1. 15 May 2019

2. How ANSP business model developments can contribute to the defragmentation of the European ANS landscape
S. Buyle*, W. Dewulf, F. Kupfer, E. Onghena, H. Meersman, E. Van de Voorde
FABEC & FAB CE Research Workshop, Budapest, 14th – 15th May 2019
15 May 2019

3. Outline Introduction Methodology Business model variables Results
Conclusions
Introduction
Methodology
Variables
Results
Conclusions

4. Challenges
IFR movements in Europe predicted to grow by 15% in next seven years in the base scenario
(EUROCONTROL seven-year forecast, Feb. 2019)
EUROCONTROL predicts that 190 thousand flights cannot be accommodated by 2022 due to capacity constraints
(EUROCONTROL seven-year forecast, Feb. 2016)
Sector reforms initiated by SES and SESAR initiatives
Increased competition
Increased pressure on cost structures
Increased incentives for innovation
Introduction
Methodology
Variables
Results
Conclusions

5. Questions What are the strategic options for ANSPs?
Which are the current business models observed?
How fragmented is the European ANS landscape in terms of business models?
Introduction
Methodology
Variables
Results
Conclusions

6. Factors & factor scores
Methodology
Factors & factor scores
Strategic choices
Asset choices
Factor analysis
for mixed data
Typology
Governance choices
Strategy outcomes
Introduction
Methodology
Variables
Results
Conclusions

7. Business model variables (1/2)
Operational scope
Marketable service offer
Military ANS integration
International ANS service offer
Collaboration forms
Number of alliances by type
Number of joint-ventures by type
Innovation strategy
Number of Horizon 2020 projects
Remote tower operations
Factor inputs
Labour to capital ratio
Make-or-buy choices
Outsourcing MET services
Ownership structure
Percentage of government owned shares
Percentage of private owned shares
Corporate structure
Government department / Airport operator / Independent entity
Introduction
Methodology
Variables
Results
Conclusions

8. Business model variables (2/2)
Cost structure
Cost share of staff costs
Cost share of non-staff operational costs
Cost share of depreciation costs
Cost share of capital costs
Unit cost of terminal services (€/movement)
Unit cost of en-route services (€/flight km)
Revenue structure
Revenue share of terminal services
Revenue share of en-route services
Revenue share of marketable services
Unit revenue of terminal services (€/movement)
Unit revenue of en-route services (€/flight km)
Introduction
Methodology
Variables
Results
Conclusions

9. Factor interpretation
% of var explained
High scoring ANSPs
Low scoring ANSPs
Innovativeness
26,25%
NATS, DFS, Skyguide, ENAV, LFV
HCAA, DCAC Cyprus, DHMI, M-NAV, MATS
Collab. & technology invest.
13,73%
LFV, Avinor, Naviair, IAA
Sakaeronavigatsia, Skyguide, ARMATS, MoldATSA, UkSATSE
En-route efficiency
10,15%
EANS, IAA, LGS
Skeyes, LVNL
Outsourcing
7,77%
ENAV, NATS, Skyguide, DSNA
SMATSA, LFV, AustroControl
Mixed alliances vs. commercial focus
5,73%
LVNL, Croatia Control, Oro Navigacija, IAA
HCAA, SMATSA, EANS, ANS CR, LPS
Introduction
Methodology
Variables
Results
Conclusions

10. Innovativeness Correlations sign. at 1% ANOVA contrasts sign. at 1%
En-route share
-0,908
Not marketable
-2,353
Terminal share
-0,906
Marketable
2,353
Marketable share
0,907
National
-1,830
Labour ratio
-0,419
International
1,830
Gov. shares
-0,547
Independent
2,001
Priv. shares
0,547
No remote towers
-1,184
H2020 projects
0,630
Remote towers
1,184
Depreciation cst sh.
0,431
ANSP JVs
0,685
Supplier JVs
0,549
Mixed JVs
0,610
 NATS, DFS, Skyguide, ENAV, LFV
 HCAA, DCAC Cyprus, DHMI, M-NAV, MATS
% of variance explained: 26,25%
Introduction
Methodology
Variables
Results
Conclusions

11. Collaboration and technology investment
Correlations sign. at 1%
ANOVA contrasts sign. at 1%
Capital cost share
-0,437
No remote towers
-1,093
Staff cost share
0,496
Remote towers
1,093
Terminal unit cost
-0,764
Terminal unit rev.
ANSP alliances
0,564
Mixed alliances
0,642
 LFV, Avinor, Naviair, IAA
 Sakaeronavigatsia, Skyguide, ARMATS, MoldATSA, UkSATSE
% of variance explained: 13,73%
Introduction
Methodology
Variables
Results
Conclusions

12. En-route efficiency Correlations sign. at 1%
ANOVA contrasts sign. at 5%
Capital cost share
0,707
No remote towers
-0,582
Staff cost share
-0,631
Remote towers
0,582
En-route unit cost
-0,724
En-route unit rev.
-0,759
 EANS, IAA, LGS
 Skeyes, LVNL
% of variance explained: 10,15%
Introduction
Methodology
Variables
Results
Conclusions

13. Outsourcing Correlations sign. at 1% ANOVA contrasts sign. at 5%
Gov. shares
-0,640
Civil only
0,590
Priv. shares
0,640
Military integrated
-0,590
Mixed JVs
0,543
MET in-house
-0,643
MET outsourced
0,643
Gov. department
1,393
Independent
-0,722
 ENAV, NATS, Skyguide, DSNA
 SMATSA, LFV, AustroControl
% of variance explained: 7,77%
Introduction
Methodology
Variables
Results
Conclusions

14. Mixed alliance participation vs. comm. focus
Correlations sign. at 1%
ANOVA contrasts sign. at 5%
Labour ratio
-0,557
Not marketable
0,443
Mixed alliance
0,494
Marketable
-0,443
 LVNL, Croatia Control, Oro Navigacija, IAA
 HCAA, SMATSA, EANS, ANS CR, LPS
% of variance explained: 5,73%
Introduction
Methodology
Variables
Results
Conclusions

15. Typology (1/2) Factor Developing ANSPs Basic ANSPs Basic+ ANSPs
Innovativeness
Low
Average
Collab. & technology invest.
Very low
Average to high
En-route efficiency
High
Outsourcing
High to very high
Mixed alliances vs. commercial focus
ANSPs
UkSATSE, Sakaeronavigatsia, ARMATS, MoldATSA, Albcontrol
LGS, DHMI, BULATSA, DCAC Cyprus, MATS, ROMATSA, Slovenia Control
ANS Finland, M-NAV, DSNA, PANSA, NAV Portugal, IAA, Oro Navigacija, Croatia Control, LVNL, Avinor
Introduction
Methodology
Variables
Results
Conclusions

16. Typology (2/2) Factor Market driven ANSPs Innovators Professionals
Innovativeness
High
Very high
Collab. & technology invest.
Low
Average
En-route efficiency
Average to high
Outsourcing
Low to very low
Mixed alliances vs. commercial focus
ANSPs
SMATSA, ANS CR, LPS, HungaroControl, Skeyes
Austro Control, LFV, Naviair, EANS
NATS, ENAIRE, ENAV, Skyguide, DFS
Introduction
Methodology
Variables
Results
Conclusions

17. Conclusions
No one “European ANSP business model”, multiple business models exist
European ANSPs differ mainly based on
Level of technical and business model innovation
Level of collaboration and technology investment
Introduction
Methodology
Variables
Results
Conclusions

18. Faculty of Business and Economics,
Drs. Sven Buyle
Faculty of Business and Economics,
Department of Transport and Regional Economics