1. Economic Impact Of ATC Jeff Poole, March 2007

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

3. But an industry in crisis since 2001 needs leadership

4. 2001-2005 airlines globally lost over US$40 billion 2006 expect losses of US$1.7 billion series of crises that changed air transport Since 2001:

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

6. The industry is moving in the right direction

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

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

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

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

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

12. Financial Performance:

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

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

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

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

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

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

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

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

21. Justification is required that charges are cost based Transparency Major investments should be justified and required Airlines should exactly know what they pay for 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. 8200 nm With Major Cost Differences…. Saving 43 Minutes 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 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 EUR 1 billion in delay EUR 1,5 billion in inefficiency EUR 7 billion in provision costs

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

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

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

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

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

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

39. Lets improve our performance as an industry IATA is here to help