Shared ATC services for airports

Analys is & commentary for

decis ion makers in the av iat ion industry

Shared ATC services

for airports

How sharing Air Traffic Control

services between airports could

reduce cost and improve service

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Introduction The provision of Air Traffic Control services are significant operating and

capital costs at any airport. Sharing ATC services between airports is one

way in which the costs could be reduced.

This paper:

presents the economic background for airports,

describes how ATC services could be shared between airports and the

costs and benefits that can be expected,

presents a commercial model that could be used to achieve this,

borrowed from the airline industry.

The commercial challenges facing airports

Airports are under financial pressure from many directions. Security and

border management obligations have become much more onerous since the

9/11 terror attacks. The financial crisis of 2008 changed the economic

environment and led to significant reductions in air transport movements.

Low cost carriers have massively expanded their operations but revenue

per passenger has fallen.

The toughest challenges are faced by smaller airports. The EC has stated

that1 "airports that have fewer than 1 million passengers per annum [are]

typically struggling to cover their operating costs".

With a similar theme, ACI states2 "airports only gain equivalent competitive

economies of scale as they approach the 5 million passenger threshold".

New EU rules on State Aid are proposed that would impact the support that

airports can have from regional governments and Annabelle Lepièce, a

lawyer representing the French region of Languedoc-Roussillon, has stated

that "if the guidelines are applied as the Commission intends to, it could

lead to the closure of around 100 airports".

1

Air Traffic Control (ATC) services can represent a major cost for

airports, many of which are already under great commercial

pressure. Sharing ATC services between several airports is one

way in which they could reduce their costs, and potentially

achieve other benefits such as improving the services they offer

and overcoming common staffing issues. This paper explains how

ATC services could be shared between airports and offers a

collaborative model that airport operators can use to achieve it.

Many airports are under

enormous financial pressure

1 Draft EU Guidelines on State Aid to airports and airlines (2013)

2 Airports & State Aid: How to protect both growth & competition (2013)

Within the EU are 460

nominally commercial

airports, only about 15% of

which are profitable1

ATC costs are inelastic

because even one aircraft can

require a full ATC service

The consequences of these pressures are amply illustrated in the airport

market. In the UK, Prestwick and Cardiff airports have returned from

private to state ownership. Both airports were loss making and were sold

for a nominal fee. In Greece, the government has had to reject claims that

it will be closing 22 regional airports. In Spain, several regional airports

have been built that have little chance of being commercially viable.

For regional airports, commercial pressures are compounded by trends in

the airlines market. Regional airlines have difficulty in profitably competing

with low cost carriers and are cutting back. In Europe, both CityJet and

Flybe have reported substantial losses. As airlines withdraw unprofitable

routes, smaller airports, especially those with small low cost operations will

lose traffic to the big hubs. Without radical action these airports face

inevitable decline.

For regional governments, their local airports nevertheless remain an

important part of their economic infrastructure. Airports are seen as

providing the potential for jobs and prosperity to the local community, as

well as a link to the world. Regional governments are usually keen to

support their airports but are less well equipped to ensure their commercial

viability. They may therefore be particularly interested in initiatives that

help to ensure that airports are able to operate viably, creating a business

base from which to build more local employment and economic activity.

The problem for airports is that they have significant fixed or inelastic

costs, in part arising from the regulatory requirements of their operating

license. Smaller airports do not benefit from economies of scale (see graph

below).

The costs of ATC services are significant for airports. They are also fairly

inelastic because even one passenger aircraft can require a full ATC

service. Airports with fewer than 5 million passengers per annum are

particularly vulnerable as described above.

2

Ground ATC service

(may be combined with Tower)

1 reason.org/news/show/1013705.html

Shared ATC services for airports

What is shared ATC?

There is presently much discussion in Europe about how ATC services could

be shared to save costs. Under the Single European Sky performance

scheme, a "centralised services" option has been proposed by EUROCONTROL

as a means by which certain ATC functions will be provided centrally

instead of being replicated in each country.

