act and Regulation No 1/2003 of the MTITC concerning Flight Crew Licenses. DG CAA, designated as NSA according to Article 16-c, is in charge of imposing the sanction. Edition 1.0 Released edition page 45 of 95

46 Annexes The following annexes A to D should be provided as part of the national performance plans. These should be completed with any other documentation relevant for the targets justifications. ANNEX A. Reporting Table 1 (Total costs) and Table 2 (Unit rate calculation) and "additional information" as per Article 8 of the Common Charging Scheme Regulation (Transparency of costs and of the charging mechanism) Table 1 - Total Costs Charging zone name Bulgaria Period of reference : Consolidation - all entities Forecast Costs* Determined Costs Actual costs Cost details 2010F* 2011F* Detail by nature (in nominal terms) 1.1 Staff 83 87,6 90,0 91,5 93,7 82,0 1.2 Other operating costs 31 31,4 31,6 32,1 31,7 23,8 1.3 Depreciation 23 21,0 21,3 24,3 24,2 20,0 1.4 Cost of capital 22 20,2 19,7 20,5 20,6 19,3 1.5 Exceptional items Total costs ,1 162,6 168,5 170,1 145,0 Total % n/n-1 0,8% 1,6% 3,6% 1,0% Staff % n/n-1 5,2% 2,7% 1,7% 2,4% Other op. % n/n-1 2,6% 0,8% 1,4% -1,3% 2. Detail by service (in nominal terms) 2.1 Air Traffic Management ,3 87,8 89, Communication ,3 22,3 22, Navigation 9 9 9,7 9,6 9,8 9 Edition 1.0 Released edition page 46 of 95

47 2.4 Surveillance ,3 19,8 19, Search and rescue 0 0 0,0 0,0 0, Aeronautical Information 5 5 5,5 5,4 5, Meteorological services ,3 13,2 13, Supervision costs 0 0 1,5 1,5 1, Other State costs 9 8 8,8 8,8 9, Total costs ,1 162,6 168,5 170,1 145 Total % n/n-1 0,8% 1,6% 3,6% 1,0% ATM % n/n-1 0,3% 0,6% 3,0% 1,4% CNS % n/n-1 1,2% 0,5% 4,9% -0,3% 3. Complementary information on the cost of capital and on the cost of common projects (in nominal terms) Average asset base 3.1 Net book val. fixed assets Adjustments total assets Net current assets Total asset base Cost of capital % 3.5 Cost of capital pre tax rate 5,3% 6,7% 6,4% 6,7% 6,8% 3.6 Return on equity 3.7 Average interest on debts Cost of common projects 3.8 Common Project 1 4. Complementary information on inflation and on total costs in real terms 4.1 Inflation % (1) 2,2% 4,8% 3,7% 2,7% 3,0% 3,0% 4.2 Price index - Base 100 in ,2 107,1 111,1 114,1 117,5 103,0 4.3 Total costs real terms (2) Total % n/n-1-3,8% -2,1% 0,9% -2,0% 5. Deduction of costs allocated to exempted VFR flights (in nominal terms) 5.1 Total costs ,1 162,6 168,5 170, Costs for exempted VFR flights Total costs after deduction (3) Edition 1.0 Released edition page 47 of 95

48 Costs and asset base items in ' BGN - Service units in ' (1) Forecast inflation used for establishing the determined costs in nominal terms - actual inflation recorded by EUROSTAT (2) Determined costs (performance plan) in real terms - actual costs in real terms - base 100 in 2009 (3) Determined costs (after deduction of VFR costs) reported at line Reporting Table 2 (in nominal terms) *Forecast data used for the calculation of the corresponding unit rates (i.e. November 2009 data for 2010 F; November 2010 data for 2011 F) Table 1 - Total Costs Charging zone name Bulgaria Period of reference : ANSP Name BULATSA Forecast Costs* Determined Costs Actual costs Cost details 2010F* 2011F* Detail by nature (in nominal terms) 1.1 Staff ,0 1.2 Other operating costs (Incl ECTL) ,7 1.3 Depreciation ,0 1.4 Cost of capital ,3 1.5 Exceptional items ,0 1.6 Total costs Total % n/n-1 1,5% 0,3% 3,8% 0,9% Staff % n/n-1 5,2% 1,7% 1,7% 2,4% Other op. % n/n-1 8,5% -3,9% 1,7% -2,8% 2. Detail by service (in nominal terms) 2.1 Air Traffic Management ,1 2.2 Communication ,0 2.3 Navigation ,7 2.4 Surveillance ,4 2.5 Search and rescue ,0 2.6 Aeronautical Information ,9 Edition 1.0 Released edition page 48 of 95

49 2.7 Meteorological services ,0 2.8 Supervision costs ,0 2.9 Other State costs (Incl ECTL) 2.10 Total costs Total % n/n-1 1,5% 0,3% 3,8% 0,9% ATM % n/n-1 0,3% 0,6% 3,0% 1,4% CNS % n/n-1 1,2% 0,5% 4,9% -0,3% 3. Complementary information on the cost of capital and on the cost of common projects (in nominal terms) Average asset base 3.1 Net book val. fixed assets ,2 230,9 220,5 194,0 3.2 Adjustments total assets Net current assets ,0 77,0 82,8 108,9 3.4 Total asset base Cost of capital % 3.5 Cost of capital pre tax rate 5,3% 6,7% 6,4% 6,7% 6,8% 6,4% 3.6 Return on equity 7,0% 6,4% 7,0% 7,0% 7,0% 7,0% 3.7 Average interest on debts 0,0% 0,0% 0,0% 0,0% 0,0% 0,0% Cost of common projects 3.8 Common Project 1 4. Complementary information on inflation and on total costs in real terms 4.1 Inflation % (1) 2,2% 4,8% 3,7% 2,7% 3,0% 3,0% 0,0% 0,0% 0,0% 0,0% 4.2 Price index - Base 100 in ,2 107,1 111,1 114,1 117,5 103,0 4.3 Total costs real terms (2) Total % n/n-1-3,1% -3,3% 1,0% -2,1% 5. Deduction of costs allocated to exempted VFR flights (in nominal terms) 5.1 Total costs Costs for exempted VFR flights 5.3 Total costs after deduction (3) Costs and asset base items in ' BGN - Service units in ' (1) Forecast inflation used for establishing the determined costs in nominal terms - actual inflation recorded by EUROSTAT (2) Determined costs (performance plan) in real terms - actual costs in real terms - base 100 in 2009 (3) Determined costs (after deduction of VFR costs) reported at line Reporting Table 2 (in nominal terms) Edition 1.0 Released edition page 49 of 95

50 *Forecast data used for the calculation of the corresponding unit rates (i.e. November 2009 data for 2010 F; November 2010 data for 2011 F) Table 1 - Total Costs Charging zone name Bulgaria Period of reference : MET Service provider name BULATSA Forecast Costs* Determined Costs Actual costs Cost details 2010F* 2011F* Detail by nature (in nominal terms) 1.1 Staff 1.2 Other operating costs 1.3 Depreciation 1.4 Cost of capital 1.5 Exceptional items 1.6 Total costs Total % n/n-1 Staff % n/n-1 Other op. % n/n-1 2. Detail by service (in nominal terms) 2.1 Air Traffic Management 2.2 Communication 2.3 Navigation 2.4 Surveillance 2.5 Search and rescue 2.6 Aeronautical Information 2.7 Meteorological services 2.8 Supervision costs 2.9 Other State costs 2.10 Total costs Edition 1.0 Released edition page 50 of 95

