1. Economic Impact Of ATC Jeff Poole, March 2007

2. Air transport is critical to the global economyÖ
We are a US$450 billion industry Ö
We support US$2.9 trillion
in economic activity

3. But an industry in crisis since 2001
needs leadership

4. series of crises that changed air transport
Since 2001:
series of crises that changed air transport Ö
airlines globally lost over US$40 billion Ö
2006 expect losses of US$1.7 billion

5. Airlines improved their bottom line even as fuel prices skyrocketed

6. The industry is moving in the right direction

7. Since 2001… Ö Ö Ö Labor productivity increased 33%
Sales & distribution costs dropped 10% Ö
Non-fuel unit costs reduced 13%

8. But it’s a bit early to celebrate…Ö
Globally ATC unit costs raised with 9,4% Ö
The costs of ATC inefficiency are too high

9. ATC impacts an airline in many waysÖ
Safety Ö
Performance Ö
Capacity Ö
Cost Efficiency

10. We need to ensure the right balance
SAFETY
CAPACITY
PERFORMANCE
COST-EFFICIENCY

11. We need a continuous focus on Improved PerformanceÖ
Financial Performance Ö
Operational Performance
Both Impact Our Bottom Line

12. Financial Performance:

13. The global Airport & ATC share of the costs is large:Ö
Global USD 42 billion bill Ö
11% of average airline cost base

14. We experience major global differences in:Ö
Efficiency Ö
Stakeholder Engagement Ö
Transparency

15. And major ATC cost variations:
From USD 0,04 per KM to USD 4 per KM of controlled flight

16. Efficiency: Ö Ö Ö Ö Control overhead Control operational costs
Invest wisely Ö
Harmonize Services

17. Invest Wisely: Hudson Bay Example Ö Ö Ö Radar Investment $ 37 mln
ADS Investment $ 10 mln Ö
Annual operational benefits:
$ 11 mln

18. The choice for ADS-B: Ö Ö Ö Lower investment Operational benefits
Future technology

19. Avoided Investment, USD 22 million…… through:Ö
Proper Cost Benefit Analysis Ö
Stakeholder Engagement

20. Stakeholder EngagementÖ
Airlines are customers and are directly affected Ö
Airline involvement will lead to successful implementation Ö
Involving airline expertise will lead to more efficient investments

21. Transparency Ö Ö Ö Ö Airlines should exactly know what they pay for
Justification is required that charges are cost based Ö
Major investments should be justified and required Ö
Transparency should lead to improved benchmarking

22. Operational Performance:

23. The high price of oil
continues to hurt airlines

24. The industry fuel bill rose from…
2001 fuel bill: USD 43 billion
2005 fuel bill: USD 91 billion
2006 fuel bill: USD 115 billion

25. Which Reinforces:
Flying Time = Money

26. There are multiple ways
From A
8200 nm
9100
To B

27. With Major Cost Differences….
8200 nm Ö
Saving 43 Minutes Ö
Saving 8400 kg of fuel

28. Move from this……

29. To this……

30. Straighter routes and removal of barriers are of great importance to an improved performance

31. Pretoria
Algiers
UM731
UM998
RUDAS
GBV
MAIDUGURI
NODJAMENA
ORAN Ö
African Red Carpet express routes annually save the industry USD 7.6 million in costs

32. The European Challenge
EUR 9,5 billion in ATM costs Ö
EUR 7 billion in provision costs Ö
EUR 1 billion in delay Ö
EUR 1,5 billion in inefficiency

33. The European Challenge
EUR 3,3 billion in possible improvement Ö
EUR 2,5 billion consolidation Ö
EUR 0,5 billion airspace redesign Ö
EUR 0,3 billion capacity planning

34. Military operations are also affecting performance……….

35. One Military Atlantic ExerciseÖ
600 NM Restricted Airspace Ö
NAT traffic heavily impacted Ö
Airlines lost USD 1,9 mln
In one day

36. The Global Performance ChallengesÖ
Harmonization of airspace Ö
Standardization of Infrastructure Ö
Consolidation of providers Ö
Lower Unit Costs

37. What can ANSPs do? Ö
Drive cost reduction and efficiency improvement with more speed Ö
Agree to challenging efficiency targets Ö
Work together with airlines as business partners in long term strategies and investments

38. What can Governments do?Ö
Ensure independent regulation Ö
Establish a level playing field Ö
Set clear efficiency targets Ö
Remove obstacles

39. Let’s improve our performance as an industry
IATA is here to help