In this paper, we focus on a local version of this concept. We describe how

the two main ATC services that are required for airports above a minimum

size (the approach and the tower services) can be shared between several

airports.

The concept for shared ATC services is to move the location of equipment

and staff to a common facility and to provide the airport's ATC services

remotely from that facility.

The new facility (which could be located at one of the participating airports

or elsewhere) will be able to provide services at lower cost because the

resources will be shared between several airports. It will also provide a

chance for participating airports to build centres of excellence in the

necessary services and support functions.

There are already several examples of an approach control service being

shared:

CANSO news reported that: "French ANSP DSNA announced [in

November 2013] that it has completed consolidation of the lower

airspace in the South of France, with approach control for four

commercial airports now provided 24/7 by the Montpellier facility

rather than each airport separately."

Vantage ATS transferred the approach control for Robin Hood Airport

Doncaster Sheffield to Liverpool John Lennon Airport and created a

shared approach control for the two airports.

In this paper, we are looking

at the approach and tower

services

Several airport groups have

already implemented shared

approach control services

3

The approach service, delivered by the approach controller, provides

the ATC services for arriving or departing controlled flights. The ap-

proach service takes aircraft to/from the en-route airspace and feeds

them to the tower controller. The approach controller usually relies on a

radar screen, but in lower density areas they may provide "procedural"

control without using radar.

The tower service is responsible for the ATC service for aircraft and

vehicles operating on the airport itself, and aircraft in the air near the

airport. Depending on the size of the airport, the tower controller may

be supported by a ground controller with the specific task of controlling

aircraft and vehicles on the airport surface.

The transition to a fully

shared approach and tower

service could occur in two

stages

A common approach control service has been provided since 1993 for

Heathrow and Gatwick, with all other London airports joining later.

The facility, known as London Terminal Control, is co-located with

the London Area Control Centre on the UK south coast.

Moving the tower control service (and ground control, if applicable) will

rely on the emerging technology of remote towers, described on page 6.

Both the approach and tower services can be shared, and this could be

organised in a two-stage process illustrated below.

4

Technology

The technology required to share approach control is already commonly in

use. En‑route ATC has always been conducted at centralised facilities fed

with radar data and the necessary communication links. The principles that

apply to en-route facilities will match with approach control. It is worth

emphasising that there are no technical or operational requirements that

prevent the separation of approach and tower control.

The technology required to share tower services is less mature and it will

require the successful evolution of remote towers (see opposite).

The development of remote towers is an interesting parallel to the

development of remotely piloted aircraft (commonly referred to as UAV or

UAS). The introduction of these aircraft is also driving forward the

regulatory changes to accept more remote operations. We can imagine a

situation in the future where an aircraft lands at an airport but neither the

pilot nor air traffic controllers are present.

People

The functions of staff at a common ATC facility do not change. There will

still be a need for all of the functions that would otherwise be provided at

each airport. Once both approach and tower services are migrated to the

shared ATC facility, the functions there will be:

Approach and tower controllers

Management, including watch supervisor

Maintenance

Training

HR and support functions (eg rostering, payroll)

Of course, the organisational structure may change, particularly because

the facility will support more than one airport.

At some airports, the approach and tower roles are shared between staff

(ie the same staff do both jobs). Therefore sharing only one of these

services may bring less efficiency gains at these airports than others and

this will need to be considered on a case-by-case basis.

Some maintenance services will need to be retained at the airport to

maintain the existing ATC equipment there. As a minimum, this would be

the remote tower and the aircraft communications, navigation and

surveillance equipment.

Other airport services

The use of a shared ATC facility will reduce the number of staff based at an

airport. But of course other airport services will still require a human

presence. At a small airport, many roles are already combined, eg the same

person can be in the fire crew, and provide baggage handling, refuelling

and marshalling services, etc. ATC staff do not usually share these roles and

so this should be unaffected.

The development of remote

towers is a parallel

development to remotely

piloted aircraft

Staff functions will not

change, although the

organisational structure may

Some ATC equipment

maintenance services will

remain at the airport

5

6

Remote Towers

In a remote tower (also known as remote virtual towers), the tower and ground controllers look at a video camera

image of the airport rather than looking out of the window. The image is captured at the airport and sent to the

controllers’ location where it is presented on video screens in “virtual windows”.