51 Total % n/n-1 ATM % n/n-1 CNS % n/n-1 3. Complementary information on the cost of capital and on the cost of common projects (in nominal terms) Average asset base 3.1 Net book val. fixed assets 3.2 Adjustments total assets 3.3 Net current assets 3.4 Total asset base Cost of capital % 3.5 Cost of capital pre tax rate 3.6 Return on equity 3.7 Average interest on debts Cost of common projects 3.8 Common Project 1 4. Complementary information on inflation and on total costs in real terms 4.1 Inflation % (1) 3,0% 0,0% 0,0% 0,0% 0,0% 4.2 Price index - Base 100 in Total costs real terms (2) Total % n/n-1 5. Deduction of costs allocated to exempted VFR flights (in nominal terms) 5.1 Total costs 5.2 Costs for exempted VFR flights 5.3 Total costs after deduction (3) Costs and asset base items in ' BGN - Service units in ' (1) Forecast inflation used for establishing the determined costs in nominal terms - actual inflation recorded by EUROSTAT (2) Determined costs (performance plan) in real terms - actual costs in real terms - base 100 in 2009 (3) Determined costs (after deduction of VFR costs) reported at line Reporting Table 2 (in nominal terms) *Forecast data used for the calculation of the corresponding unit rates (i.e. November 2009 data for 2010 F; November 2010 data for 2011 F) Table 1 - Total Costs Edition 1.0 Released edition page 51 of 95

52 Charging zone name Bulgaria Period of reference : State - NSA NSA Forecast Costs* Determined Costs Actual costs Cost details 2010F* 2011F* Detail by nature (in nominal terms) 1.1 Staff 0,9 1,0 1,0 1.2 Other operating costs (inc. ECTL) 9,2 8,1 9,3 9,4 9,6 9,0 1.3 Depreciation 0,0 0,0 0,0 1.4 Cost of capital 0,0 0,0 0,0 1.5 Exceptional items 1.6 Total costs ,2 10,3 10,6 9 Total % n/n-1 Staff % n/n-1 Other op. % n/n-1 2. Detail by service (in nominal terms) 2.1 Air Traffic Management 2.2 Communication 2.3 Navigation 2.4 Surveillance 2.5 Search and rescue 2.6 Aeronautical Information 2.7 Meteorological services 2.8 Supervision costs 1,5 1,5 1,5 2.9 Other State costs (inc.ectl) 9,2 8,1 8,8 8,8 9,0 9, Total costs ,2 10,3 10,6 9 Total % n/n-1 ATM % n/n-1 CNS % n/n-1 3. Complementary information on the cost of capital and on the cost of common projects (in nominal terms) Average asset base Edition 1.0 Released edition page 52 of 95

53 3.1 Net book val. fixed assets 0,1 0,1 0,0 3.2 Adjustments total assets 0,0 0,0 0,0 3.3 Net current assets 0,0 0,0 0,0 3.4 Total asset base 0,1 0,1 0,0 Cost of capital % 3.5 Cost of capital pre tax rate 7,0% 7,0% 7,0% 3.6 Return on equity 7,0% 7,0% 7,0% 3.7 Average interest on debts 0,0% 0,0% 0,0% Cost of common projects 3.8 Common Project 1 4. Complementary information on inflation and on total costs in real terms 4.1 Inflation % (1) 2,2% 4,8% 3,7% 2,7% 3,0% 3,0% 0,0% 0,0% 0,0% 0,0% 4.2 Price index - Base 100 in ,2 107,1 111,1 114,1 117,5 103,0 4.3 Total costs real terms (2) 9 8 9,2 9,1 9,0 9 Total % n/n-1-15,4% 21,4% -1,7% -0,6% 5. Deduction of costs allocated to exempted VFR flights (in nominal terms) 5.1 Total costs ,0 5.2 Costs for exempted VFR flights 5.3 Total costs after deduction (3) Costs and asset base items in ' BGN - Service units in ' (1) Forecast inflation used for establishing the determined costs in nominal terms - actual inflation recorded by EUROSTAT (2) Determined costs (performance plan) in real terms - actual costs in real terms - base 100 in 2009 (3) Determined costs (after deduction of VFR costs) reported at line Reporting Table 2 (in nominal terms) *Forecast data used for the calculation of the corresponding unit rates (i.e. November 2009 data for 2010 F; November 2010 data for 2011 F) Table 2 - Unit rate calculation Charging zone name : Bulgaria Period of reference : Consolidation - all entities Unit rate calculation Edition 1.0 Released edition page 53 of 95

54 1. Determined costs in nominal terms and inflation adjustment 1.1 Determined costs in nominal terms - VFR excl. - Table Actual inflation rate - Table Forecast inflation rate - Table 1 2,2% 4,8% 3,7% 2,7% 3,0% 1.4 Inflation adjustment - Article : year n amount to be carried over 2. Forecast and actual total service units 2.1 Forecast total service units (performance plan) 1,8 1,8 1,9 2,0 2,0 2.2 Actual total service units 1,8 2.3 Actual / forecast total service units (in%) 3. Costs subject to traffic risk sharing (ANSP) 3.1 Determined costs in nominal terms - VFR excl. (reported from Table 1) Inflation adjustment - Article : amount carried over to year n 3.3 Traffic - Article : amounts carried over to year n 3.4 Traffic risk sharing - Article : add. revenue carried over to year n 3.5 Traffic risk sharing - Article 1.4.2: revenues losses carried over to year n 3.6 Uncontrollable costs - Article : amounts carried over to year n 3.7 Bonus or penalty for performance - Article Over(-) or under(+) recoveries (1): amounts carried over to year n Total for the calculation of year n unit rate Traffic risk sharing - Article : add. rev. year n to be carried-over 3.11 Traffic risk sharing - Article : revenue loss year n to be carried-over Parameters for traffic risk sharing 3.12 % additional revenue returned to users in year n+2 - Article % 70% 70% 3.13 % loss of revenue borne by airspace users - Article % 70% 70% 4. Costs not subject to traffic risk sharing - Article 11a (2) 4.1 Determined costs in nominal terms - VFR excl. (Table 1) Inflation adjustment - Article : amount carried over to year n 4.3 Traffic - Article : amounts carried over to year n 4.4 Uncontrollable costs - Article : amounts carried over to year n Edition 1.0 Released edition page 54 of 95

55 4.5 Over(-) or under(+) recoveries (1): amounts carried over to year n Total for the calculation of year n unit rate Other revenues - applied unit rate (in national currency) 5.1 Revenues from other sources - Article 1.3 0, Grand total for the calculation of year n unit rate Year n unit rate (in national currency) 83,68 77,46 73,59 85,08 84, ANSP component of the unit rate 78,50 72,90 68,31 79,86 78, MET component of the unit rate 0,00 0,00 0,00 0,00 0, NSA-State component of the unit rate 5,18 4,56 5,28 5,23 5, Year n unit rate that would have applied without other revenues 83,68 77,46 73,59 85,08 84,19 Costs, revenues and other amounts in ' BGN - Service units in ' (1) Over/under recoveries incurred up to the year of entry into force of the determined cost method Table 2 - Unit rate calculation Charging zone name : Bulgaria Period of reference : ANSP Name: BULATSA Unit rate calculation Determined costs in nominal terms and inflation adjustment 1.1 Determined costs in nominal terms - VFR excl. - Table Actual inflation rate - Table Forecast inflation rate - Table 1 2,2% 4,8% 3,7% 2,7% 3,0% 1.4 Inflation adjustment - Article : year n amount to be carried over 2. Forecast and actual total service units 2.1 Forecast total service units (performance plan) 1,8 1,8 1,9 2,0 2,0 Edition 1.0 Released edition page 55 of 95

