Effective air navigation services in Norway – reflections from airspace users Torbjørn Lothe, Director General, Federation of Norwegian Aviation Industries ATM-conference 30. May 2017

Avinor Flysikring – ANSP in Norway Avinor Flysikring is currently the only ANSP in Norway Avinor Flysikring has, since summer 2014, been a subsidiary to Avinor AS Appointed by the Ministry of Transport and Communications For en-route: 2024 Terminal: 31. December 2017 – will open up for competition on towers not included in the remote tower project Competition on remote tower services: 2024

Eiermelding – report to the Parliament The Government stated in "Sunvolden-erklæringen" that it will open for competition on terminal air navigation services The Government reaffirms this in "Eiermeldingen": The Government will start the process of fully separating Avinor Flysikring (AF) from Avinor AS Asks Avinor to start the process preparing public tenders (2017) First phase – AF subsidiary of Avinor NHO Luftfart fully support this decision! We have in fact argued for this for several years Should start tendering this year and must prepare for separation of AF Must establish transparency to ensure fair competition on new tenders

Eiermeldingen opens up for competition The Government will also allow Avinor Flysikring to provide air navigation services internationally A separate entity/subsidiary will be established – economically and operationally separated from Avinor Flysikring Also this is something we support Logic to allow Avinor to compete internationally when the "home market" opens up Will strengthen Avinors competitiveness Subsidiary ok

Eiermeldingen – Remote Towers The Government states that Avinor should continue the process of establishing remote towers: Phase 1: 15 airports covered Phase 2: 10-20 additional airports Avinor has estimated a 30-40%/40-50% reduction in operating costs Remote Tower Services: Open up for competition in 2024 We support the introduction of remote towers, but So far; unproven technology & fairly high business risk (?) Realistic cost savings(?) How many airports should be included (when will the economies of scale level out)? Can RTS be put on tender before 2024? At the same time we believe that the remaining towers (15) should be put out on tender Ownership of required ATM infrastructure should lie with the airports Ownership must not be an entry barrier for new ANSPs Why choose to "put all eggs in one basket"? Why should that basket be Avinor?

Eiermeldingen – language requirements The Government asks the CAA to assess if the current language requirements can be lifted for air traffic controllers providing tower services The military airspace users have to pay for the costs they are generating – today the civil airspace users cover these costs We support lifting current strict language proficiency requirements for air traffic controllers This will provide for more mobility for air traffic controllers and facilitate competition from international ANSPs The system/services will be less vulnerable We think safety issues could be handled

Additional elements in achieving an effective & competitive market in Norway Terminal charges: More transparency should be established relating to the allocation of costs between the four airports covered by the performance scheme and the remaining airports Before being put on tender – fair allocation A level playing field; equal treatment between monopoly- and deregulated airports Are the criteria used to allocate costs between terminal and enroute services "correctly" applied? Best business case for Avinor versus airspace users The WACC of Avinor Flysikring should be reduced within the existing reference period (for the benefit of airspace users) a fair calculation? Norway should be part of Connecting Europe Facility (CEF)

Has NEFAB contributed to a more effective ATM system? Where are the promised economic benefits (400 mill NOK from 2015/600 mill NOK from 2020)? Free route airspace – is NEFAB a prerequisite? What kind of improvements can (the concept of) NEFAB provide? Extended geographical scope - include Sweden and Denmark? New ambitious goals – including human and technical resources?

On a European level The completion of SES is essential to ensure the competiveness, sustainability and growth of European aviation, but: There are several big member states that still have not adopted performance plans in line with the regulation for reference period two This undermines the whole system There is still minimum progress with FABs (need for stronger incentives) Broader geografical scope More performance driven Still, there are (too) close links between Member States and ANSPs

On a European level Could member states be required to open their respective markets for more competition? Towering services at larger airports? Support services? Furthermore, more pressure should be put on the member states and the ANSPs to establish effective FABs The Commission has stated that FABs should be more flexible, industry led, and more focused on performance

Performance plans for reference period three – new requirements? In its Aviation Strategy the Commission indicated that it will review the SES performance and charging schemes ahead of the third reference period which will start in 2020 Commission has stated: The performance scheme needs to be strengthened to avoid dilution of targets and allow proper tailoring at local level A Commission Staff Working Document has been prepared. Norway has submitted written comments We hope that there will be political will to set stricter requirements for the ANSPs - especially linked to capacity and cost We also hope that the Commission will amend the existing risk sharing model so that most of the "risk" both on traffic loss- and growth lies with the ANSPs Ordinary business like operation for the ANSPs Stronger incentives for improvement within the ANSPs More predictability for airspace users

Thank you for your attention!