The other interfaces used by the controllers are also transferred to the remote site, including radio and telephone

communications, navigation aid monitoring, ground lights

control and the flight data processing system.

Controllers “look out” of the virtual windows and operate

their normal equipment to provide the usual ATC service.

Remote towers are an emerging concept. One of the

organisations leading their development is the Swedish

ANSP LFV. It has stated that the concept will be operation

in Q2 2014 and the picture below shows their Sundsvall

Remote Tower Centre.

The main advantages of remote towers are:

One remote facility can provide a service for several

small airports by switching between the airports as

required (see adjacent figure).

An expensive ATC tower is not required and the video

cameras can instead be mounted on a lower-cost mast.

The potential disadvantages of remote towers are:

The expense of setting them up and operating them

especially the ongoing communication costs.

The increased reliance on technology and, in

particular, the loss of a last-resort fallback option

whereby the controller can look out of the window at

an aircraft and speak to the pilot on a hand-held radio.

Copyright: LFV / Photographer: Kenneth Hellman

Benefits of shared ATC services

Addressing staffing issues

Smaller airports (especially those in remote locations) struggle to recruit

and retain ATC staff because it is a heavily regulated job requiring

specialist training and approvals. Finding suitably qualified people in the

right location (or willing to move) can be difficult. Retention can also be

challenging because salaries at large airports may be higher, so some staff

can be tempted to move away.

A facility to provide shared ATC services should ease these staffing issues

because:

It can be placed in a location that encourages staff recruitment.

It can offer more varied career development options to staff,

increasing staff retention.

If it is big enough, it could even establish its own staff ATC training

capability so that it does not need to recruit already qualified people.

Cost savings

The significant cost differences for establishing and operating the shared

ATC facility are illustrated in the following table.

The table on the opposite page illustrates staffing requirements for a

common facility for two typical small airports compared to those of a

centralised facility. The savings assume that the movements are low

enough that the same staff can effectively support both airports

simultaneously. Of course, the potential savings shown need to be set

against other CAPEX or OPEX items, including transition and re-location

costs.

A full investment case will be required for any proposed implementation

taking into account the specific local factors.

Today, staff recruitment and

retention can be a major chal-

lenge at smaller airports

7

CAPEX OPEX

Likely implementation/transition costs:

Equipment transfers where possible, or new

equipment where not, including remote tower

mast, cameras and other systems

Staff transition or redundancy costs

Safety assessments

Likely changes to ongoing costs:

Increased communications costs

Reduced maintenance costs, through common

procurement (see section on buying clubs on

page 11), single equipment standards and cen-

tralised maintenance

Reduced staff costs, due to fewer staff overall

Reduced management and support costs, due to

economies of scale

The shared facility will be less

reliant on a small number of

staff for critical expertise

The shared facility may be

able to provide new services

economically and will benefit

from increased purchasing

power

Improvements in service

Small airports can struggle to meet all their existing regulatory

requirements and these requirements are only increasing and becoming

more complex. Sometimes airports rely on a small number of staff for

critical expertise, leaving them vulnerable in the case of staff absence or

work overload.

A shared ATC facility will create a critical mass that allows for expertise to

be developed and maintained in key areas such as safety and regulatory

compliance. Teams of experts can be built that will not be vulnerable to

one person becoming ill or leaving. Management of annual leave obligations

should also improve.

Activities such as safety cases will also benefit from pooled experience and

the application of best practice.

Finally, other services might be provided that would not be economic for a

single airport to provide. For example, the design of new approach

procedures is a relatively expensive task for a small airport. The airports

would benefit from increased purchasing power for procedure design

through a common procurement (see section on buying clubs on page 11).

Additional airports may be added to the group to further exploit the

economies of scale and develop the capabilities available to all airports

participating.