56 2.2 Actual total service units 2.3 Actual / forecast total service units (in %) 3. Costs subject to traffic risk sharing (ANSP) 3.1 Determined costs in nominal terms - VFR excl. (reported from Table 1) Inflation adjustment - Article : amount carried over to year n 3.3 Traffic - Article : amounts carried over to year n 3.4 Traffic risk sharing - Article : add. revenue carried over to year n 3.5 Traffic risk sharing - Article 1.4.2: revenues losses carried over to year n 3.6 Uncontrollable costs - Article : amounts carried over to year n 3.7 Bonus or penalty for performance - Article Over(-) or under(+) recoveries (1): amounts carried over to year n Total for the calculation of year n unit rate Traffic risk sharing - Article : add. rev. year n to be carried-over 3.11 Traffic risk sharing - Article : revenue loss year n to be carried-over Parameters for traffic risk sharing 3.12 % additional revenue returned to users in year n+2 - Article % 70% 70% 3.13 % loss of revenue borne by airspace users - Article % 70% 70% 4. Costs not subject to traffic risk sharing - Article 11a (2) 4.1 Determined costs in nominal terms - VFR excl. (Table 1) 4.2 Inflation adjustment - Article : amount carried over to year n 4.3 Traffic - Article : amounts carried over to year n 4.4 Uncontrollable costs - Article : amounts carried over to year n 4.5 Over(-) or under(+) recoveries (1) : amounts carried over to year n 4.6 Total for the calculation of year n unit rate 5. Other revenues - applied unit rate (in national currency) 5.1 Revenues from other sources - Article Grand total for the calculation of year n unit rate Year n unit rate (in national currency) 78,50 72,90 68,31 79,86 78, ANSP component of the unit rate 5.5 MET component of the unit rate Edition 1.0 Released edition page 56 of 95

57 5.6 NSA-State component of the unit rate 5.7 Year n unit rate that would have applied without other revenues 78,50 72,90 68,31 79,86 78,95 Costs, revenues and other amounts in ' BGN - Service units in ' (1) Over/under recoveries incurred up to the year of entry into force of the determined cost method Table 2 - Unit rate calculation Charging zone name : Bulgaria Period of reference : MET Service provider name : BULATSA Unit rate calculation Determined costs in nominal terms and inflation adjustment 1.1 Determined costs in nominal terms - VFR excl. - Table Actual inflation rate - Table Forecast inflation rate - Table 1 2,2% 4,8% 3,7% 2,7% 3,0% 1.4 Inflation adjustment - Article : year n amount to be carried over 2. Forecast and actual total service units 2.1 Forecast total service units (performance plan) 1,8 1,8 1,9 2,0 2,0 2.2 Actual total service units 2.3 Actual / forecast total service units (in%) 3. Costs subject to traffic risk sharing (ANSP) 3.1 Determined costs in nominal terms - VFR excl. (reported from Table 1) 3.2 Inflation adjustment - Article : amount carried over to year n 3.3 Traffic - Article : amounts carried over to year n 3.4 Traffic risk sharing - Article : add. revenue carried over to year n 3.5 Traffic risk sharing - Article 1.4.2: revenues losses carried over to year n 3.6 Uncontrollable costs - Article : amounts carried over to year n Edition 1.0 Released edition page 57 of 95

58 3.7 Bonus or penalty for performance - Article Over(-) or under(+) recoveries (1) : amounts carried over to year n 3.9 Total for the calculation of year n unit rate 3.10 Traffic risk sharing - Article : add. rev. year n to be carried-over 3.11 Traffic risk sharing - Article : revenue loss year n to be carried-over Parameters for traffic risk sharing 3.12 % additional revenue returned to users in year n+2 - Article % loss of revenue borne by airspace users - Article Costs not subject to traffic risk sharing - Article 11a (2) 4.1 Determined costs in nominal terms - VFR excl. (Table 1) Inflation adjustment - Article : amount carried over to year n 4.3 Traffic - Article : amounts carried over to year n 4.4 Uncontrollable costs - Article : amounts carried over to year n 4.5 Over(-) or under(+) recoveries (1): amounts carried over to year n Total for the calculation of year n unit rate Other revenues - applied unit rate (in national currency) 5.1 Revenues from other sources - Article Grand total for the calculation of year n unit rate Year n unit rate (in national currency) 0,00 0,00 0,00 0,00 0, ANSP component of the unit rate 5.5 MET component of the unit rate 5.6 NSA-State component of the unit rate 5.7 Year n unit rate that would have applied without other revenues 0,00 0,00 0,00 0,00 0,00 Costs, revenues and other amounts in ' BGN - Service units in ' (1) Over/under recoveries incurred up to the year of entry into force of the determined cost method Edition 1.0 Released edition page 58 of 95

59 ANNEX B. Extracts from BULATSA (Bulgarian ANSP) Business Plan I. Mission, Vision and Strategic Goals of BULATSA Mission Provision of quality air navigation services (ANS) for reliable and efficient management of ANS, while maintaining the highest levels of safety and mitigating the environmental impact. Vision A competitive enterprise which copes successfully with the challenges of the new realities and is viable in the ANS provision business. A leading ANSP in South- Eastern Europe. Strategic Goals of BULATSA - Main Goals in the Period Maintaining and/or increasing BULATSA s market share in ANS on a regional scale. Acknowledgement of BULATSA s key role in the provision of ANS in South-Eastern Europe. II. BULATSA Functions and Management The Bulgarian State Enterprise Air Traffic Services Authority (BULATSA) is a legal entity which holds a certificate for the provision of air navigation services and fulfils State functions for the provision of ANS in the controlled civil airspace of the Republic of Bulgaria. BULATSA s main spheres of activity include: 1. Air traffic management aimed at achieving safety, efficiency and regularity of flights in the controlled civil airspace; 2. Planning, provision, implementation, operation and maintenance of facilities, systems and equipment to ensure the communications, navigation, surveillance, power-supply, lighting 14, meteorological and aeronautical aspects of the serviced air traffic and its supporting infrastructure; 3. Provision of communications, navigation and surveillance services; 4. Provision of meteorological services; 5. Provision of aeronautical information services; 6. Provision of metrological services; 7. Provision of information services for aircraft search and rescue operations; 8. Management of the air traffic safety system within its assigned powers; 9. Fulfilment of the obligations of the Republic of Bulgaria ensuing from international agreements in the ATM area, to which the Republic of Bulgaria is a signatory state; 14 To be removed from the spheres of activities, subject to the provisions of the Civil Aviation Act Edition 1.0 Released edition page 59 of 95

60 10. Collection of air navigation charges for the provision of air navigation services. The operational management of BULATSA is based on a system of management through objectives, by defining, reporting and supervising the activities accomplished by the separate territorially and/or functionally separated units of the enterprise. III. The Acceptable Safety Levels Acceptable levels of safety (ALS) set by DG CAA (AI per 100,000 flights) Aviation incident 2011 г г г г. AA (Accident) A (Serious incident) + B (Major incident) C (Incident) BULATSA planned safety levels (AI per 100,000 flights) AA (Accident) A (Serious incident) + B (Major incident) C (Incident) ALS defined by statistical analysis of row data by means of Poisson distribution. IV. Objectives of BULATSA Business Plan : Maintaining and enhancing the safety levels of air navigation services (ANS); Reducing the environmental impact; Attaining and maintaining the average European levels of EUR 380 for a composite controlled hour; Achieving high quality and efficiency of air navigation service provision; Optimum capacity in line with the STATFOR forecasts, corresponding to the actual numbers of the handled aircraft; Provision of ANS within the DANUBE FAB; Maintaining the certification of BULATSA as air navigation service provider in accordance with the requirements of Commission Regulation (EC) N 2096/2005, the ICAO Regional Plan and EUROCONTROL; Assertion of BULATSA as a competitive air navigation service provider beyond the boundaries of Bulgarian airspace; Edition 1.0 Released edition page 60 of 95

