As Good As It Gets?

So the worldwide yearly air passenger numbers have topped four billion for the first time, writes Aimée Turner in the latest issue of Air Traffic Management magazine.

IATA says the new 2017 record saw airlines connecting a record number of cities worldwide, providing regular services to over 20,000 city pairs, more than double the level seen in 1995.

Back in 2000, the average citizen flew just once every 43 months. Last year, that figure was once every 22 months. Flying has never been more accessible and there were 4.1 billion tickets as proof of its popularity if proof was needed.

Asia-Pacific airlines with their 1.5 billion passengers are driving growth with an annual increase of 10.6 per cent but Europe with its 26.3 per cent market share is not far behind at 8.2 per cent.

That was 2017 however. The levels of growth seen this summer which put the European network under such severe strain may well represent ‘peak air’ for the region. Yes, it’s still safe to fly with a global rate of 12.2 fatalities per billion passengers – the safest year ever on the record for aviation –  but that’s only if your flight is allowed to take off.

Let’s not forget that one of main objectives of the European ATM modernisation programme SESAR was to contribute to a three-fold increase in capacity as compared to 2005 in an effort to avoid gridlock. And then came the downturn of 2008-2009 which resulted in much slower and more volatile traffic growth than before.

So European ATM simply took its foot off the investment pedal. It is well documented by the Performance Review Board which in its 2016 review of capital expenditure noted a ‘very significant’ underspend since the Single European Sky Performance Scheme started in 2012.

There was a 25 per cent shortfall across the board equating to €759 million between 2012 and 2014 as traffic levels fell significantly but, and here’s the rub, even less was spent in 2015 when traffic crept 2 per cent above the expected threshold.

So at a time when traffic and therefore income was falling some delay in capital expenditure was excusable but when traffic levels started to come back in 2015, investment did not meet the needs of growth. Fast forward three years and delays are skyrocketing.

The simple truth is that it is too late to invest as what investment has been committed is tied up in multi-year programmes. Back in 2016, the PRB forecast this under-investment over the 2015-2019 period – even on the basis of a low growth scenario.

The industry needs to invest in capacity before it needs it. European air navigation service providers know this but do nothing about it. Even the PRB is not entirely clear as to what is at the root of CAPEX under-delivery.

One thing is for sure, capital expenditure for ground infrastructure is funded from user charges and yet some €2.5 billion in EU financial incentives are up for grabs with many ANSPs spending significant effort to get access to these funds for their projects. Good money after bad? Go figure.