European Task Force determines public cost of delivering "timely" Single Sky

Around €3 billion of EU public funds will be needed between 2014-2020 in addition to numerous controls to ensure that the Single European Sky vision is delivered in a synchronised and timely manner.
Otherwise, warns a top Task Force set up by the European Commission to help define a SESAR deployment strategy, ATM modernisation will suffer from unsynchronised deployment and provide little incentive for airlines to invest in the new technology required.
The €3 billion should, it says, leverage private and other investment using different financial facilities currently under discussion, such as – but not limited – to industry sources, project financing solutions (loans or project bonds), guarantees, loans from commercial banks and the European Investment Bank.
The Task Force says possible public funding sources of interest could include the use of dedicated EU funds, such as TEN-T grants and Structural funds, innovation resources, and national funds.
“Making use of revenue from route charges should also be considered,” it adds.
A combination of such funding sources as well as innovative funding mechanisms could be used to promote the most appropriate mix of financial instruments and sources and match them to the needs and requirements of individual projects.
“The supply of public funding should be accompanied by the appropriate incentive
schemes and penalties, i.e. “sticks” and “carrots”,” says the Task Torce.
Funds, for example, could be conditional upon a commitment by industry to deliver the deployment within a certain timetable or other performance goals being met.
Penalties for failure to deliver or perform could, equally, include reimbursement or restrictions on funding.
Alternatively, “best equipped-best served” schemes could also be offered.
“The need for such “escalation mechanisms” was a lesson drawn from the experience with DataLink, to address, for example, the tendency for “last-mover advantage”, it says.
Additional funds in line with those available for the current research and development phase would also be needed for future innovation in ATM leading eventually to a highly automated system.
The Task Force says that while the overwhelming majority of investments should be made by industry stakeholders including airspace users, air navigation service providers (ANSPs), aircraft manufacturers, airports, the partial disconnect between investment and benefits during the transition phase means additional funding will be essential.
For example, the Task Force notes, an airline investing in new airborne equipage may not see any benefit before the ANSPs have made the corresponding investment. On the other hand, for an ANSP, the business case may not become positive until a significant number of aircraft are equipped.
“Synchronised deployment is essential,” the Task Force concludes.
According to current estimates, SESAR deployment will require a total investment exceeding €30 billion over a ten-year period up to 2020.
At €22 billion, airborne equipage including airlines (€11.5 billion), business aviation (€3.4 billion), general aviation (€940 million) and air forces (€6.4 billion) represents more than two thirds of the total investment. The balance (€8 billion) consists of investments in ground equipment (ANSPs, military ground systems, and airports).
The Task Force maintains that implementing SESAR will generate significant economic, environmental and strategic value for Europe as a whole and points to a newly published SESAR macroscopic impact study by McKinsey & Company that judges that in terms of the 27 EU nations, over the next 17 years (2013-2030, SESAR should deliver:
• a cumulative impact on GDP of €419 billion (0.16% of EU GDP);
• create approximately 328 000 jobs;
• eliminate a net amount of 50 million tonnes of CO2 emissions – equivalent to the annual emissions of a city of five million people.
In addition to CO2, SESAR will also have a positive net effect on air pollution and noise between 2013-2030, despite the additional air traffic created.
“The benefits of SESAR are extremely sensitive to the timeframe and synchronisation
of the way it is implemented. Any negative deviation from the SESAR
implementation timeline, as provided for in the European ATM Master Plan, would
put the significant benefits mentioned above at risk,” the Task Force warns.
In the case of a 10-year delay it is estimated that €268 billion GDP (€124 billion in terms of direct impact), 189,000 jobs and 55 million tonnes of CO2 savings would be at risk.
In the case of the unsynchronised implementation of SESAR, €117 billion GDP (€62 billion in terms of direct impact), 72,000 jobs and 35 million tonnes of CO2 would be at stake.
David McMillan, the Director General of air navigation safety agency Eurocontrol and a member of the Task Force, commented that this report represented a “significant input” to assist the Commission in its preparation of proposals to be presented to EuropeanTransport Ministers in October of this year.