61 Increasing the flexibility of the provision of air navigation services in proportion to traffic quantities and direction; Fulfilment of the activities for the establishment of DANUBE FAB; Reorientation of ANS provision to the needs of airspace users in the framework of DANUBE FAB; Creation of a financial and legal mechanism to facilitate the increase and diversification of receipts from other activities; Preservation of the financial stability of the organisation; Decreasing the support cost ratio in terms of the framework developed by the Performance Review Commission (PRC): Optimisation of the unit cost value through flexible human resources management and enhanced efficiency of technical aids; Optimisation of cost efficiency indicators and personnel productivity for the period The Business Plan is aimed at achieving an optimal balance between efficiency in ensuring the tools necessary to attain these objectives and appropriate control of risk throughout the execution of the organisation s activities. The Plan is an open document subject to an annual update. I. Main activities by domain aimed at the achievement of the objectives of the Business Plan The achievement of BULATSA s objectives at the strategic level and the tactical objectives of the Business Plan is based on the realization of specific activities and projects in the various domains, as follows: Activities in the domain of Safety and Quality: Establishment and application by BULATSA of a Safety Culture for operational and technical staff; Elaboration in the framework of DANUBE FAB of a programme for mutual actions aimed at enhancing the safety and quality of the provided air navigation services; Ensuring and maintaining a high safety level through the development and optimization of the Safety Management System (SMS); Continuous development and optimisation of prevention in the safety area; Harmonisation of the internal normative framework for safety management with the regulatory framework of the European Union and EUROCONTROL, with an emphasis on the transparency of the incident reporting system; Enhancement of the incident information exchange system in the framework of DANUBE FAB, at the regional level and in exchanges with EUROCONTROL, for the purpose of disseminating the lessons learnt; Edition 1.0 Released edition page 61 of 95

62 Development of a joint programme with Romania to safeguard against judicial penal sanctions, under certain conditions and established procedure, for participants in safety-related events who have reported them voluntarily. Application of a benchmarking framework for the assessment of the maturity of the Quality Management System and the results of BULATSA activities in order to make comparisons with other ANSPs; Integration of the SMS with the remaining management and control systems in BULATSA; Regular consultation meetings with representatives of customers and other stakeholders to establish the degree of satisfaction with the service and collect users recommendations on how to improve the activity; Alignment of the documentation of BULATSA and ROMATSA Quality Management Systems and participation in joint activities in the framework of the DANUBE FAB Project. Operations: Implementation of web-based services for airspace users, such as flight planning services (FPL) and meteorological services for air navigation (AMS), with a view to optimize these types of services; Implementation of integrated pre-flight briefing, comprising flight plans and related messages, meteorological information and a pre-flight bulletin, and centralization of meteorological and aeronautical information services; Optimisation of the provision of services in the controlled areas and terminal zones, for the purpose of reducing direct operational cost and strategic indirect cost; Avoidance of ATM-related delays combined with a trend towards providing the necessary capacity at the optimal price; Optimisation of the application of the Flexible Use of Airspace concept. Extension of the scope of the Customer Relations Management Programme; Decreasing the environmental impact through route network optimization and the introduction of Continuous Descent Approach (CDA); Increasing the capacity of the controlled area of Sofia Airport Tower during the period (implementation of CDM and A- SMGCS); Implementation of RNAV in airport controlled areas and terminal zones during the period ; Implementation of a unified transitional altitude in the controlled airspace of the Republic of Bulgaria; Edition 1.0 Released edition page 62 of 95

63 Optimisation of activities relating to the provision of terminal aerodrome forecasts (TAF) at the Sofia Airport Meteorological Office as of 2014; Full migration of BULATSA to the European AIS database (EAD) as of 2011; Harmonisation of operational procedures in the framework of the joint BULATSA-ROMATSA initiative the DANUBE FAB Project; Optimisation of route network, sectorisation, sector configuration and capacity in the framework of the joint BULATSA-ROMATSA initiative the DANUBE FAB Project; Establishment of an ATS unit for the control of surface movement at Sofia Airport Tower; Equipping the BULATSA Training Centre with a complete system for ATCO ab-initio training; Extending the capacity of Sofia Area Control Centre. Technical and Engineering Activities: Development, endorsement and realization of a project aimed at achieving full interoperability (at the end of the reference period) between the technical infrastructure of the Bulgarian and Romanian ATM Systems in the framework of DANUBE FAB; Coordinated planning with Romania of future technical provision in the framework of DANUBE FAB in conformity with the ICAO Regional Plan, ESSIP and the SESAR Programme; Planning of technical provision in conformity with the ICAO Regional Plan and ESSIP (the SESAR Programme); Achievement of the necessary level of interoperability of the technical infrastructure and the ATM System with those of neighbouring states. Financial and Economic Activities: Ensuring the financial stability of BULATSA. Following a reasonable cost policy in the conditions of a world financial crisis; Performing the necessary preparatory work (including legislative work) to establish the cost base and the en-route unit rate in the framework of DANUBE FAB; Aligning the level of air navigation charges in the terminal airport areas as at Preparation of a proposal for modifications in the legal and normative framework to the Ministry of Finance and the Ministry of Transport, Information Technology and Communications with the relevant justifications, with a view to introducing charges for training flights flying under VFR on departing from, landing in or crossing the controlled zones; Active interaction with other BULATSA domains for the purpose of increasing the cost efficiency and the competitiveness of the Edition 1.0 Released edition page 63 of 95

64 organisation, as basic prerequisites for BULATSA s key role as an ANSP in Eastern Europe in the near future. Administration and Human Resources: Establishment and development of the BULATSA automated management system of administrative processes. Improvement of communications between the organisation s management and employees through the application of a set of methods measuring staff involvement in the work process and the introduction of a procedure measuring the degree of job satisfaction and the motivation of the personnel. In view of the anticipated modifications to the environment in which BULATSA is to perform its activities, human resources management policies will be aimed at: Flexible utilization of resources and outsourcing of certain activities, where appropriate; Optimisation of the organizational structure and the distribution of activities within the organization; Implementation of an up-to-date assessment system of the work contribution of employees, connected with remuneration practices; Unification and automation of activities related to human resources management through the establishment and implementation of an automated information system for human resources management. II. Major investment projects in Business Plan : Construction of a new Air Traffic Control Tower at Sofia Airport; Replacement of the primary and secondary radars (for Mode S operation) in at Sofia airport; Replacement of the primary and secondary en-route radars; Implementation of a Surface Movement Guidance and Control System (A-SMGCS) at Sofia Airport; Implementation of an Automatic Dependent Surveillance Broadcast (ADS-B) System; Implementation of a Wide Area Multilateration (WAM) System for Sofia Approach; Implementation of surface navigation infrastructure (DME-DME) for the provision of RNAV procedures; Delivery of VHF radio equipment with 8,33 khz channel spacing for air-ground communications; Edition 1.0 Released edition page 64 of 95

65 Implementation of an Automated Message Handling System (AMHS); ; Launching into operation of the LINUX software platform as a main system of the SATCAS automated ATM System and the UNIX software platform as a back-up system; Upgrade of the automated SATCAS ATM System, with a view to supplementing it with new functionalities and/or modifying the algorithm of existing functionalities to align them with the requirements of European legislation, and/or processing the surveillance information from new sensors. Upgrade of the weather radars. III. Priorities of the long-term investment programme ATM Upgrade of the automated ATM System; Construction of a new Air Traffic Control Tower at Sofia Airport; Optimisation of the capacity and the provision of services in the controlled terminal areas; Establishment of a new working position for the control of surface movement at Sofia Airport Tower in the period ; Full migration of BUILATSA to the European AIS database (EAD) in the period ; Implementation of integrated automated pre-flight briefing; Transfer of approach control from Burgas and Varna APP/TWR Centres to Sofia ACC. Communications VHF equipment for air-ground radio communications step-by-step replacement of the equipment in order to introduce 8,33 khz channel spacing for air-ground communications and install new frequencies; Aeronautical, Telecommunications and Information Network (ANTIM), designed on the basis of multiplex devices (SAGEM FMX12) and Asynchronous Transfer Mode (ATM) commutators LUCENT PSAX 1000/1250/2300 and CISCO 3661/3845 ensuring the transfer of voice and data; BULATSA Microwave Network planned extension between Varna and Burgas APP/TWR Centres via the Emona site; AFTN/CIDIN Centre extension of the functionalities and the equipment of the Sofia ACC AFTN/CIDIN Centre to create AMHS connectivity with neighbouring states, in accordance with ICAO requirements. Edition 1.0 Released edition page 65 of 95