8

Airport #1 Airport #2Airport #1 + #2

current total

Shared ATC

facility

Estimated staff numbers

Tower controllers 7 8 15 9

Approach (radar) controllers 10 7 17 10

Air Traffic Assistants 8 8 16 9

Engineers 6 6 12 8

Senior Air Traffic Controllers 1 1 2 1

Secretarial/Admin 1 1 2 1

Total 33 31 64 38

Annual staff cost saving, assuming typical UK salaries and employment costs 40%

Main assumptions:

• Airports #1 and #2 based on 2 UK airports with service details taken from public documents

• Calculations made for airports operating 7 days/week, 2 shifts/day (not 24h)

• Numbers based on judgement and CAA guidelines

Airport #1 Airport #2Airport #1 + #2

current totalShared ATC

facility

33 31 64 38

Implementation and transition

considerations

Safety

A shared ATC facility must be shown to be safe through the usual processes

of safety case development leading to regulatory approval. Work will be

required, particularly for remote towers which are still an emerging

technology. There are safety assessments and trials of remote towers

already underway in several countries including Norway, Sweden and

Australia. The consequences of equipment failures must be assessed in the

safety case and mitigations devised to ensure an adequate level of safety.

This process is mature and well understood for ATC.

It is, however, worth noting that the principle of “remote service

provision” is well established in aviation, ie that a service can be provided

that is wholly and completely reliant on technology. This is already the case

for all en-route ATC and also for existing shared approach services such as

those described on page 3-4.

For remote towers, fallback and contingency operations need to be

carefully considered because there may not be any (ATC) qualified staff at

the airport to deal with the most severe technology failures. For example,

if the voice communication system fails today, then tower controllers can

use a hand-held radio to talk to pilots and can even resort to use of light

signals. This may not be possible if staff are remotely located. Other back-

up options include providing a dial-up telephone for emergency use and/or

training some airport staff to be able to provide emergency cover.

Achieving cost savings

There is a risk that cost savings are harder to achieve than expected – for

example an airport could end up keeping some staff at the airport while

having other staff at the new ATC facility. While this can have advantages

(eg a phased transition), airports will need to make the sums balance in the

long term. Good planning and implementation are essential. A target cost

saving for each airport participating in the scheme should be at least 25%

over the contract term, compared to the equivalent status quo.

Long-term evolution

Sharing approach services is a low-risk activity that could be implemented

fairly quickly by many airports. However, sharing tower services is subject

to greater risk as remote towers are not yet a fully matured, certified

solution. Airports would be wise to prepare a justification for the first stage

on its own, with further change as a future option that can be activated.

With the right implementation, just sharing approach services should still

bring overall cost savings.

As with all ATC operations,

ensuring safety will be the

primary consideration and

there are well-established

processes to follow

We anticipate that the target

cost saving should be 25%

9

The transition must be

planned to ensure service

continuity

An appropriate business

model for the participating

airports is vital to ensure a

successful collaboration

Transition

The operational transition of any ATC service requires careful planning and

execution. A plan will need to be developed for the operational transition

and financial performance. The safety case will address the safety

management of the transition and must ensure that any transition risk to

service continuity is mitigated.

The transition of staff may be a complex issue depending on the location of

the new facility. Some staff may need to move house and there is a risk of

staff loss at this time. The location of the new facility will need to take

these factors into account. There is a chance that some new staff will need

to be recruited and trained. These factors will influence the selection of

partner airports and location of the shared facility.

Training

The introduction of remote towers will require staff training as tower

controllers move from familiar surroundings to new operational concepts.

For approach controllers, the training will be much reduced, especially if

the equipment is moved from the airport to the new facility. Re-validation

may be required but this will be location specific.

Business models The following section describes a possible business model whereby

independent airport operators join to procure common services such as the

ones described here. It is a model that comes from the airport sector.

Similar models already exist in the domain of ATC. For example, there is a

buying club called COOPANS established between the ANSPs of Austria,

Croatia, Denmark, Ireland and Sweden with the equipment supplier Thales.

A buying club is equally relevant in countries where the airport ATC market

is not liberalised and a single ANSP provides the ATC services at all airports.

These ANSPs will still be seeking ways to reduce costs, especially given

cost-efficiency obligations from the Single European Sky.

