A6 Position on CEF Funding

  • News

It is the main objective of this paper to provide feedback and recommendations from the A6 Alliance Air Navigation Service Providers (ANSPs) to the European institutions on the observations made with regard to the practicability of the financial support of the EU towards incentivizing ANSPs to implement the SES and the SESAR technologies and operational procedures.

Basic assumption: CEF funding in the context of SES shall

  1. help to ensure timely, coordinated and synchronized deployment of new and innovative SESAR technologies and operational procedures in order to implement a new and more performant European ATM system which in turn enables economic growth and sustains European competitiveness.
  2. incentivize and foster the long-term and sustainable achievement of the overall economic benefits of SESAR as outlined within the European ATM Master Plan. These economic benefits reflect both air traffic management becoming significantly more efficient as well as new operational procedures and systems enabling the ANSP to reduce its cost of service provision. This increase in efficiency will result in ANSPs achieving the targets of the Performance Plans and CEF funds utilized for the deployment of SESAR benefits therefore result in a stable, continuous and sustainable reduction of airspace user charges. In total the implementation of the European ATM Master Plan will generate economic benefits for airspace users and the European community of up to EUR 15 billion by 2035 (economic benefits greater EUR 1 billion per year as from 2027).
  3. incentivize and enable ANSPs to invest following European priorities in order to increase flexibility in service provision also at network level and to further improve their customer focus as well as gain the technological and financial capability to modernize continuously. The common agenda outlining the European priorities to be invested in are manifested through the PCP IR and the Deployment Programme of the SESAR Deployment Manager which ensures consultation and alignment with all relevant stakeholders.
  4. enable ANSPs to increase the speed of SESAR deployment implementation by providing the necessary financial means and flexibility. By means of the CEF funding, the ANSPs have additional motivation to actively undertake the planned investments and to move investments forward in time, as the investment plans are backed by public funds (e.g. CEF) and implementation is secured via the Specific Grant Agreements (“voluntary” contractual framework).
  5. treat SESAR stakeholders equally incl. ANSPs.
  6. empower ANSPs to implement SESAR technologies and operational procedures contributing to achieving the expected performance increases in all four Key Performance Indicators (Safety, Capacity, Cost Efficiency and Environment) within the scope of the area of responsibility of the ANSP and their ability to deliver at the direct benefit of the airspace users and the European economy. In addition, these performance increases constituting a sustainable improvement will also positively manifest themselves within the airspace user charges as well as in contributions to Performance Plans.

However, the current regulatory framework

  1. does in general not incentivize ANSPs to invest according to the coordinated deployment roadmaps (i.e. the Deployment Programme) of the SESAR Deployment Manager. It is to be noted that the ANSPs of the A6 Alliance have for now applied for significant amounts of CEF funding under the framework of CEF and the industry and A6 established SESAR Deployment Alliance in order to demonstrate motivation and willingness to deploy the technological and operational pillar of the Single European Sky, SESAR, for a modern European ATM network. However, CEF funds have been applied for in anticipation of future corrections to the regulatory framework as part of a dialogue based on constructive cooperation, such as the one currently executed jointly as an industry partnership under the framework of the SESAR Deployment Manager/ Alliance. Therewith, the provisions on “other revenues” defined in EU No. 391/2013 are in contradiction to the political spirit of the regulations facilitating the deployment of SESAR. Political incentivization for ANSPs is envisioned but currently not adequately provided for (specifically EU No. 409/2013 and EU No. 716/2014).
  2. utilizes CEF funds not strictly for the implementation of the trans-European transport network as funds are funneled via ANSPs towards the airline industry and thus misusing ANSPs as management companies for the distribution of EU subsidies directed at the airline industry. Contrary to the perception of the airline industry and political stakeholders, a sustainable reduction in cost for the provision of air navigation services shall and can to a major extent only be achieved through an increase in productivity. The main driver for productivity is the implementation of new SESAR developed operational procedures and technologies as outlined within the European ATM Master Plan. New and advanced operational procedures and technologies enable simultaneous achievement of cost and technology leadership. Not directing CEF funds at the deployment of these sustainable productivity increases but funneling CEF funds towards the airline industry on behalf of the EU constitutes a questionable and ineffective use of taxpayer’s money. SESAR Deployment is mainly driven and enabled by ANSPs who often incur unplanned costs to accelerate deployments or from business restructuring to enable the productivity benefits to be realized. They shall also be beneficiaries of CEF funds.
  3. establishes airline industry subsidies which are funneled to the industry via lower air navigation charges. Conversely and in the sprit of the Performance Scheme EU No. 390/2013, air navigation charges shall be gradually reduced as a result of the implementation of SESAR envisioned operational benefits. Reducing the air navigation charges shall thus not be achieved artificially via industry subsidies. Furthermore, lower air navigation charges shall be achieved sustainably via a true lower Determined Cost base resulting from the operational performance gains which contrary to airline industry subsidies represent a sustainable improvement of the cost-effectiveness of ANSPs.
  4. would not be coherent with the established performance based approach (EU No. 390/2013, Article 12) if CEF funds were to be handled (EU No. 391/2013, Article 4) according to principles applicable to the times when ANSPs were subject to full cost recovery without any economic risk sharing mechanism. The revised regulatory framework on the handling of CEF funds shall take this into account and enable the acquisition of funds which can be utilized by the ANSP within the context of achieving the goals set within the Performance Plans.
  5. discriminates ANSPs compared to airports in utilizing CEF funds to implement SESAR who within the current regulatory framework are ultimate beneficiaries of CEF funding and thereby leading to a non-level-playing field.

Concluding, the future regulatory framework shall ensure that

  1. a principle of non-discrimination amongst SESAR stakeholders on the handling of CEF funds is achieved.
  2. equally, ANSPs are established as beneficiaries of CEF funds for their investments and deployment activities.
  3. CEF funds are not utilized as EU subsidies towards the airline industry but to invest in EU priorities such as the implementation of the European ATM Master Plan yielding a win-win situation through economic growth and sustaining European competitiveness.
  4. the corresponding regulations (particularly EU No. 391/2013) are changed accordingly within the RP3 preparations to integrate the requested changes.