66 Navigation and MET Equipment Radio Navigation Equipment; Automated Weather Observation Systems. Surveillance and Radar Data and Flight Data Processing En-route radar sites located at Cherni Vrah and Varbitsa. TMA radar sites located at the airports of Sofia; Implementation of a Surface Movement Guidance and Control System (A-SMGCS) at Sofia Airport; Implementation of Automatic Dependent Surveillance Broadcast (ADS-B) and Wide Area Multilateration (WAM) technology. IT During the period a step-by-step replacement is planned of the devices comprising the operational and administrative information systems in Sofia, Varna and Burgas consisting of specialized computer systems and configurations (servers, computers, monitors, racks, routers, commutators, printers, etc.). IV. The Single European Sky Initiative of the European Commission For the purpose of supporting the EU Member States in the execution of their obligations ensuing from the measures provided for in the legislation packages on SES I and SES II, the following regulations of the European Commission, Council and Parliament were adopted in 2010: Commission Regulation (EU) No 73/2010 of 26 January 2010 laying down requirements on the quality of aeronautical data and aeronautical information for the single European sky, OJ L 23, , p.6; Commission Regulation (EU) No 255/2010 of 25 March 2010 laying down common rules on air traffic flow management; Commission Regulation (EU) No 691/2010 of 29 July 2010 laying down a performance scheme for air navigation services and network functions and amending Regulation (EC) No 2096/2005 laying down common requirements for the provision of air navigation services; Edition 1.0 Released edition page 66 of 95

67 Commission Regulation (EU) No 929/2010 of 18 October 2010 amending Regulation (EC) No 1033/2006 as regards the ICAO provisions referred to in Article 3(1); Regulation (EU) No 996/2010 of the European Parliament and of the Council of 20 October 2010 on the investigation and prevention of accidents and incidents in civil aviation and repealing Directive 94/56/EU; Commission Regulation (EU) No 1191/2010 of 16 December 2010 amending Regulation (EC) No 1794/2006 laying down a common charging scheme for air navigation services. V. Development of the Initiative for the Establishment of a Functional Airspace Block (FAB) DANUBE FAB The Project for the establishment of a Functional Airspace Block in the airspace of the Republic of Bulgaria and in the airspace of Romania (DUNUBE FAB) is a key project in the activity of the enterprise. The project activities were carried out in accordance with the time frame stipulated in European legislation and Decision С (2009) 6822 of the European Commission dated 11 September 2009 granting Community financial aid to projects of common interest, thus allocating financial support to Phase 1 (Stage 2), Phase 2 and Phase 3 of the DUNUBE FAB Project under the TEN-T programme. Three documents of paramount importance to the development of the project, at State, NSA and ANSP level, were signed in On 26 February 2010, the Minister of Transport, Information Technology and Communications of the Republic of Bulgaria Mr. Alexandar Tsvetkov and the Minister of Transport and Infrastructure of Romania Mr. Radu Mircea Berceanu signed a Memorandum of Understanding on cooperation in Air Navigation Services provision matters and for the establishment of a Functional Airspace Block, comprising the national airspace of the Republic of Bulgaria, the national airspace of Romania and the airspace included in the scope of the international legal obligations of the Republic of Bulgaria and Romania (DANUBE FAB). Ensuing from the provisions of the above Memorandum two more documents were signed: Memorandum of Understanding between the air navigation service providers (ANSPs) of the two states (BULATSA and ROMATSA) on 10 August 2010, in Bucharest, Romania. Memorandum of Understanding between the national supervisory authorities (NSAs) of the two States on 19 October 2010, in Veliko Tarnovo, Bulgaria. Edition 1.0 Released edition page 67 of 95

68 The concluded memoranda are the basic elements of the common documents ensuring the establishment of the DANUBE FAB by the deadline for FAB establishment 4 December 2012, set by the European Parliament and the Council. The two states are committed to take steps towards harmonising of rules and procedures for air navigation services in the airspace of Bulgaria and Romania to further improve safety, efficiency and capacity and to mitigate environmental impact. A project management structure was established comprising: The Steering Committee (SC) with representatives of the Ministry of Transport, Information Technology and Communications (MTITC), the Directorate General Civil Aviation Administration (CAA), the Ministry of Defence and the ANSPs of both states. The Project Management Office (PMO); Six joint Bulgarian-Romanian Work Groups: Operational and Civil/Military Coordination WG, Technical WG, Legal, Regulatory & Procurement WG, Financial, Economic & Budgeting WG, Safety, Quality, Security & Environment WG, and Human Resources WG. Two DANUBE FAB Steering Committee meetings were held during the accounting period: the first one on 28 July 2010 in Bucharest and the second one on 19 October 2010 in Veliko Tarnovo, Bulgaria. A number of meetings were also organized at project management and work group level. BULATSA experts took an active part in the preparation and conclusion of a trilateral agreement between BULATSA and ROMATSA, on the one hand, and EUROCONTROL, on the other, relating to the provision by EUROCONTROL of support to the DANUBE FAB Project in the following six main areas: real-time simulation, target system architecture in the context of the ATM Master Plan, development of DANUBE FAB Safety, ground-ground and air-ground data link infrastructure, legal/institutional aspects of the DANUBE FAB from the ANSP perspective, and expert support for a study on the environmental impact of the DANUBE FAB. In the framework of the agreement, the specific preparatory activities for real-time simulation of air traffic using the new route network have already started. The aim is to validate and compare different airspace scenarios and modifications to the airspace of the Republic of Bulgaria and Romania prior to implementation. Edition 1.0 Released edition page 68 of 95

69 The Project s web-page ( started operating in April 2010 and it is regularly updated with news and topical information material on the development of the Project. In order to obtain feedback from stakeholders and promote publicity and project awareness, two DANUBE FAB Social Consultation Forum meetings were organized with the participation of representatives from both ANSPs and representatives of all trade union and professional organizations in ROMATSA and BULATSA. There is an ongoing process on the preparation of a draft International Agreement on the establishment of the DANUBE FAB. The work is being carried out by an extended Bulgarian-Romanian Work Group on legal, regulatory and procurement issues with representation from the MTITC, the CAA, the Ministry of Defence and the Ministry of Foreign Affairs. In parallel with the ongoing project activities BULATSA representatives participated actively in the preparation of the Project s Strategic Action Plan (SAP) and the Action Status Report (ASR) required under EC Decision С (2009) 6822 granting Community financial aid to the DANUBE FAB Project under the multi-annual TEN-T work programme, as well as in the preparation of the Consolidated Report on Phase 2 Preliminary Design ( ) completion. On 19 March 2010 an Operational Agreement was signed between BULATSA and the MTITC (ref. No C-3/ ) with regard to the provision of the accountability required in the management of the funds granted by the Community under the TEN-T work programme, and the general responsibility for the execution of the DANUBE FAB (Phase 1/Stage 2, Phase 2 and Phase 3) Project co-funded under the multi-annual TEN-T work programme of the European Union. The main milestones of the DANUBE FAB Project are as follows: Completion of the DANUBE FAB Project in the framework of the defined phases: Phase 2 Preliminary Design (2011). Negotiations will be held on legal, regulatory and financial issues. The following are to be prepared during this phase: a detailed implementation plan, cooperation structure, consensus on legal and financial matters, decisions regarding interoperability with neighbouring states. Phase 3 Detailed Design and Preliminary Implementation ( ). The legal and legislative activities are to be finalized during this stage and a Common Entity is to be set up, staffed with the necessary personnel. Airspace organization will be modified, the working procedures and the interoperability mechanism will be coordinated, solutions will be sought to legal, financial and social issues. Phase 4 FAB Implementation (step by step) Edition 1.0 Released edition page 69 of 95

