Back to the Future

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A re-think for the think-tank on ATM policy.

Yesterday, during the World ATM Congress, a group of industry players launched a think-tank on how the efficiency and performance of air traffic management (ATM) can be improved through greater market liberalisation. I have worked the related policy questions for close to 20 years, first at IATA and then at CANSO in its representation to ICAO, so I cannot help but comment on yet another noble initiative…. Unfortunately, over the years there has been lots of study and debate, but little action to effect the real change we want to see. If we want to improve the efficiency and performance of ATM, and fundamentally change how air navigation services are provided, then we would do well to look to the past – how it all started – with a view to what the future could look like.

In the early days of commercial aviation, it was the airlines themselves that provided for their own navigation aids. Companies like KLM and Imperial Airways established beacons along their routes to the far east. And, traffic control techniques at airports were introduced by the airports themselves, working with the aircraft operators. This all changed after WWII, with the signing of the Chicago Convention wherein each contracting State committed to provide air navigation facilities and services in accordance with international standards. In essence, the responsibility for these tasks was taken away from the airlines and airports. Unfortunately, liberalisation of air traffic management as proposed in the policy paper, either through competition for selected ATM services (i.e. competition for the market) or corporatised (or privatised) ANSPs operating independent of government, does not offer a suitable alternative to true competition (i.e. competition in the market) since both approaches can be gamed by the actors involved. This approach would amount to a mere “tinkering at the edges”, and has already been variously tried.

The best way to accomplish true competition and real change is to turn over the responsibility of service provision back to those who do in fact compete in the market – the airlines themselves (“Sorry, as States we have made a mess of it, and we wish to turn the responsibility of service provision back over to you!”) In meeting this responsibility, the airlines can contract with global companies that provide the communications, navigation and surveillance services that are needed en route in a more efficient manner, much of which is now already satellite-based, and making full use of modern aircraft capabilities. Airports likewise can contract with entities that provide traffic control services in and around the airport, or provide the services themselves. These services would need to be provided at competitive prices since airlines can and do make choices on where they fly and at what frequency. Airports have long maintained that they compete for traffic, thus it stands to reason that they are already incentivised to be cost-competitive. If they are not, their connectivity to the world and the cities they serve will suffer.

Article 28 of the Chicago Convention will at the very least need to be re-interpreted to reflect modern times and available technology. At worst, it will need to be rewritten to reflect the fundamental responsibility that only the State can and should provide – regulatory oversight. States should ensure that aircraft operators have made the necessary arrangements for the availability of facilities and services to facilitate air navigation in a safe manner, to be provided in accordance with international standards and practices agreed for the most part by the industry itself. This will also put a stop to the micro-management by the regulatory community in a service function that should rightly rest with industry. The pace of technological change is just too fast for ICAO and the regulatory community to keep pace, and therefore it must adopt a performance-based regulatory regime.

Yes, what I am suggesting is radical. It entails a break-up of the monopoly air navigation services industry and a fundamental restructure that will result in new organisational forms and arrangements. This is not dissimilar to telecommunications deregulation and the break-up of the PTTs in the 1980s and 90s, which was urged on by public calls for dependable, technologically advanced and reasonably priced services. Further, the advent of the internet has been a significant disruptive force for the telecommunications industry. Such disruptive forces are equally at play for air traffic management that can render the role of the air navigation service provider irrelevant. States can best serve this industry by preparing it for competition, for it will be overrun by technology advancements. The question is: will the industry step up and be the change it wants to see?

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