10

© Mark Brouwer

Buying clubs A CUTE ‘Local User Board’ (CLUB) is a mechanism used by airlines, ground

handling companies and airports to procure common equipment and

operating services at airports. CLUBs can be found at most of the busiest

airports in Europe, as well as at international airports elsewhere.

The CLUB example offers a practical model for groups of airport operators

to jointly procure ATC services.

How does a CLUB work and what are its functions?

Common Use Terminal Equipment (CUTE) systems are procured by airlines,

normally using the CLUB structure, to manage their airport passenger and

baggage processing at that location. The CUTE system comprises hardware,

middleware, complex software, communications equipment, 24/7

operation with very high service level availability, and year-round

maintenance and operation. CUTE connects check-in, security and boarding

gate facilities to airline host systems, ground handling companies, border

control, homeland security, police and safety services - in a dynamic and

rapidly advancing technological environment. There are several commercial

suppliers of CUTE systems and services.

Common procurement

A typical CUTE procurement will involve around twenty airlines and ground

handling companies, half a dozen ground agencies such as customs and

security, as well as the airport company. A typical procurement might

involve €2m of capital costs and €8m of on-going operating and support

costs.

This €10m contract will involve the CLUB in agreeing a requirements

specification, target service levels, budget and timescales before inviting

proposals from qualified suppliers. Once awarded, based on agreed

selection criteria, the supplier will procure, install and operate the system

in return for a monthly fee, typically over a 7 year period.

The monthly fee payable by CLUB members will include all capital,

financing and operations costs, including support staff and the system

upgrades needed to ensure continued compatibility with the evolving

technology environments particularly in telecoms and computer operating

systems. The equipment procured is owned by the CLUB participants, each

of whom signs a Master Service Agreement with the contracted CUTE

supplier.

Each member organisation will pay pro-rata based upon their planned and

actual usage of the system, with any necessary reconciliations made at

each year end.

A CLUB is not-for-profit and any benefits are shared with the members. A

chair is normally appointed from within the membership on a rotational

basis. CLUB Members (companies) each have one vote, although Members

may have more than one participant, for example for technical and

commercial expertise as needs arise.

The CLUB model is used to

buy and operate CUTE

passenger processing systems

Each CLUB participant signs an

agreement to pay their share

of capital and operating costs

Payments are usually based on

the planned/actual usage of

the system

CLUBs are not-for-profit and

benefits are shared with its

members

11

A CLUB simplifies

procurement and brings

economics of scale to its

members

The CLUB principles could be

applied to shared airport ATC

services

The CLUB model allows

competitors to work together

for mutual benefit

Functions and benefits

The CLUB has on-going functions after contract award, specifically:

Service performance monitoring.

Collection collation and agreement of new service requirements

(service changes).

Consideration and approval of changes necessary or proposed by the

supplier.

Changes of scope such as new members or increased service capability.

Managing ancillary emerging requirements which impact most or all

members, for example long-term technology planning.

Service contracts are typically for long durations, normally 5 or 7 years.

A CLUB brings these benefits:

It simplifies the procurement process for each member.

It brings some economies of scale and creates improved purchasing

power.

It allows users to progress in a federated way, eg through coordinated

software upgrades, and coordinated adherence to technology or safety

policies and regulations.

It harmonises the technology and operational strategies of participants.

Applying the buying club to shared ATC services

Applying the concept of the CLUB principles to shared ATC services, a group

of smaller airports could form a similar buying club with these principles:

The buying club would procure all ATC services and equipment for the

participating airports.

A common specification and service level agreement would apply.

Each member would pay in proportion to their usage, for example by

an annual forecast of Instrument Flight Rule (IFR) air traffic

movements.

A long-duration agreement (eg 7 years) would allow time for the buying

club to deliver enough cost benefit to justify the change.

Existing staff could retain employment with their existing employer, or

they could transfer employment to the contracted service provider.

(Local employment regulations will need to be taken into account.)

As with airlines, airport operators can be in a fiercely competitive

environment. The principles of the CLUB are important to allow the

competing organisations to work together.