70 Implementation of the Flexible Use of Airspace (FUA) concept. Establishment of a mechanism for consultations with airspace users on a regular basis for the purpose of aligning the service with users requirements. Edition 1.0 Released edition page 70 of 95

71 ANNEX C. Main BULATSA investments benefits and contribution to KPA Capital expenditu re 1. New Enroute PSR and Mode S SSR Safety Capacity Cost efficiency PSR - Provide safety tracking of independent non-cooperative tracks within the Bulgarian sovereign airspace above FL 095. CANSO position June 2010 there is still a requirement for Independent Non-Cooperative surveillance as long as unacceptable risks exist from aircraft (GAT, MIL) operating without transponders. PSR remains the system of choice for the identification of unknown or unlawful intrusions into sovereign or territorial airspace. The ATM Surveillance Strategy for ECAC v Independent Non-cooperative surveillance to track noncooperative (no transponder) targets in En-Route and TMA airspace where and when required. This will be provided by Primary Surveillance Radar (PSR) unless and until an alternative solution is available. Backup in case of jamming or unlawful interference of 1090 frequency (ADS-B, WAM, Mode-S). Increased Target Capacity. Ensure ACC 5 NM separation radar coverage. Lower maintenance costs and distant maintenance, better serviceability. Environment Shortest route design enabled by sufficient radar coverage. European ATM Master Plan (OI, OIs, enablers reference) OI:L08 OIs: CM-0801 Enabler: CTE-S5 Related SES IR / Communi ty Specificati ons. CR 262/2009 ESSIP SUR02 SUR04 Mode S SSR- Avoid unambiguous AircraftIdentification (eliminate garbling). Improved Integrity of Surveillance Data. Improved Air Picture and Tracking. Alleviation of Mode 3/A Code Shortage. Safety Enhancements. Edition 1.0 Released edition page 71 of 95

72 2. SATCAS upgrade Enable Mode S with avoided unambiguous aircraft identification, improved integrity of surveillance data, improved air picture and tracking alleviation of Mode 3/A code shortage and safety enhancements Enables fall back mode with complete reservation of operative ATC system with backup ATC system. Efficient use of codes and removing code conflicts. Enable ICAO Flight Planning modifications for 2012 allowing improved traffic and flow management processes and procedures enhancing overall network capacity. No worsening of the KPA due SATCAS s renewing cycle and legislation requirements. various OI:L08 OIs: CM-0801 Enablers: CTE-S5 CR 633/2007 SUR02 SUR04 3. New Sofia Tower Investigation into a serious incident from recommended to CAA and ANSP to ensure condition for execution of ATC technology at Sofia airport taking into account the new airport infrastructure. Under this safety recommendation ANSP started a procedure for a building a new Sofia tower. This process in ongoing and planned to be implemented during RP1.Investigation into a serious Incident from at Sofia Airport recommended the evaluation and analysis for the establishment of ground control at LBSF. This recommendation is still pending and will be implemented during RP1. Full visual contact within whole maneuvering area with visual ground conflicts detection. Decreased serious incident probability to 1 per 7 years, as recommendation of AIB (MTITC) Better capacity with visual contact and optimized use of mainly utilized holding point H and RWY 27. Less gases emissions and noise pollution due optimized taxi and holding points time. 4. New TMA PSR & MODE S SSR PSR - Provide safety tracking of independent non-cooperative tracks or aircrafts experiencing avionics failure. Radar data included in Multi radar tracking, ensuring sufficient Less maintenance cost, distant control, better serviceability. No worsening of the KPA Shortest Departure and arrival routes enabled by sufficient radar coverage. OI:L08 OIs: CM-0801 CR 262/2009 SUR01 Edition 1.0 Released edition page 72 of 95

73 Mode S SSR- Avoid unambiguous Aircraft Identification (eliminate garbling) Improved Integrity of Surveillance DataImproved Air Picture and Tracking Alleviation of Mode 3/A Code Shortage Safety Enhancements. radar coverage for ACC 5 NM and TMA 3.2 NM radar separation. Increased Target Capacity. due systems life cycle. Enabler: CTE-S5 5. A- SMGCS 6. ADS-B en-route approach WAM 7. DME- DME 8. VOR DME Replacing the old ground surveillance radar, improving safety of operations in Sofia airport with surface conflict detection and alerting on runways and the whole maneuvering area. Double decrease of new Sofia tower serious incident probability. Better tracking, redundancy of the surveillance sources and better safety nets while reducing significantly the probability of false code-call sign correlation. Improved surveillance coverage in the areas restricted by terrain and other obstacles. WAM for Sofia TMA will compensate the absence of duplicated SSR coverage, needed for 3.2 NM separation below 7000 feet. Support PBN RNAV. Backup to future GNSS is consistent with SESAR with increased situational awareness reduction of workload during RNAV operations. Support PBN RNAV. Backup to future GNSSis consistent with SESAR with increased situational awareness reduction of workload during RNAV operations. Improves ground capacity during low visibility. Double surveillance coverage with preservation of the separation minima in case of fault or during the scheduled maintenance hours of the radars/sensors. Support PBN RNAV and more efficient use of airspace. DME s will support PBN RNAV and more efficient use of airspace. Two times greater economical benefits to costs due less delays on ground and final approach, flight efficiency and safety Double surveillance coverage with less technological and stuff expenses. Reduced needs to maintain sensor-specific routes and procedures, and their associated costs. The replacement of the expired co-allocated VORs and DMEs, which will be maintained until 2020 at least (according the ICAO's Performance Less gases emissions and noise pollution due optimized taxi and holding points time and weather delay. Shortest route design enabled by sufficient radar coverage. Improved route network design Optimized RNAV arrival and departure procedures Improved route network design. Optimized RNAV arrival and departure procedures. OI:L10 OIs: AO OIs: AUO-0402 Enablers: CTE-S5 CTE-S1 OI:L02-05 OIs: AOM-0601 AOM-0602 OI:L02-05 OIs: AOM-0601 AOM /C330/ 02 Draft Regulation of Performanc e and Interoperab ility of Surveillanc e SUR05 SURd1 NAV03 NAV03 Edition 1.0 Released edition page 73 of 95

74 9. New UHF 10. National radio relay network 11. AFTN/CI DIN- AMHS Back-up assignments and avoiding interferences. Communication and conflict resolution with non 8.33 khz equipped state aircraft. Backup communication, surveillance, AIS/MET data. Harmonized set of safety requirements. Availability of additional sectors for optimized sector configuration. Based Navigation Concept and Application and NAVAID infrastructure strategy for the ECAC AREA up to 2020) will ensure RNAV 5 with Less maintenance cost, distant control, better serviceability. No worsening of the KPA due systems life cycle. RNAV will reduce needs to maintain sensorspecific routes and procedures, and their associated costs. Less maintenance cost, better serviceability. No worsening of the KPA. Replacement need due systems life cycle end. Reduced costs of messaging services and support various f message formats and exchange of new binary data and use of X.400 based COTS products. OIs: AOM-0804 AOM-0803 Enabler: CTE-C5 OIs: IS-0204 IS-0702 Enabler: CTE-C10 OI:L01-01 OIs: IS-0204 IS-0702 Enabler: CR 1265/ /C 323/ /C18/1 6 ITY- AGVCS COM05 COM05 COM10 Edition 1.0 Released edition page 74 of 95

