1. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 0 Single European Sky and Performance Scheme from an European airline's point of view Performance Scheme – are we on the right track? Kay Kratky Member of the Lufthansa German Airlines Board Frankfurt & Flight Operations Lufthansa German Airlines

2. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 1 What started 50 years ago …

3. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 2 … and is still going strong?

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11. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 10 Single European Sky – The idea also dates back to the 60s!

12. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 11 (EC) No 219/2007 establishing SESAR Joint Undertaking for private public partnership (EC) No 1070/2009 amending (EC) 549/2004 SES II Source : Eurocontrol webpage 2020+ 201420102012200419991960 Are we on the right track? Decades of initiatives for an integrated sky in Europe 13 December 1960 EUROCONTROL International Convention relating to Cooperation for the Safety of Air Navigation is signed by the 6 founding States. The original aim of EUROCONTROL was to achieve the complete integration of air traffic services in Europe. 1999 start of SES process COM (1999) 614 (EC) No 549/2004 Framework Regulation for the creation of the single European Sky 2009 SES II regulatory package 2013: SES II+ ? (EC) No 691/2010 Performance scheme Regulation SESAR Deployment Phase (2013/14 - 2020+) SESAR Development Phase (2008 – 2016+) SESAR Definition Phase (2005-2008) Examples; not all applicable SES regulation shown. Complete list Report on the SES Legislation Implementation, Ch. 1.3, EUROCONTROL June 2012 (EC)No 1794/2009 Charging scheme Regulation (EC) No 550/2004 Service provision Regulation (EC) No 176/2011 FAB information Regulation 2004 SES I regulatory package

13. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 12 Consumers and airlines pay the bill: Delayed flights Longer flight time Higher fares I n 2011, in the EU ATM inefficiencies resulted in: 17.9 million minutes of ATFM delays CO 2 8.1 million tons of wasted CO 2 Approx. 4 billion costs p.a. borne by airlines due to suboptimal cost-efficiency and fragmentation SES Performance State of play Source: IATA, Eurocontrol data

14. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 13 Asia Pacific Net profits of European airlines are under pressure Source: ICAO revised data 2009-11. IATA estimates for regions in 2011. IATA forecasts for 2012 and 2013. September 2012 EuropeNorth America

15. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 14 ATM inefficiency in Europe primarily affects European carriers Benchmarking of the European ATM performance. US versus Europe: Significant room for improvement in Europe Source: EUROCONTROL & FAA Study March 2012, figures 2010 Airspace (millions of km2) 10.411.5 Flights (IFR, in millions) 15.99.5 Air Navigation Service Providers (en route) 138 Area control centers 2063 Air traffic controllers 14.616.7 Flights per controller 1089569 Share of departure delays > 15 min. due to en route constraints 0.1%5.7% Lack of efficiency of the European ATM system

16. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 15 ATM performance has major impact on the airline cost structure. Example Lufthansa Share of external costs - European traffic Impact estimation. Source costs:: Externally driven total costs Lufthansa Passage Kont traffic, Sep 2011 – Aug 2012. About 50% of total costs externally driven, about 50 % internally driven (staff, aircraft finance, maintenance, catering, sales & distribution etc). 40 % ATC charges Airport charges other 12 % Fuel 43 % Airport throughput Departure delays Free Routing Civil / Military cooperation Flexible use of airspace Arrival / Departure Management Optimised use of infrastructure 5% Significant influence in case of SES implementation

17. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 16 FABs will by no means optimise airspace, technical and human resources by end 2012. Member States must reinvent FAB governance. EU Commission must take the necessary action and enforce compliance with legal FAB requirements. Mandate assigned to EUROCONTROL. Significant contributions of Network Manager to SES target achievements expected. Efficiency impact to be proven. Significant differences between the individual efforts made by Member States in RP1 - poor performance in RP1 to be considered for RP2. ATC charges in Europe remain very high despite Performance Scheme. Ambitious targets for RP2 required. High level goals of SES must be maintained by all means. Few quick wins so far – encouraging singular projects but massive delay. SJU dominated by manufacturers and ANSPs. Governance and funding for SESAR Deployment not clarified yet. Are we on the right track? Interim assessment of performance achievements from airline perspective Performance Scheme Network Manager Functional Airspace Blocks (FABs)

18. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 17 SES has not delivered yet SES is most important for improving competitiveness of European carriers and economy. Airlines cannot transmit benefit of SES to European consumers and environment so far. European airlines are willing to contribute to the success of SES.

19. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 18 SES II+ regulatory framework Single European Sky: the time for action Conference We need: Streamline and consolidate ATM operations Europe wide. More competition and liberalisation of the market. 1 Rethinking SES governance. Strong political guidance and more top-down approach. 2 Enforceable goals for the Performance Scheme (RP1 + RP2) and FABs, Network Manager, SESAR Deployment. Appropriate sanction mechanism. Greater influence for the airspace users. 4 5 Accelarate SESAR Deployment. Timely synchronised deployment air and ground. 3

20. Single European Sky Conference, Limassol Lufthansa German Airlines October 11, 2012 Page 19 SES II + and Performance Scheme Thank you for your attention Get on the right track. NOW! FAST!