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Economic Impact Of ATC Jeff Poole, March 2007
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Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Mar 27, 2015

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Page 1: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Economic Impact Of ATC

Jeff Poole, March 2007

Page 2: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Air transport is critical to the global economy

We are a US$450 billion industry

We support US$2.9 trillion in economic activity

Page 3: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

But an industry in crisis since 2001 needs leadership

Page 4: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

2001-2005 airlines globally lost over US$40 billion

2006 expect losses of US$1.7 billion

series of crises that changed air transport

Since 2001:

Page 5: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Airlines improved their bottom line even

as fuel prices skyrocketed

Page 6: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The industry is moving in the right direction

Page 7: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Since 2001…

Labor productivity increased 33%

Sales & distribution costs dropped 10%

Non-fuel unit costs reduced 13%

Page 8: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

But it’s a bit early to celebrate…

Globally ATC unit costs raised with 9,4%

The costs of ATC inefficiency are too high

Page 9: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

ATC impacts an airline in many ways

Safety

Performance

Capacity

Cost Efficiency

Page 10: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

We need to ensure the right balance

SAFETY

PERFORMANCECAPACITY

COST-EFFICIENCY

Page 11: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

We need a continuous focus on Improved Performance

Financial Performance

Operational Performance

Both Impact Our Bottom Line

Page 12: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Financial Performance:

Page 13: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The global Airport & ATC share of the costs is large:

Global USD 42 billion bill

11% of average airline cost base

Page 14: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

We experience major global differences in:

Transparency

Stakeholder Engagement

Efficiency

Page 15: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

And major ATC cost variations:

From USD 0,04 per KM to USD 4 per KM of

controlled flight

Page 16: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Control operational costs

Efficiency:

Invest wisely

Harmonize Services

Control overhead

Page 17: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Invest Wisely:Hudson Bay Example

Radar Investment $ 37 mln

ADS Investment $ 10 mln

Annual operational benefits:$ 11 mln

Page 18: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The choice for ADS-B:

Lower investment

Operational benefits

Future technology

Page 19: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Avoided Investment,USD 22 million…… through:

Proper Cost Benefit Analysis

Stakeholder Engagement

Page 20: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Airline involvement will lead to successful implementation

Stakeholder Engagement

Involving airline expertise will lead to more efficient investments

Airlines are customers and are directly affected

Page 21: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Justification is required that charges are cost based

Transparency

Major investments should be justified and required

Airlines should exactly know what they pay for

Transparency should lead to improved benchmarking

Page 22: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Operational Performance:

Page 23: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The high price of oilcontinues to hurt airlines

Page 24: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The industry fuel bill rose from…

2001 fuel bill:USD 43 billion

2005 fuel bill:USD 91 billion

2006 fuel bill:USD 115 billion

Page 25: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Which Reinforces:Flying Time = Money

Page 26: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

There are multiple ways

From A

8200 nm

9100

To B

Page 27: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

8200 nm

With Major Cost Differences….

Saving 43 Minutes

Saving 8400 kg of fuel

Page 28: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Move from this……

Page 29: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

To this……

Page 30: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Straighter routes and removal of barriers are of great importance to an improved performance

Page 31: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Pretoria

Algiers

UM731

UM998

RUDASGBV

MAIDUGURI NODJAMENA

ORAN

African Red Carpet express routes annually save the industry USD 7.6 million in costs

Page 32: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The European Challenge

EUR 9,5 billion in ATM costs

EUR 1 billion in delay

EUR 1,5 billion in inefficiency

EUR 7 billion in provision costs

Page 33: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The European Challenge

EUR 3,3 billion in possible improvement

EUR 0,5 billion airspace redesign

EUR 0,3 billion capacity planning

EUR 2,5 billion consolidation

Page 34: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Military operations are also affecting performance……….

Page 35: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

One Military Atlantic Exercise

600 NM Restricted Airspace

NAT traffic heavily impacted

Airlines lost USD 1,9 mlnIn one day

Page 36: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

The Global Performance Challenges

Harmonization of airspace

Standardization of Infrastructure

Consolidation of providers

Lower Unit Costs

Page 37: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

What can ANSPs do?

Drive cost reduction and efficiency improvement with more speed

Agree to challenging efficiency targets

Work together with airlines as business partners in long term strategies and investments

Page 38: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

What can Governments do?

Ensure independent regulation

Establish a level playing field

Set clear efficiency targets

Remove obstacles

Page 39: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.

Let’s improve our performance as an industry

IATA is here to help

Page 40: Economic Impact Of ATC Jeff Poole, March 2007. Air transport is critical to the global economy We are a US$450 billion industry We support US$2.9 trillion.