75 CTE-C VDL- Mode 2 CPDLC Major safety enhancement and reduced communication errors and fatigue - standard and unambiguous messages, provision of a communications back up and immediate message retrieval. 13. IT Normal operations of ATM systems. 14.Meteo Radars Better precision and more actual meteo information trough faster information update. Less time for routine communication and reduction of voice congestion, focus on abnormal or non routine situations and increase in the controller efficiency. Situational awareness of actual meteo conditions enabling optimized sector configurations and arrival and departure routes. Capacity increase, sector productivity increase and delay cost savings. Lower staff cost, en-route cost savings and reduction of delays. Less maintenance cost, better serviceability. No worsening of the KPA. Replacement need according systems life cycle. Life cycle extension with more than 10 years- No worsening of the KPA. OI:L05 OIs: AUO CR 29/2009 ITY- AGDL Edition 1.0 Released edition page 75 of 95

76 ANNEX D. Extracts from BULATSA Safety Programme Introduction The state- enterprise Bulgarian Air Traffic Services Authority (BULATSA) defines air traffic safety as top priority objective in performing its main business operations. In order to attain this objective, and in compliance with the provisions of Art. 53, Para 2, Item 1 of the Civil Aviation Act (CAA), in relation to Art. 21 of Regulation No. 13 of the Ministry of Transport for the investigation of aircraft incidents, BULATSA has developed the Program for prevention of aviation incidents at BULATSA, which describes the required actions and stages for increasing air traffic services (ATS) safety. This program is implemented by the Safety Management System (SMS). The implementation of this program aims to guarantee a preventive approach to achieving, assuring, and maintaining a high safety level. 1. The Prevention program and improving SMS efficiency The program covers the complete ATS process and includes measures and activities dedicated to the comprehensive ATS system (Personnel Procedures Technical equipment). The program has been developed by applying the best European practices Main groups of occurrences, included in the Prevention program Deviation from standard airport departure and approach schemes These are occurrences, during which the aircraft crew deviates from the preset departure and approach scheme. We plan to reduce the occurrences of this type by the following actions: Identification of the hot points or sectors of the standard schemes with frequent deviations from the preset parameters and elevation limits. Visualization of the hot points. Drafting a prospectus or a map with the hot points indicated along with short descriptions of the respective aircraft deviations. Edition 1.0 Released edition page 76 of 95

77 Distribution of the prospectus to airline operators, performing flights to the respective airports Failure to attain or deviation of the aircraft crew from the flight level specified by air traffic controllers (level bust) These are occurrences, during which the aircraft crew fails to attain or deviates by more than 300 feet from the preset flight level. We plan to reduce the occurrences of this type by the following actions: Reducing the number of occurrences related to problems with communications by reviewing the technical communications equipment; Reducing the probability of errors in issuing permits by the air traffic controllers. Review of the compliance by air traffic controllers with ATM procedures and the use of the relevant phraseology for transferring control of the aircraft; Application of the EUROCONTROL action plan for level bust prevention. Familiarizing air traffic controllers with MTO phenomena, which may lead to an abrupt deviation from the preset flight level. Optimization of the safety assurance tool, namely the Level Bust alert function (a component of ATC Tools) of the automated ATM system SATCAS, software version Unauthorized incursion of aircraft in a section of the airspace without an explicit permission (Airspace infringement) We plan to reduce the occurrences of this type by the following actions: influence of the complexity of the route network on the frequency and the number of occurrences of this type; Identification of the hot spots (areas with a higher frequency of such occurrences) and initiating a campaign addressed at air traffic controllers, aircraft crews and military users of the airspace to make these hot points known; Reducing the complexity of the boundaries and optimization of the airspace, taking into account potential and possible violators; Application of the EUROCONTROL action plan for airspace infringement prevention. Edition 1.0 Released edition page 77 of 95

78 Violation of the protected runway zone (runway incursion) Each occurrence at the airport, related to the improper or unauthorized presence of aircraft, motor vehicles or other obstacles in the protected zone, restricted for use by departing and landing aircraft, where the protected zones includes the runway, the stopways, and the side safety strips. The prevention program includes the following actions: Development of additional information materials on runway safety for aircraft crews, air traffic controllers and motor vehicle drivers at the airports in the Republic of Bulgaria; Application of the EUROCONTROL action plan for preventing runway incursions ; Improvement of the system for collection and sharing information from/with all persons, who have been involved in such an occurrence; Participation in joint projects with airport operators for planning, design, and implementation of changes in the layout and markings of the maneuvering area with the objective to guarantee the assurance of runway safety; Establishing of relationships within the aviation community, and organizing fora, intended to raise and discuss runway safety issues Loss of radio communications or errors in ground air communications The problem of losing radio communications is of exceptional importance and deserves special attention within the framework of actions for preventing aviation incidents. Communication errors is a general term, which covers a multitude of factors, which influence mainly the Very High Frequency/High Frequency (RTF) radiotelephone communications. The term covers also errors, related to readback, mis-hear, callsign confusion and the observance of RTF discipline standards. We plan to reduce the number of these incidents by: Expanding the volume of airspace, in which the 8.33 khz regulation is applied; The application of formalized coordination with aircraft crews and adjacent ATS authorities for clarifying the causes for loss of radio communication; Improvement of the quality of issued permits and instructions; Reducing the opportunities for error in issuing permits and instructions. Edition 1.0 Released edition page 78 of 95

79 Violation of minimum separation norms These are occurrences, during which two or more aircraft were allowed to come closer that the minimum separation norms, or when a single aircraft comes dangerously close to the ground/obstacle (below the admissible minimum). The prevention program provides for the following actions: Optimization of the route network by: - minimization of the number of two-way routes; - minimization of the number of route intersection points; Increasing the reliability and assuring the timely activation of the equipment/algorithms for short-term conflict alert (STCA); Improvement of the internal procedures for operative management of the workstations workloads depending on the quantity and status of the serviced traffic in the individual ATC sectors; Increasing the reliability and assuring the timely activation of the equipment/algorithms for medium-term conflict detection (MTCD) Violations/deviations in the coordination and interaction with military airspace users Civil aviation shares the same airspace with the military aviation. Temporary segregated areas (TSA) are activated when the military aviation is active. The airspace within inactive TSA may be used by the civil aviation. Due to the geographical specifics of the Republic of Bulgaria and the limited airspace, TSA are located in close proximity to civil aircraft routes. This implies an active coordination and an increased load on air traffic controllers during joint operations. We realize the potential risks, caused by the simultaneous operation of civil and military aircraft. The prevention program provides for the following actions: Harmonization and integration of civil and military technical systems: Updating strategic and tactical procedures (coordination agreements and interaction at an operational level); Improving the tactical-level coordination; Optimization of the airspace with the objective of reducing to minimum the opportunities for conflicts between civil and military aircraft The human factor Qualification and efficiency of air traffic controllers Edition 1.0 Released edition page 79 of 95

80 Personnel efficiency is measured by the ratio between the total number of aviation occurrences and the number of occurrences caused by and/or due to human factors (air traffic controllers, aircraft crews, and motor vehicle drivers). We plan to reduce the number of incidents with the involvement of air traffic controllers by the following actions: Linking safety to routine operations at the ATC operations room; Establishing a sound and authoritative safety management and a positive safety-oriented culture; Efficient management of air traffic controllers workloads Air traffic controllers` workload management The management of the air traffic controllers workload is an important component of safety related activities. The objective is to guarantee that the Air traffic controllers at the Operations room are sufficiently qualified and match the constantly increasing requirements, while at the same time there is a reserve capacity of personnel, ready to take over an unexpected and abrupt increase of the workload. The situations, in which air traffic controllers` workload has reached unexpectedly high levels, are potentially dangerous as the air traffic controllers would be incapable to guarantee aircraft safety under their control. The periods of very low air traffic controllers workloads are also potentially dangerous, as the air traffic controllers may grow abstracted, lose concentration, and fail to perform their duties in line with the effective technological requirements. At the present stage, we shall focus our efforts only on cases of overload. We plan the following measures in this aspect: Development of a consistent approach to the strategic and tactical management of resources; Improvement of the organization of air traffic flows with the objective of reducing the possibility of traffic concentration within relatively small sections of the airspace, and assuring a consecutive and ordered air traffic; Periodic measurements of real-time workloads; Improving the utilization and the reliability of the means for workload forecasting for the individual ATC sectors Operational environment Air space complexity Edition 1.0 Released edition page 80 of 95