To avoid airports having to raise the capital to establish the shared service,

we anticipate that this requirement will be placed on the buying club

supplier. Airports would simply pay a monthly fee whilst the supplier

arranges the necessary financing.

Suppliers would be attracted to the opportunity by the size of the

procurement, creating a competitive market that is required for a

successful procurement.

12

Conclusions In this paper, we have described how ATC services can be shared between

airports. There are two services that we have examined:

A common approach service that could be implemented today

A common tower/ground service that is a few years away from

widespread implementation

We believe that sharing these services could save money for small airports

at a time when many are struggling to stay solvent. It would also overcome

common staffing issues and improve the quality of service. Such an

approach could be the lifeline that small airports need to keep going in

tough times.

The proposed business model allows airports to share risk and reward for

mutual benefit and has been widely tested in the airport/airline

environment.

One day, all ATC services may be shared. We may wonder how it was that

air traffic controllers actually sat at the airport. Technology is changing so

many aspects of our lives that this is not inconceivable. We expect that the

advantages will outweigh any disadvantages at least in terms of the cost

savings and operating efficiencies that airports crucially need to survive.

We believe that sharing

airport ATC services could

save money and improve

service quality

A not-for-profit business

model borrowed from airlines

could be applied

13

How can airports move forwards?

Airport operators need to identify other airports with which they could collaborate, and then collectively

evaluate the concept. A feasibility study will be required that includes these activities:

Identifying suitable airports to participate in the buying club.

Developing the specifics of the concept for the airports concerned.

Preparing a business case to evaluate the concept.

Developing an outline agreement for the buying club.

Identifying key risks and preparing risk management plans.

Engaging with the Civil Aviation Authority (CAA). (We recommend early discussions with the CAA so

that the acceptability of different proposals can be tested.)

A transition strategy would also need to be agreed, for example:

Step 1: Establishment of a centralised approach control centre, and management mechanisms, centres

of excellence, etc.

Step 2: Transition of all staff and equipment to the new centre.

Step 3: Remote tower proof of concept at one airport.

Step 4: Transition one airport to remote tower concept.

Step 5: Transition remaining airports to remote tower concept.

There is a role here for regional governments, trade organisations or similar groups that may wish to co-

ordinate activities for a number of local airports. A regional initiative could bring jobs and stability to local

airports, and may overcome the potentially fragmented approach that could otherwise arise.

14

About Helios

Helios is a management and technology consultancy, focusing on the Air

Transport, Airports and Space sectors.

We help improve economic, business and operational performance;

diagnosing problems, crafting solutions and delivering results. Our

specialists provide problem solving skills for government bodies and

agencies, regulators, service providers, industry, and investors.

The company was established in 1996 and joined Egis, an international

engineering and infrastructure group, in 2013.

Helios has its headquarters in the United Kingdom and offices in Dubai

(UAE) and Žilina (Slovakia). Twice winner of a Queen’s Award, Helios has a

reputation for excellence worldwide and is ISO 9001 certified.

How we can help

Helios develops policy and strategy advice based on evidential analysis. We

can undertake technical, economic and feasibility studies to support

investment decisions. We can further support detailed planning and

delivery of changes.

Our detailed knowledge of Air Traffic Management enables us to assess

potential changes in organisation and technical arrangements. Our wider

knowledge of the airport market, and operations at larger and small

airports also support this.

We are also part of the Egis group a €900M infrastructure group that

operates airports and other transport infrastructure around the world and

can draw on their experience in our work.

Get in touch…

For further information please contact:

Nick McFarlane

Managing Director

T +44 1252 451 641

E [email protected]

linkedin.com/in/nickmcfarlane

The content of this document is intended for general guidance only and, where relevant, represents

our understanding of current status of telecoms industry matters. Action should not be taken without

seeking professional advice. No responsibil ity for loss by any person acting or refraining from action

as a result of the material in this document can be accepted and we cannot assume legal l iabil ity for

any errors or omissions this document may contain.

© Helios - February 2014

Al l rights reserved.

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