81 We recognize that the organization of the air space has a fundamental impact on safety. That is why it is highly important, each time a change in the organization of air space is introduced, to evaluate adequately the safety aspects of these changes and to comply strictly with the potential safety requirements. The major actions in this aspect are: Restructuring the air space by taking into account: the results from the evaluation of the air space safety; recommendations from investigations of ATM related occurrences Flight operations rules and procedures These key priorities are focused on safety related issues in terms of providing ATS outside the controlled areas, the interface between the various air space classes and the use of air space Class C, E and G, where the interaction between instrument flight rules (IFR) and visual flight rules (VFR) may result in a situation, in which the different aircraft are provided with different services (Air traffic control or Flight information services) and some of the aircraft remain outside the full control of the ATS authority. The key activities in this area are: The definition of new/supplementary rules for assuring ATS outside the controlled areas; Review and updating of the conditional routes; Review of the flight rules and of the relevant procedures with the objective to remove any and all causes and probabilities for the emergence of a potential risk for an aviation occurrence; Introduction of a communication strategy with the objective to maintain and improve the understanding by air traffic controllers and aircraft crews of the flight rules and the related risks Safety management system capability Leadership and safety culture Efficient leadership and culture, which persistently aim at timely detecting and indicating potential risks, are especially important in our line of business. The good safety culture concept is being realized by creating insight and understanding of potential safety risks and of the ways to describe them. A good safety culture exists when people feel responsible for detecting and describing potential safety risks before they result in an incident or an accident. Good safety culture means also that people change the way they work on the basis of lessons learned. We believe that the persistent development of leadership qualities and the focus on the Edition 1.0 Released edition page 81 of 95

82 development of a perfect safety culture within the whole organization will result in more efficient efforts for raising the level of safety. We will improve our capabilities in leadership and safety culture by: The creation of a framework for the safe conduct of the managing personnel within the organization; The involvement of all members of personnel in a dialogue about the good safety culture and about what it actually looks like; The involvement of all members of personnel in the development and introduction of safety improvements; The development of safety awareness in all members of the personnel and its application in routine work; Continuing to measure the safety culture at BULATSA Development of the safety management system The safety management system (SMS) represents a combination of activities aimed at achieving, assuring, and maintaining a high safety level. The use of SMS within the organization, and the ideas embedded in the SMS have proven their usefulness and efficiency on an international scale. The necessity to employ a safety management system in providing air traffic services is stipulated by ICAO and EUROCONTROL regulations as well as in the Single European Sky initiative. The major activities within our strategy for improvement of the safety management system are: Broad use of studies on safety culture and the development of rules for the safe conduct of the managing personnel within the organization; Identification of key safety factors; Adoption and introduction of the key safety factors in the management of BULATSA; Improving the SMS related knowledge of all members of the personnel at BULATSA; Development of local initiatives for air traffic controller s workload management and improving air traffic management techniques; Continuous improvement of the procedures for risk evaluation and management; Edition 1.0 Released edition page 82 of 95

83 Work with all interested parties on the development of a framework for future ATS safety regulations Future risks The expected increase in the air traffic will force us to introduce new technologies and develop new operational concepts. These may come as a result of the emergence of new types of aircraft, changes in the requirements applicable to air navigation services, new air traffic management technologies, changes in operational concepts, or changes in regulatory instruments and laws. Our objective will be to convince ourselves that these innovations will reduce the currently existing risks, while taking into account the possible emergence of new risks. In order to improve our capabilities to evaluate reliably future concepts we plan to: Develop methods for the evaluation of the risks and of the benefits of new operational concepts as early as their design stage; Develop capabilities to verify risks and benefits for safety during all phases of the development and introduction of new concepts; Improve out capabilities to confirm (and legitimize) the safety of the future concepts. 2. Conditions for the implementation of the Program Competence The personnel in charge of safety related processes is exceptionally competent, qualified, and motivated, and wherever necessary licensed to perform their duties. This is a fundamental prerequisite for reducing the number of aviation occurrences The safety related issues are integrated in a suitable manner into the relevant training and licensing programs Responsibility for the implementation of the Program The Director of the Safety Directorate is responsible for the implementation of the Program at BULATSA The BULATSA management controls the activities related to safety management via the Safety Council Risk evaluation and management Edition 1.0 Released edition page 83 of 95

84 All changes in the air navigation services (ANS) system are subject to risk evaluation. The functions of the ANS system are evaluated in terms of their impact on safety and targeted safety levels are specified. All elements of the system are subject to evaluation in terms of safety organization, personnel, air space, procedures, and equipment. Safety evaluation shall include adequate measures for reducing risks, depending on the impact of the change on safety SMS records The processes and responsibilities related to the safety management shall be recorded explicitly on a regular basis in a manner, which clearly indicates how the principles of safety policy have been applied in practice External services Adequate measures are implemented to manage the impact of external services on the risk, depending on their impact on ATS safety Safety related occurrences Operational and/or technical occurrences, influencing the safety of the air traffic services system, are subjected to an immediate investigation and all necessary corrective measures are initiated. 3. Principles of safety verification 3.1. Control activities related to safety The control activities, related to safety, are performed routinely in order to: recommend improvements, wherever necessary; reassure the management in the safety of the activities under their control; verify the compliance with the relevant safety management requirements. The control activities related to safety, as well the other activities related to safety management, are integrated in the company s operations. Edition 1.0 Released edition page 84 of 95

85 3.2. Safety monitoring The components of the air traffic services system are subject to continuous monitoring with the objective to: identify negative trends and changes, which might result in an unacceptable level of safety; and initiate the relevant corrective actions Safety management activities records The results from the activities related to safety management are recorded and stored with the objective to be used for safety verification purposes. The results and the conclusions from risk evaluation and management are recorded and preserved for the whole life cycle of the respective components. 4. Distribution of safety related information The results from internal investigations of safety related occurrences, as well as the results from other activities related to safety management, must be distributed among the BULATSA personnel, and whenever possible distributed also among other aviation organizations. The management is obliged to distribute among the BULATSA personnel the information received from other aviation organizations. 5. Methods to increase safety The BULATSA personnel are provided with incentives to propose measures to reduce established risks and enhance safety BULATSA management provides incentives for, and facilitates the personnel to report immediately of safety related occurrences while assuring the confidentiality of reports BULATSA management initiates measures to enhance safety, whenever and wherever necessary BULATSA management provides incentives for the safety culture at the company, giving priority to the principle of learning from errors above the principle of sanctions. Edition 1.0 Released edition page 85 of 95

86 Actions, performed as a result of lack of competence during the process of air traffic management (actions caused by a verified deficiency of competence), criminal negligence, (with a verified faillure to perform official duties), intentional violation of the ATS norms and of the provisions of the regulatory documents, as well as the use of psychoactive substances (alcohol, narcotics) are considered as unacceptable and are subject to immediate sanctions. These circumstances relieve the investigating team of the responsibility to preserve the anonymity of the persons involved in the occurrence, and their names are submitted to their superiors for follow-up measures. ANNEX E. Public consultation material Note: The Minutes of the consultation meeting held in Bucharest are shown in the present Annex. MoM are not signed by all participants in the consultation meeting due agreement not reached with some of the IATA representatives upon some texts, as shown in the extract at the end of Annex E Edition 1.0 Released edition page 86 of 95

87 Edition 1.0 Released edition page 87 of 95

88 Edition 1.0 Released edition page 88 of 95

89 Edition 1.0 Released edition page 89 of 95

90 Edition 1.0 Released edition page 90 of 95

91 Edition 1.0 Released edition page 91 of 95